A costs judge has expressed his frustration that the courts are still being asked to rule on disputes about retainers. In judgment in Stella v Hodge Jones & Allen, Costs Judge Whalan found the profession’s failure to resolve these issues ‘frankly baffling’. In the context of modern legal practice, he added, this type of dispute should ‘rarely if ever come before the court’.
Property litigation client Guiliano Stella had brought an action against his former representatives, London firm Hodge Jones & Allen, over costs of £226,000 claimed through 34 invoices. The claimant requested detailed assessment of 26 of the invoices and asked the court to decide whether they were delivered as interim statute bills or as a series of interim invoices.
Before giving his decision on whether the 26 invoices should be subject to assessment, Whalan said such issues should not have to come before the court as solicitor/client retainers should involve ‘straightforward legal drafting’.
He added: ‘There is no real excuse for imprecision, uncertainty or ambiguity. If a solicitor wants to provide for the demand and payment of interim statute bills, then the retainer should express an unequivocal provision to this effect. The profession’s consistent failure to do so is, frankly, baffling.’
Between October 2017 and November 2021, the firm had delivered the 34 invoices and has received almost £200,000 in payment. The parties had already agreed that eight invoices should be subject to detailed assessment but the claimant wanted to widen this to the remaining 26. The firm said the application to broaden the scope of assessment was too late and would prejudice the fair and proportionate determination of existing proceedings.
The firm’s retainer had set out under ‘billing arrangements’ that it would send the client interim bills, usually every month, and then ask for further money on account of costs. HJA submitted the terms of the retainer meant it was entitled to render interim statute bills.
But the judge found that the invoices delivered were interim bills on account and not statute bills. The time for requesting a detailed assessment therefore began in November 2021 with the delivery of the final bill. The application, Whalan held, was not made too late.
The judge said that where the wording of the retainer was ambiguous, then the benefit of the doubt should go with the claimant. He further ruled that there was no implied agreement in the retainer that the firm could render interim statute bills. The fact that the client made regular payments on account did not support the firm’s case.
The claimant has also submitted that the firm failed to provide him with adequate costs information in its estimate the work would cost up to £175,000. He told the court he was a ‘consumer’ within the Consumer Rights Act 2015 and that the issue of ‘estimates’ should be seen through this prism.
The judge ordered detailed assessment of all 34 invoices and ruled that the case be listed for a further directions hearing.
