Dean Menzies v Oakwood Solicitors Limited

For the purposes of section 70 of the Solicitors Act 1974, payment of a solicitor’s bill means a transfer of money, or its equivalent, in satisfaction of a compliant bill with the payer’s knowledge and consent. A client may give valid advance authority for fees to be deducted from funds held by the solicitor. Consent need not follow delivery of the bill or extend to its precise amount.

Delivery of a compliant bill supplies the necessary knowledge and triggers the statutory timetable. Courts should not supplement that timetable with a requirement for a settlement of account or a reasonable period for objection. The client retains the right to seek assessment, but only within the statutory time limits.

The client retained the solicitors under a conditional fee agreement which authorised them to deduct their fees from compensation recovered in a personal injury claim, subject to a 25% cap. After settlement, the solicitors delivered a final statutory bill, deducted their fees from money held in their client account and paid the balance to the client. The client sought assessment nearly two years later.

Costs Judge Rowley held that section 70(4) of the Solicitors Act 1974 barred assessment. On appeal, Bourne J held in [2022] EWHC 3199 (KB) that payment required a settlement of account and that no such settlement had occurred. The solicitors appealed. The central issue was whether an authorised deduction made after delivery of a compliant bill constituted payment under section 70(4).

1. Appeal allowed. Payment for the purposes of section 70 of the Solicitors Act 1974 is a transfer of money, or its equivalent, in satisfaction of a bill with the payer’s knowledge and consent. The expression “settlement of the accounts” should no longer be used in this context. It does not appear in the statute, lacks clarity and originated in cases without an effective written retainer.

2. A transfer can satisfy a bill only if there is a compliant statutory bill. Such a bill must meet section 69 and give the client sufficient information about the amount charged and the work for which it is charged. Its delivery supplies the knowledge necessary for payment.

3. The client’s consent to the transfer need not be given after delivery of the bill. A valid written retainer may authorise the solicitor in advance to deduct fees from funds held for the client. Consent is required for the transfer of money, not necessarily for the precise sum expressed in pounds and pence. The statutory assessment process determines the amount properly payable.

4. Section 70 itself establishes the applicable timetable from delivery and payment of a compliant bill. Judge-made law should not qualify it by requiring a further reasonable period for objection. Even after an authorised transfer, the client may challenge the amount under section 70, whether or not the precise amount was agreed, but remains subject to the statutory time limits.

5. The conditional fee agreement and accompanying documents authorised deduction of the solicitors’ fees from the client’s compensation, up to 25%. Payment occurred when the solicitors made the deduction after delivering the final statutory bill. Since the client applied more than 12 months later, section 70(4) barred assessment. Costs Judge Rowley’s decision was restored.

The court repeated that the legislation required reconsideration to achieve an appropriate modern balance between consumer protection and certainty.

1. Court of Appeal (Civil Division): In [2023] EWCA Civ 844, allowed the solicitors’ appeal and restored Costs Judge Rowley’s decision that section 70(4) of the Solicitors Act 1974 barred assessment.
2. High Court, King’s Bench Division: Bourne J, sitting with Master Brown as assessor, allowed the client’s appeal in [2022] EWHC 3199 (KB). He held that no settlement of account, and therefore no payment, had occurred.
3. Costs Court: Costs Judge Rowley held that the client had agreed to payment of fees up to 25% of the compensation and that section 70(4) barred the assessment application. He provisionally found special circumstances for an assessment under section 70(3) if that conclusion were wrong.