Costs judge suggests that something akin to the N242A form could be way forward
Costs Judge Jason Rowley last week asked the profession for thoughts on drafting a precedent bill of costs.
He told the ACL London conference that, while he was not representing the Civil Justice Council working party currently reviewing the Solicitors Act 1974 (SA), he was there “with its blessing”.
Judge Rowley – who is to be interim Senior Costs Judge pending the appointment of a replacement for the retiring Andrew Gordon-Saker – said: “We want clients to be able to challenge solicitors’ bills… and we want solicitors to be able to pursue clients who don’t pay their fees.
“But the dispute ought to be about the fees. It ought to be about the contents of the bill, what’s in there, what work was done, and so on. It shouldn’t be ‘Is this a bill before me?’ It’s a bit Hamlet, frankly.
“And then you end up with a court trying to rescue things with concepts like Chamberlain bills, which aren’t really Solicitors Act bills but we’re going to treat them as such so that we can get on and deal with the substance of it.”
Though the initial reaction to the idea of a precedent bill to cut through this was usually positive, Judge Rowley went on, actually devising one was more difficult.
He reviewed the various options, starting with legislation. Would this need SA reform, or perhaps the Legal Services Act 2007? Could the Consumer Rights Act 2015 do the job, as it did recently in a dispute over a direct access barrister’s fees? The problem could be that this becomes overly prescriptive, when more flexibility was needed.
An alternative was an industry-led approach, such as was used to develop the electronic bill. “Who the stakeholders are in relation to a bill is an interesting question,” Judge Rowley mused.
He highlighted paragraph 46 of the Court of Appeal’s 2022 ruling in Karatysz v SGI Legal. This said: “Properly drawn bills ought in future to state the agreed charges and/or the amounts that the solicitors are intending by the bill to charge, together with their disbursements. They should make clear what parts of those charges are claimed by way of base costs, success fee (if any), and disbursements. The bill ought also to state clearly (i) what sums have been paid, by whom, when and in what way (i.e. by direct payment or by deduction), (ii) what sum the solicitor claims to be outstanding, and (iii) what sum the solicitor is demanding that the client (or a third party) is required to pay.”
This was very much a litigator’s bill, and indeed a personal injury litigator’s, rather than a transactional lawyer’s, Judge Rowley noted. It was also quite repetitive.
A starting point would be a very traditional solicitor’s invoice with a figure for services provided. “It may be that that’s all that’s required in lots of situations, particularly you have an agreed fee then you can deal with it in a brief fashion. I think probably you won’t have many arguments about it.”
Judge Rowley set out on screen how this could be adapted in light of Karatysz but explained that it became complicated as it dealt with deductions and payments from the opponent, and would struggle to encompass the variations of what needed to be in different bills.
Example bills, such as at the end of practice direction 47, would probably be insufficient, he added, moving on to the part 36 offer form, N242A.
“My first reaction was that this doesn’t look like a bill… But having looked at it, I wonder whether something along these lines might be a way of dealing with a proforma or precedent bill because it has within it a variety of methods to clarify or explain or sift the information that’s actually required.” This would include a personal injury section, say, to deal with deductions and success fees, that could be ignored in other cases.
The bill could also have notes and details about time limits on the back, something bills generally do not currently do.
Judge Rowley highlighted a bill he had seen that did this and also explained the one-fifth rule, which he described as “very sensible”.
More questionable was how it outlined the likely costs of the challenge that the ex-client would have to pay if it failed. “It did make me wonder whether an ex-client can rely on an estimate in the same way that an existing client can on an estimate if they went to court and found that actually the costs were much more expensive than they thought they were going to be.”