Sprey v Rawlison Butler LLP

Monthly invoices under a discounted conditional fee agreement are not interim statute bills merely because they state a precise sum, are described as final, and are payable on delivery. The court must construe the retainer as a whole. A statute bill is final and self-contained for the work it covers. Where the client’s ultimate liability depends on success, loss or termination, and earlier payments may be credited against the final liability, the invoices are payments on account or Chamberlain bills. Conduct cannot convert them into statute bills where that conclusion is inconsistent with the express agreement.

The solicitor acted for the client first under a conventional retainer and later under a discounted conditional fee agreement. During the CFA period, the solicitor rendered monthly invoices at 40% of normal rates. After the claim settled, the solicitor rendered a balancing invoice and a success fee invoice.

The Senior Costs Judge held that the monthly invoices were interim statute bills. Because the client’s applications for detailed assessment were made outside the statutory time limits for some bills, assessment was restricted. The client appealed, arguing that the CFA did not permit interim statute bills, that no such agreement could be inferred from the parties’ conduct, and that the balancing invoice should be assessed more broadly.

1. Appeal allowed. The monthly 40% invoices were not interim statute bills and therefore did not start the time limits for assessment under Solicitors Act 1974, s.70.
2. A solicitor’s retainer is ordinarily an entire contract. Interim statute bills require agreement, which may be express or inferred from conduct. A statute bill is a final, self-contained bill for the work covered and cannot later be adjusted merely in light of the outcome of the business. A series of bills may instead be payments on account or Chamberlain bills.
3. The CFA had to be construed as a whole. Clause 4.3, requiring billing at discounted rates, was neutral about whether the invoices were statute bills. Clause 11.1, read with clauses 5.1, 6.1 and 14.1, indicated that the client’s liability and right to assessment arose when the claim was won, lost or terminated. Until then, the amounts paid were capable of being credited against the final liability at the applicable rate.
4. This construction was consistent with the statutory purpose of giving the client sufficient information to decide whether to seek assessment. Treating incomplete or potentially adjustable invoices as statute bills could cause the client to issue protective assessment applications before the final liability was known.
5. The court applied the principles in Richard Slade & Co Solicitors v Boodia, and the finality principle identified in Bari v Rosen. The reliance on Abedi v Penningtons was distinguishable because that case did not involve a CFA whose terms explained the nature of the payments.
6. The parties’ conduct could not create an inferred agreement inconsistent with the CFA. The 40% invoices remained payments on account or Chamberlain bills, even though they were expressed to be final and were paid promptly. The third ground concerning the balancing invoice did not arise for decision.

• High Court (Queen’s Bench Division): On appeal from the Senior Courts Costs Office, the court allowed the appeal and invited counsel to agree the consequential order.
• Senior Courts Costs Office: Master Rowley had held that the monthly 40% invoices were interim statute bills and had restricted detailed assessment according to the time limits in Solicitors Act 1974, s.70.