A solicitor who claims the right to retain all of the money received for a client’s fixed costs and disbursements must still render a complete and final bill that details them, a costs judge has ruled.
Master Leonard in the Senior Courts Costs Office ordered Oxfordshire firm Brethertons to do so after a former personal injury client instructed Checkmylegalfees.com to consider the deductions made from their damages.
In Allen v Brethertons LLP  EWHC B15 (Costs), Brethertons settled Norman Allen’s claim for £7,146 and told him he would receive £5,359 after deducting its 25% success fee. It also took a further £70 – on top of £90 Mr Allen had already paid on account – for disbursements not covered by the defendant, meaning he was paid £5,289.
This was despite the retainer saying that the firm would “limit the total amount of charges, success fees, expenses and disbursements (inclusive of VAT) payable by you (net of any contribution to your costs paid by your opponent) to a maximum of 25% of the damages you receive”.
Master Leonard said this meant the claimant was entitled to receive a minimum of £5,359, along with the return of the £90, totalling £5,449.
The firm admitted before the court that this was right. The judge said that just because the claimant accepted what his solicitors told him, it did not mean he had agreed to vary the terms of the retainer.
“Even if the parties had purported to (as they clearly did not) enter into a variation entirely advantageous to the defendant [Brethertons] and disadvantageous to the claimant, it would have failed for want of consideration (and might have put the defendant, professionally speaking, in an embarrassing position).”
After initial contact from Checkmylegalfees, Brethertons sent Mr Allen a cheque a “gesture of goodwill”, when in fact it was a refund of the money it had overcharged him.
The firm delivered one bill for “our professional charges regarding our success fee in relation to your personal injury claim”; it did not detail any of the disbursements incurred on his behalf.
Checkmylegalfees requested that the firm provide a statute bill – that is, a final and complete bill, enforceable and subject to detailed assessment on application by the solicitor or the client – but Brethertons did not respond and so an application came before Master Leonard.
He ordered that such a bill be rendered, rejecting the argument that fixed costs belonged to the solicitor and thus the single bill for the success fee alone was a statute bill.
Master Leonard ruled that fixed costs belonged to the client, even though the fact the sum was prescribed by statute meant they were not open to challenge under the indemnity principle.
The fixed costs were only described at CPR 45.18 as “the legal representative’s costs” to distinguish them from an advocate’s costs, he said.
Master Leonard continued: “[Brethertons’] submission is also inconsistent with the terms of retainer between the parties, which, in the usual way, made the claimant responsible for all of the defendant’s costs and disbursements on the basis that his liability would be reduced by costs recoverable from his opponent.
“An estimate was given (and, in correspondence, updated) on that basis. The defendant cannot on the one hand hold the claimant contractually responsible for all its costs and disbursements (even on a capped basis) and on the other assert that he is not entitled to receive a bill for, or challenge, part of them because they are not his costs.”
Further, what was sent to Mr Allen could not be a final bill because it did not detail the disbursements, further to the law as set down 108 years ago by the Court of Appeal in Cobbett v Wood.
While Brethertons was right to say that the content of a solicitor’s final bill was “ultimately” a matter for them, he continued, “this does however miss the point that the solicitor is bound by that final bill and cannot charge to the client any item of costs or disbursements omitted from the bill.
“If the defendant, as it does, claims the right to retain all of the money received by it for the claimant’s costs and disbursements, then it must render a complete and final bill which includes them.”