Sylvia Olukoya v Riverbrooke Solicitors Ltd

An informal resolution brokered by the Legal Ombudsman may create a binding contract where the parties’ communications and conduct objectively demonstrate agreement on complete terms. The client’s termination of the complaint and surrender of possible further remedies can constitute good consideration.

A solicitor’s bill delivered as a final statutory bill binds the solicitor. It cannot be revised without the client’s agreement or the court’s permission. Permission is exceptional and is generally confined to genuine mistake or inadvertence. A solicitor cannot use a later bill to escape an agreed Ombudsman resolution. In the circumstances, the revised bill was assessable at nil.

The claimant instructed the defendant solicitors in connection with an Employment Tribunal claim. Following a dispute about costs, she complained to the Legal Ombudsman. In February 2020 the parties reached an Informal Resolution under which the defendant would issue a full and final bill for £13,000, less payments already made. The claimant paid the balance.

Almost three years later the defendant issued a Revised Final Invoice for substantially higher costs. The claimant applied under section 70 of the Solicitors Act 1974 for assessment and raised contractual, statutory, estoppel and permission issues. The court determined whether the Informal Resolution was binding, whether the 2020 bill was final, and whether the revised bill could be raised.

1. Contractual effect of the Informal Resolution. The court applied the objective approach to contract formation stated in RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG [2010] UKSC 14. The parties’ communications and conduct showed agreement on complete terms: the defendant accepted £10,000 plus specified VAT and disbursements in full and final settlement, issued the agreed bill, and accepted payment. Subjective intention and the description of the arrangement as informal were immaterial.
2. The claimant provided good consideration by terminating her Ombudsman complaint, surrendering the possibility of public vindication and foregoing possible remedies such as compensation or an apology. The defendant therefore had no further contractual claim for costs. The Informal Resolution was not made binding by the Scheme Rules or statute; ordinary contractual principles were sufficient.
3. Final statutory bill. Applying Bilkus v Stockler Brunton (a Firm) [2010] EWCA Civ 101, a final bill is binding on the solicitor and cannot be amended without the client’s agreement or the court’s permission. The February 2020 Final Invoice was a statutory bill. The defendant’s intention or alleged deficiencies in its own bill did not alter that conclusion. The exceptional jurisdiction to permit revision, described in Bilkus, was not engaged because there was no genuine mistake or inadvertence.
4. Permission would in any event have been refused. Allowing revision would undermine the public policy of the Legal Ombudsman scheme by permitting a solicitor to withdraw from an accepted informal settlement and render a substantially higher bill.
5. The court had jurisdiction to consider promissory estoppel where the issue was relevant to the assessment, applying Jones v Richard Slade & Co Ltd [2022] Costs LR 1191. The defendant’s clear promise, the claimant’s reliance and the absence of inequitable conduct would have established the estoppel, although that conclusion was academic.
6. The Revised Final Invoice was assessed at nil.