Billionaire client wins right to challenge series of 79 monthly invoices worth nearly £13m

27 September 2023

Credit Suisse Group headquarters in Geneva

A billionaire businessman has successfully argued that none of the 79 invoices worth nearly £13m he received over six years are statutory bills, meaning they remain open for challenge.

Judge Leonard in the Senior Courts Costs Office held that there was nothing in the retainer of City firm Signature Litigation that authorised the delivery of interim statutory bills.

Bidzina Ivanishvili, from Georgia, is suing Credit Suisse for the alleged mismanagement of his assets, including the proven fraudulent activities of his former relationship manager, and losses claimed in the hundreds of millions of US dollars.

The litigation is highly complex, extending to multiple jurisdictions around the world, and Mr Ivanishvili instructed Signature in 2016 as global co-ordinating counsel. Between 31 March 2016 and 26 October 2022, the firm rendered 79 monthly invoices totalling £12.8m. All have been paid.

The part 8 application, Ivanishvili v Signature Litigation LLP [2023] EWHC 2189 (SCCO), sought to preserve Mr Ivanishvili’s rights to challenge the bills through a section 70 assessment. His primary case was that none of the invoices qualified as statutory bills because the retainer incorporated a discounted conditional fee agreement (CFA) and the invoices represented only a part of the fees that may become due – in the event of success, both an uplift fee and a success fee were payable. As a result, they were neither complete nor final.

As a result, he argued, the time to make an application for assessment would not start to run until a final bill was delivered.

Signature submitted that the invoices were, at the time of delivery, complete and final bills, meaning that only the last bill was open to assessment, subject to the claimant establishing special circumstances for the others.

Alternatively, it said the invoices became final statutory bills when it terminated the retainer in September 2022. It would follow that the court could order now that the entire series could be assessed but there would be no delay pending the delivery of any further bill.

Judge Leonard said the normal principles of contractual interpretation applied in deciding whether a retainer empowered a solicitor to render interim statutory bills – it was not a question of informed consent.

He added: “Assuming that it is possible to agree that interim statutory bills may be rendered for any unconditional element of a solicitor’s charges under a CFA, one would expect the relevant retainer to contain clear terms overcoming the difficulties of reconciling the conditional element of any CFA with the concept of a complete and final interim bill.”

The judge held that the retainer did not confer any contractual right on Signature to render interim statutory bills.

“The June 2016 retainer did provide for the defendant to render regular invoices, normally monthly, which would identify (as they subsequently did) their full value at the defendant’s standard hourly rates and which would be (as they subsequently were) accompanied by a breakdown of the hours worked by each fee-earner.

“Read as a whole, but with particular reference to paragraph 6.1 of the June 2016 terms, it is clear that the June 2016 retainer provided that whatever further charges might be rendered by the defendant for the period covered by each invoice would be based upon the same work.

“What the June 2016 retainer (or the terms of business that accompanied it) did not say was that the defendant’s monthly invoices would be final. That is wholly unsurprising, given that it was understood that each invoice represented only part of the defendant’s fees for the work described in the accompanying breakdown.

“That the conditions under which any further charges would be payable for that work had not yet been agreed, only served to increase the uncertainty surrounding the final charge to be rendered.”

The proposition that the solicitors’ monthly invoices were to be final was also “inconsistent” with the retainer, which provided that a final invoice would be sent when the work encompassed by the retainer had been, or was about to be, completed. The monthly invoices helped keep the claimant “informed of the costs which are being incurred”, the retainer said. This was “a phrase consistent with final billing at a later point”, the judge said.

There was nothing in the parties’ conduct to indicate an agreement to deliver interim statutory bills, he went on, and a 2021 variation of the retainer did not change that.

Judge Leonard also rejected the argument that termination of the retainer was a ‘natural break’ at which Signature was entitled to finalise its billing. The problem was that the billing was not yet final: “The defendant reserves the right to charge more for the work that has been done.” This meant the Chamberlain principle “has no application”.

Nor could the termination of the retainer be identified as a natural break. “I can find no basis for concluding that on the termination of the retainer on 23 September 2022 either party intended, contrary to the terms of the June 2016 retainer (either before or after variation from 19 September 2021), that in consequence all bills were to become final. That would require, on the defendant’s part, an abandonment of any further claim for payment for the same work, and that is not the defendant’s position.

“I believe that the correct interpretation of the position must, consistently with the provisions of the June 2016 retainer as varied in September 2021, be that the invoices delivered to date can only be finalised when either the defendant delivers a bill for such additional fees as may be due (for the balance of its hourly rates and/or, as appropriate, the uplift fee and the success fee) or the defendant accepts that nothing further is due, and finalises its billing on that basis.

“In those circumstances it could be right to treat the monthly invoices rendered by the defendant to date as part of a Chamberlain series, but not otherwise.”

Roger Mallalieu KC (instructed by Blake Morgan) for the claimant. Ben Williams KC (instructed by Signature Litigation) for the defendant.

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27 Sep 2023

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