A commercial firm has lost its appeal against a decision that its monthly invoices worth £12.8m were not statutory bills. Signature Litigation appealed after it was taken to court by a billionaire Georgian businessman, Bidzina Ivanishvili, who wanted his legal bills assessed.
The bills had all been paid but the former client submitted to the court that they could still be assessed. That was because the contract of retainer between the parties incorporated a conditional fee agreement and those invoices represented only a part of the fees that might become due to the firm for the work undertaken.
The firm argued that the invoices rendered were, at the time of delivery, complete and final bills. In effect, only the last bill, dated October 2022, could be open to assessment, but otherwise they were all paid and the claimant had no right to challenge them.
In Ivanishvili v Signature Litigation LLP, Costs Judge Leonard found that none of the invoices issued over the six-year period were statutory bills.
Signature appealed on the ground that the invoices in question could be interim statutory bills for the purposes of s.70 of the Solicitors Act 1974. Benjamin Williams KC, for the firm, argued if these were not interim statutory bills his clients faced the possibility of bills going back to 2016 being challenged and said the decision could have a chilling effect on the use of CFAs more widely.
Williams also said this area of law had become ‘blinded by its own specialism’, and that highly technical arguments were blurring the straightforward resolution of these issues, which he said was behind a surge in the number of disputes arising under s.70.
However, ruling on the appeal, Lord Justice Coulson said the Court of Appeal had not received any representations from the Law Society or any of the other organisations that often seek to intervene in costs cases. He also cited three previous CFA cases where each court rejected the solicitor’s claim that the bill in question was an interim statutory bill.
‘A further decision to the same effect should not come as a surprise to those solicitors undertaking work on this basis,’ the judge said, adding that s.70 provided ‘a highly technical form of protection to solicitors by limiting the period of challenge to one year after the bill has been paid.
‘That was not a problem in the past, because solicitors’ bills were usually rendered at the end of their work’, he said. ‘Now solicitors sensibly seek interim payments, but they still want the protection of s.70, even under CFAs. As the authorities demonstrate, they make uneasy bedfellows.’
The appeal was dismissed.
