In the recent case of ENRC v Dechert , the Claimant successfully argued that there were “special circumstances” which justified there being a Detailed Assessment of invoices Under Section 70(3) of the Solicitors Act 1974 which states :
Where an application under subsection (2) is made by the party chargeable with the bill—
(a)after the expiration of 12 months from the delivery of the bill, or
(b)after a judgment has been obtained for the recovery of the costs covered by the bill, or
(c)after the bill has been paid, but before the expiration of 12 months from the payment of the bill,
no order shall be made except in special circumstances and, if an order is made, it may contain such terms as regards the costs of the taxation as the court may think fit.
The Claimant, by virtue of the Act, could only seek an assessment as of right in respect of invoices rendered less than 1 month before the Application was made. These themselves were in the region of £5,500,000.00. However, there were a number of invoices dated 1- 12 months pre Application date that totalled around £4,200,000.00 and as such in order for these to be subject to Detailed Assessment the Claimant had to argue that there were “special circumstances” as to why they should be permitted to have these assessed.
There were a number of arguments advanced by the Claimant, namely :
- The Defendant failed to give an initial estimate of costs and it’s subsequent failure to give an adequate costs estimate
- Size of the Invoices
- The fact that there was to be a Detailed Assessment of a substantial part of the Defendant’s charges in any event
- Impossibility of the Claimant challenging the Defendant’s invoices during the currency of the retainer
- The Defendant’s approach to billing queries during the retainer
- Specific billing irregularities
- The Defendant’s attempt to avoid scrutiny of the charges
The first argument that there was a failure by the Defendant to give an initial estimate of costs and it’s subsequent failure to give an adequate costs estimate was enough to convince Master Rowley that there were “special circumstances” subsequently allowing the invoices to be subject to Detailed Assessment. Master Rowley stated that the lack of detailed invoices, failure of the Defendant to update estimates or breakdown those provided and a lack of justification of the excess over the estimate constituted special circumstances.
Furthermore he went on to say that in his view it was only the 3rd factor that he did not believe amounted to a “special circumstance”. He believed that the peculiarities of the Solicitor/Client relationship made Solicitors Act Applications unrealistic (there were weekly and monthly invoices raised) combined with the Defendant’s response to any challenges, the Defendant’s approach to the proceedings and the billing irregularities which he felt all constituted “special circumstances” .
It is abundantly clear that this is another case expressly detailing the importance of costs estimates and detailed invoices which Solicitors should not ignore. By tapping into our breadth of experience in Costs Budgeting at MRN, we are able to prepare an estimation of costs to help our clients better inform their clients. If you would like to know how to manage your costs more effectively and maximise your profit, please contact us for an in-house training seminar or for more details on how we can assist with providing estimates of costs for cases.