Slade (t/a Richard Slade And Company) v Boodia & Anor

An interim statute bill under the Solicitors Act 1974 need not include both profit costs and disbursements attributable to the period which it covers. The two categories may be billed separately.

The essential distinction is between a bill intended to be complete and final as regards its subject matter and a request for payment on account. A bill limited to one category of costs may exceptionally fail to comply with the Act if its narrative, supplemented by the client’s existing knowledge, does not enable an informed decision about seeking assessment. Its limited subject matter does not itself cause that failure.

A solicitor acted for two clients in a right-of-way dispute under a retainer providing for final monthly bills. It also provided that disbursements would normally be billed separately and later. The solicitor delivered 43 invoices for profit costs and 18 for disbursements.

The clients sought assessment of all the invoices under section 70 of the Solicitors Act 1974. A costs judge held that they formed a series of payments-on-account bills culminating in a final statute bill. Slade J dismissed the solicitor’s appeal in [2017] EWHC 2699 (QB), holding that an interim statute bill had to contain both profit costs and disbursements for its billing period.

The central issue was whether separate bills for profit costs and disbursements could each constitute an interim statute bill.

1. Appeal allowed. The fact that each disputed bill contained either profit costs or disbursements, rather than both, did not prevent it from being an interim statute bill. Newey LJ gave the judgment, with which Coulson and Haddon-Cave LJJ agreed.

2. Nothing in the Solicitors Act 1974 requires a statute bill to encompass both categories. Section 67 permits the inclusion of incurred but unpaid disbursements, but says nothing about whether they must accompany profit costs. Section 70(6) recognises that a bill can encompass profit costs and other costs, but does not require both. The inclusive definition of costs in section 87 provides no further assistance.

3. The expression “complete self-contained bill of costs”, used in the authorities, means that the bill must be intended as complete and final for its subject matter. It distinguishes a statute bill from a request for payment on account. It does not require the bill to include every profit cost and disbursement attributable to the billing period. Bari v Rosen [2012] 5 Costs LR 851 and the authorities using similar language had not decided the present issue.

4. The governing protection for the client remained the test in Ralph Hume Garry v Gwillim [2002] EWCA Civ 1500. The bill’s narrative, together with information already known to the client, must permit an informed decision whether to seek assessment. A bill restricted to one category of costs could fail that test on particular facts, but this would be exceptional. Separate digital billing of profit costs and disbursements is common and is not inherently problematic.

5. Aaron v Okoye [1998] 2 Costs LR 6, which permitted counsel’s fees omitted from an earlier bill to be included in a later bill, was inconsistent with any general prohibition on separate billing.

6. The respondents’ alternative contention was also rejected. A statute bill need not include every fee note or disbursement invoice received by the solicitor during the relevant billing period. Neither the Act nor the authorities supported such a rule, which would in any event leave uncertainty about earlier third-party work.

1. Court of Appeal (Civil Division): In [2018] EWCA Civ 2667, unanimously allowed the solicitor’s appeal and rejected the rule that an interim statute bill must combine profit costs and disbursements.
2. High Court, Queen’s Bench Division: Slade J dismissed the solicitor’s appeal in [2017] EWHC 2699 (QB), reported at [2018] 1 WLR 2037.
3. Costs Court: Master James held that the invoices were payments on account culminating in a final statute bill dated 6 October 2016. She ordered detailed assessment of all the bills.