Guest Supplies Intl Limited v Spector Constant & Williams Limited

A solicitor’s contractual right to deduct fees does not, without more, establish a right to raise interim statute bills. The retainer must be construed to determine whether such bills were authorised. A compliant statute bill must contain sufficient information and cannot be created piecemeal by later provision of time ledgers or spreadsheets. Invoices which overlap in the periods covered, lack sufficient narratives, and are issued at discounted rates pending the outcome of the litigation may not be final bills. Although invoices lacking contractual status may in principle form a Chamberlain bill, that conclusion is fact-sensitive. The court must decide whether such a bill exists before considering the consequences of payment and any need to show special circumstances.

The claimant sought permission to challenge invoices delivered by the defendant solicitors under a conditional fee agreement. The parties’ retainer included a costs cap, provisions concerning payments on account, deductions from funds received, and references to bills and assessment.

The defendant argued that the invoices were interim statute bills or, alternatively, formed a Chamberlain bill which had been paid by deductions from client money. The claimant argued that there was no contractual entitlement to interim statute bills, that the invoices were not compliant bills, and that no Chamberlain bill arose. The central issues were the status of the invoices, the effect of deductions, and whether assessment required special circumstances.

1. No contractual right to interim statute bills. The client care letter, terms and conditions, and CFA, read individually and collectively, did not demonstrate an express or implied agreement to raise interim statute bills. References to bills, regular intervals, payment on account and deductions did not sufficiently explain that interim bills would be final for the periods covered and would trigger statutory assessment time limits.
2. Construction of the deduction clauses. Clause 4.3 of the terms and conditions authorised deductions only from sums held when a bill had been sent. The meaning of “bill” was unclear and the claimant was entitled to understand it as the final bill. Clause 5.4 of the CFA appeared in the section concerning what happened if the client won and could reasonably be read as applying to deductions in satisfaction of a final bill. The principle in Menzies v Oakwood Solicitors Ltd was therefore engaged: there must be a bill to be satisfied.
3. The invoices were not interim statute bills. They were described as invoices, contained only a brief and insufficient narrative, overlapped in the periods covered, and were issued at discounted rates while the final outcome and success fee remained uncertain. A compliant statute bill could not be produced piecemeal by later supplying time ledgers or spreadsheets.
4. No Chamberlain bill. Although the absence of contractual entitlement was not fatal, the cumulative deficiencies meant that the invoices did not form a Chamberlain chain. The court rejected the submission that the consequences for the client should determine whether such a bill existed. The question was fact-sensitive and had to be decided on the invoices and circumstances.
5. Alternative conclusion on special circumstances. If a Chamberlain bill had been established, the costs cap, the relationship between the cap and an earlier budget, the early settlement of the underlying dispute, inadequate explanations of out-of-cap work, and rapidly escalating charges would have constituted special circumstances or justified exercising the court’s discretion to permit assessment.
6. Order. The defendant was required to deliver a final statute bill and a cash account. No assessment order was required immediately because no statute bill had yet been served. Under section 70(1) of the Solicitors Act 1974, the claimant would be entitled to assessment if it applied within one month after delivery of the final bill.

The judgment records an earlier judgment dated 18 July 2023 concerning the enforceability of the conditional fee agreement. The present decision determined the remaining issues concerning the bills and the claimant’s statutory right to assessment.