Adams v Paetzold & Ors

Permission for a second appeal should be refused where the proposed appeal raises no important point of principle or practice and there is no other compelling reason for it to be heard.

For costs purposes, a solicitor’s interim bill may be either a statute bill, which is final for the work covered, or a bill on account, which may be followed by a final bill including an uplift. The character of the bill depends on the retainer and the surrounding documents. A retainer may be varied by the client’s conduct. A clear reservation of a right to charge an uplift may be effective even without stating an estimated range, subject to assessment and the indemnity principle.

The proceedings concerned the costs payable by Mr Macinnis, an unsuccessful defendant, to Mr Adams following a property dispute. Stephens Innocent had rendered interim bills during the litigation and later issued a final bill including an uplift.

Master Seager Berry allowed recovery of the uplift, reduced from 80 per cent to 65 per cent. Gray J allowed Mr Macinnis’s appeal in part, holding that the bills rendered before August 1994 did not permit an uplift, but that the later bills did.

Mr Macinnis applied for permission to bring a second appeal on issues including the character of the bills, variation of the retainer, champerty, the indemnity principle and alleged procedural unfairness.

1. Application refused. The proposed second appeal disclosed no important point of principle or practice and no other compelling reason for a further appeal.
2. The distinction between interim statute bills and interim bills on account was material. The former are final bills for the work covered and cannot later be adjusted. The latter are requests for payment on account and may be followed by a final bill including an uplift.
3. The pre-August 1994 invoices referred to taxation under the Solicitors Act 1974 and did not reserve a right to charge an uplift. They therefore strongly indicated statute bills. The August 1994 letter and later endorsements clearly indicated bills on account. The judge was entitled to treat the intermediate bills as governed by the varied retainer.
4. The August 1994 letter validly varied the retainer. Although it was not signed, Mr Adams accepted it by permitting the proposed billing practice and paying the bills.
5. The absence of an estimated uplift range did not establish that Mr Adams was not contractually liable for the uplift. The right to charge an uplift was clearly stated, and the reasonableness of the uplift remained subject to assessment. Recovery could not exceed the solicitor’s contractual entitlement, consistently with the indemnity principle.
6. Late disclosure of the retainer letter was an unfortunate irregularity. However, it had not been shown to cause injustice. The order was therefore that permission to appeal be refused.

• Court of Appeal (Civil Division): Permission for a second appeal from Gray J was refused.
• High Court, Queen’s Bench Division: Gray J allowed Mr Macinnis’s appeal in part and ordered amendment of the costs certificate by disallowing the uplift on invoices submitted before August 1994.
• Supreme Court Costs Office: Master Seager Berry allowed recovery of an uplift, reduced to 65 per cent, on the assessed costs.