Abedi v Penningtons

A solicitor cannot treat any date chosen for convenience as a natural break justifying an interim statute bill. Without agreement, the bill must relate to a separate and distinct part of the overall work. Nevertheless, interim statute bills may be enforceable where an agreement is inferred from the parties’ conduct. Payment alone will not usually establish that agreement, particularly where bills appear to be statements of account or requests for payment on account. Clear self-contained bills, demands for payment, and repeated treatment of unpaid sums as outstanding charges may justify the inference. A final bill remains recoverable independently. Taxation out of time requires exceptional circumstances.

The claimant retained the defendant solicitors in 1994 in relation to several sets of contentious proceedings. The solicitors sent 42 bills in interim statute-bill form, mostly monthly. The first 26 were paid, but later bills remained unpaid. The claimant subsequently sought taxation and disputed the solicitors’ entitlement to sue on the bills.

Master Turner granted summary judgment. Turner J dismissed the claimant’s appeal and held that the bills were enforceable interim statute bills. The claimant appealed to the Court of Appeal, arguing that the bills were not delivered at natural breaks and that no agreement to treat them as final bills could be inferred.

1. Appeal dismissed. The solicitors were entitled to recover the unpaid bills. The last bill was recoverable as a final bill in its own right.
2. A natural break is not merely a date selected by solicitors for their convenience. In the absence of agreement, it must represent the conclusion of a definite, separate and distinct part of the legal work for which the solicitor was retained. Monthly or otherwise periodic billing, unrelated to any stage or feature of the proceedings, does not satisfy that principle.
3. The law permits interim statute bills to be enforceable by virtue of an agreement inferred from the parties’ conduct, as well as by express agreement or delivery at a natural break. The solicitor must establish that both parties intended the documents to be treated as self-contained statutory bills.
4. Payment is relevant but not conclusive. Agreement should not readily be inferred merely from payments, especially where bills are in round figures, sent regularly, or paid by lump sums. Here, however, the bills were self-contained, made clear demands for payment, and unpaid sums were repeatedly treated by the client as outstanding legal charges. The conduct as a whole supported the inference of agreement.
5. The court declined to exercise its inherent jurisdiction to order taxation despite expiry of the statutory time limits. A bare allegation that the bills were excessive and lacked a detailed breakdown was insufficient to constitute exceptional circumstances.

Lord Justice Otton agreed. Lord Justice Judge agreed with Lord Justice Simon Brown and emphasised that calendar dates alone do not constitute natural breaks.

• Court of Appeal (Civil Division): appeal dismissed.
• High Court, Queen’s Bench Division: Turner J dismissed the appeal from summary judgment and held that the bills were enforceable interim statute bills.
• Master Turner: summary judgment entered for the solicitors under Order 14.