String of invoices worth £3m “not interim statute bills”

Costs judge finds major firm’s retainer did not allow it to issue such bills

A leading national law firm has failed to convince a costs judge that nearly 50 invoices totalling £3m were interim statute bills.

Costs Judge Nagalingam held that the retainer did not permit Weightmans to issue interim statute bills and their status was not clear anyway. He ordered it to deliver a final bill.

In Lansdowne Group Ltd & Anor v Weightmans LLP [2024] EWHC 1600 (SCCO), the law firm acted for the claimants in bringing an ultimately unsuccessful £37m claim.

It raised and issued 47 invoices during the retainer period totalling just shy of £3m. The last six invoices were not paid, leading to Weightmans issuing part 7 proceedings and obtaining default judgment for £618,126, plus interest and costs.

The claimants issued part 8 proceedings, seeking a stay of the part 7 action; one element of their claim is for delivery of a bill compliant with section 69 of the Solicitors Act 1974, given their contention that the bills delivered were not statute bills.

The hearing concerned the question of whether the invoices were interim statute bills or requests for payments on account and, if the latter, whether they formed a Chamberlain bill.

Weightmans argued that it had an agreement to issue interim statute bills but the judge found the retainer was not clear on this.

For example, the client-care letter (CCL) said the firm would “report the value of the work-in-progress each month so that you can keep a handle on the rate at which costs are being incurred”. As invoices were raised monthly thereafter, “it is difficult to see” why the claimants would not have viewed them as anything other these reports, he said.

Judge Nagalingam said: “In my view, and without having to ‘hunt’ for it, the contract in this matter does not expressly provide for the raising of interim statute bills, and if it does then it is in ambiguous terms at best.

“That is the case even when put in the full collective context of client care letter, terms & conditions, bills as they appeared upon presentation, and the contemporaneous correspondence I have been taken to.”

Section 11 of the terms and conditions, headed ‘Billing arrangements and payments on account’ (with no distinction drawn between the two, the judge noted), said that, unless otherwise agreed, “we will submit a statutory interim bill for our charges and expenses at the end of every 28 days while the matter is in progress. We may submit other bills if we need to incur substantial expenses on your behalf. We will send a final bill after the matter has concluded”.

Judge Nagalingam said: “In my view, section 11 fails to adequately distinguish between what is a ‘payment on account’ and what is a ‘billing arrangement’, nor does it adequately explain what the ‘billing arrangement’ is and means for the client? There is also the caveat of ‘Unless otherwise agreed…’, and rather than exhaustively listing where it might be ‘otherwise agreed’, it simply states ‘(perhaps in the CCL)’. Given the content of the client care letter (as set out above), it remains unclear that the defendant’s intention was to issue interim statute bills, final, complete and self-contained for the period purportedly covered.

Also, by saying the firm may submit other bills, “the provision does not explicitly make it clear that such a bill may be treated as complete and final for the period covered. Indeed, it arguably suggests the opposite”.

The judge noted too the phrase ‘statutory interim bill’: “A lay client is not necessarily expected to understand the correct legal terminology. A solicitor is. Referral to ‘a statutory interim bill’ is similar but not the same terminology as an ‘interim statute bill’, such that a lay client could reasonably be expected to treat the terms as meaning the same thing.”

In any case, the judge went on, the invoices were not clearly interim statute bills. They were not described as such on their face, for one thing: “It strikes me would not be onerous for each invoice to bear the words, ‘This is an interim statute bill’, if that was the intention, followed by an extract of the relevant provisions showing the time limits under the Solicitors Act 1974.”

Though there could circumstances where conduct through payment of invoices may be a factor in finding them interim statute bills, they did not exist here.

Separately, there was also overlap between some bills and Judge Nagalingam said Weightmans had not presented “a clear and compelling argument as to why any bills which feature an overlap can still be a valid interim statute bill”.

He concluded by finding no Chamberlain bill, saying the chain was broken. “There are simply too many occasions where the issued invoices could not be considered to be interim statute bills due to overlap (discussed above) such that the chain has been broken on multiple occasions.”

Judith Ayling KC (instructed by Croft Solicitors) for the claimants. Imran Benson (instructed by Weightmans) for the defendant.

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Published date
26 Jun 2024

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