Solicitors Indemnity Fund Ltd v Hewitson & Harker

A party seeking taxation of a solicitor’s bill must make an actual application within the statutory time limit. Ongoing litigation about the right to taxation does not suspend or extend that requirement. A protective application may be made without prejudice to arguments in other proceedings. A person who has undertaken responsibility for a bill may also have rights under section 71 of the Solicitors Act 1974, but cannot obtain a better time-limit position than the party chargeable with the bill.

Hewitson and Harker had agreed with their insurers and solicitors acting for them that settlement proceeds would be divided between their unpaid fees and the solicitors’ costs. The solicitors’ costs exceeded the agreed cap. After receiving detailed invoices, Hewitson and Harker maintained that the costs should be assessed.

The County Court rejected their claim. On appeal, the Court of Appeal considered whether statutory rights under sections 70 or 71 of the Solicitors Act 1974 remained available and whether pending proceedings prevented a protective application. The central issue was whether the statutory time limits had expired.

Appeal dismissed. The Court of Appeal held that the appellants’ case failed because no application for taxation had been made within the statutory period.

1. Section 70(3) imposes specific time limits on a late application by the party chargeable with the bill, subject to special circumstances. Section 70(4) creates an absolute bar after 12 months from payment. It was unnecessary to resolve how the possible starting dates interrelated, because the latest suggested date was receipt of the detailed invoices in October 2008 and no application had been made by February 2010.
2. The invoices were sufficiently connected with the appellants’ liability even though addressed to the insurers, since the insurers were expected to pay and had paid them. The appellants could not avoid the statutory time bar by characterising the invoices as addressed only to the insurers.
3. The existence of County Court proceedings in which the respondents disputed any right to taxation did not justify failing to make a protective application. A party may apply to protect its position, making clear that the application is without prejudice to the arguments in the other proceedings. Such an application would not necessarily constitute an abuse of process.
4. Lady Justice Arden stated that, if a statutory right applied, section 71 rather than section 70 might govern the appellants’ position. The agreement could amount to an undertaking by a person other than the party chargeable with the bill, but any right under section 71 was likewise time-barred and could not put the appellants in a better position than the party chargeable with the bill.

The appeal was dismissed. The cross-appeal application was refused.

• Court of Appeal (Civil Division): appeal from the judgment of His Honour Judge Walton in the Newcastle-upon-Tyne County Court, delivered on 27 April 2009; appeal dismissed and cross-appeal application refused.