Vlamaki v Sookias & Sookias

A solicitor’s retainer is construed as a whole and against its factual background. Where a fundamental term remains ambiguous, the ambiguity is resolved against the solicitors, especially where the client is a layperson. Monthly bills during ongoing work and a final bill after completion do not clearly create interim statute bills merely because payment is due on delivery or interest is chargeable. The interim bills remain bills on account unless the retainer clearly makes them final for the period covered. A later letter stating that no further invoice will be rendered does not alter their status. Without a statute bill, an application for assessment under section 70 of the Solicitors Act 1974 is premature, and the 12-month bar for a paid bill does not apply.

Dr Zoe Vlamaki sought assessment of invoices issued by Sookias & Sookias in relation to three matters under section 70 of the Solicitors Act 1974. Master Campbell held that she could proceed. The solicitors appealed from his order dated 2 February 2015, which gave effect to his judgment of 15 December 2014.

The appeal concerned whether the retainers authorised interim statute bills, so that the statutory time bar applied, and whether an October 2013 letter stating that no further sums were due converted earlier invoices into final bills. The central questions were the proper construction of the retainers and the legal effect of the letter.

The appeal was allowed in part. Ground 1 failed, but ground 2 succeeded. Consequential orders were reserved for further argument.

1. Construction of the retainers. A solicitor’s retainer generally involves an entire obligation, subject to agreement to the contrary. The retainers had to be construed as a whole and against the factual matrix at the time of contracting. The solicitors accepted that any unresolved ambiguity on a fundamental term should be resolved against them, and that the client was a layperson.
2. Interim statute bills. The court applied the approach in Bari v Rosen [2012] EWHC 1782 (QB); [2012] 5 Costs L.R. 851. Clauses providing for payments on account, monthly bills while work was in progress, and a final bill after completion did not expressly state that each interim bill was final for the period covered. Payment being due on delivery and interest being chargeable were also consistent with non-statute interim bills. The terms therefore remained substantially ambiguous and did not authorise interim statute bills. Ground 1 failed.
3. October 2013 letter. The letter stated that further unbilled time would not be invoiced and that no further sums were due. It did not state that the earlier interim bills were being converted into statute bills or otherwise change their status. The earlier invoices remained bills on account. Since no statute bill had been delivered, the assessment application was premature. The Master’s reasoning that the last bill became final and incorporated the earlier bills could not be sustained. Ground 2 succeeded.
4. Other authorities and procedure. R (Halborg) v The Law Society [2010] EWHC 38 (Admin) concerned similar clauses, but its analysis did not address the concessions material in this case and was distinguished. If permission or an extension of time was required for the respondent’s alternative argument, the court applied the three-stage approach in Denton v TH White Limited [2014] EWCA Civ 906; [2014] 1 WLR 3926. The default was at the low end of seriousness and significance, its reason was explained, and there was no prejudice.

1. Senior Costs Office: Master Campbell delivered judgment on 15 December 2014 and made an order on 2 February 2015 allowing Dr Vlamaki to proceed with her application for assessment of the invoices.
2. High Court (Queen’s Bench Division): On appeal, ground 1 failed and ground 2 succeeded. The assessment application was held premature because no statute bill had been delivered.