CA: Statute bills do not need to include disbursements

Newey: Separate billing for profit costs and disbursements is common

A solicitor’s bill can be a statute bill without including both profit costs and disbursements, the Court of Appeal has ruled.

Overturning rulings by Mrs Justice Slade and costs judge Master James, Lord Justice Newey said an alternative approach would have “unsatisfactory implications”.

Newey LJ went on: “A solicitor could not, it seems, raise a statute bill until he had himself been invoiced for all disbursements incurred during the relevant period, leaving the solicitor dependent on the co-operation of third parties.

“The difficulties would be the greater if work were being undertaken (say, by counsel or an expert) at the end of a solicitor’s billing period.

“The solicitor would, presumably, be unable to render a statute bill until he knew the cost of work done up to midnight on the final day and, where work continued into the next billing period, an apportionment might be required.”

In Slade (t/a Richard Slade And Company) v Boodia & Anor [2018] EWCA Civ 2667, the Court of Appeal heard that Richard Slade, a sole practitioner, had been acting for Mr and Mrs Boodia in a rights of way dispute between 2013 and 2016.

Mr Slade acted under a retainer which provided for bills to be sent out monthly in arrears, with disbursements normally billed for separately.

By October 2016, when the Boodias instructed alternative solicitors, Mr Slade had delivered 61 invoices, 43 of which were devoted exclusively to profit costs and the other 18 purely to disbursements.

The Boodias were billed £141,300 plus VAT for profit costs and £31,700 plus VAT for counsel’s fees and other disbursements. They issued a claim form in November 2016, asking for all their bills to be assessed under section 70 of the Solicitors Act 1974.

Newey LJ said the question was whether Mr Slade’s bills were all statute bills or whether, as claimed by the Boodias, they were “a series of on account bills culminating in a final statute bill”.

The firm contended that the invoices rendered more than one year before the retainer was terminated could not be assessed because they were statute bills.

Under section 70, clients have an unqualified right to require a bill to be assessed for a month after its delivery, but special circumstances need to be shown if more than 12 months had passed since the bill was delivered, a judgment had been obtained on the bill or the bill had been paid. The Boodias paid all their bills apart from the final four.

Newey LJ said that nowhere in the Solicitors Act did it state that a statute bill must encompass both profit costs and disbursements, “and I can see no justification for such a rule in the case law either”.

He went on: “Separate billing for profit costs and disbursements is common with modern, digital billing, and I do not accept that that need give rise to problems.”

He concluded: “I would allow the appeal. It seems to me that the fact that the various bills rendered by the appellant to Mr and Mrs Boodia included only profit costs or disbursements, not both, did not prevent them from being interim statute bills.”

Lords Justice Coulson and Haddon-Cave agreed.

Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.