As a firm, we have seen a substantial increase in the number of Solicitor own Client disputes over the past 9 years. Whilst there have been a significant number of issues regarding “shortfall” disputes and issues that have recently been discussed in the case of Belsner, there has definitely also been an increase in disputes over Solicitors’ fees in general with enquiries being received multiple times a week regarding potential disputes.
What was this case about?
The Claimant (Mr Elias), issued Part 8 Proceedings under Section 68 of the Solicitors Act 1974, seeking delivery of a statute bill from the Defendant (Wallace LLP). However, it was the Defendant’s belief and understanding that the Claimant had already had delivery of a compliant statute bill and therefore no further delivery was required. For those that may not be aware, the importance and significance of this point is key. If the Defendant had accepted that delivery of a statute bill was required and served a new bill, then the period of time for requesting an assessment under Section 70 of the Solicitors Act 1974 would start running from service of that bill, however, if the Defendant was correct in their belief (i.e., that delivery of a statute bill had already taken place) then the Claimant was out of time to have the invoices assessed unless he could successfully argue there were “special circumstances”.
There were 2 key issues that this case highlights the importance of, firstly whether the invoices had been correctly delivered and, secondly, whether they had in fact been correctly signed. In respect of delivery, the Claimant argued he had not consented to delivery of the invoices by email and in respect of the point regarding the invoices being signed, the Claimant advanced an argument that as there was no signature on the invoices themselves and that there was no attachment to the email containing the invoice save for the invoice itself, therefore Section 69 of the Solicitors Act had not been satisfied.
What do the rules say?
Section 69 of the Solicitors Act 1974 states: –
(2C)A bill is delivered in accordance with this subsection if—
(a)it is delivered to the party to be charged with the bill personally,
(b)it is delivered to that party by being sent to him by post to, or left for him at, his place of business, dwelling-house or last known place of abode, or
(c)it is delivered to that party—
(i)by means of an electronic communications network, or
(ii)by other means but in a form that nevertheless requires the use of apparatus by the recipient to render it intelligible,
and that party has indicated to the person making the delivery his willingness to accept delivery of a bill sent in the form and manner used.
(2D)An indication to any person for the purposes of subsection (2C)(c)—
(a)must state the address to be used and must be accompanied by such other information as that person requires for the making of the delivery;
(b)may be modified or withdrawn at any time by a notice given to that person.
What did the Court say on email delivery?
There was no dispute between the parties as to whether the invoices had been received by the Client by email, however, the Claimant averred that he had not indicated that he was willing or agreeable to have invoices delivered in this way.
The Defendant was able to refer to the terms detailed in the retainer with the Client in so far as the retainer stated “You [the client] agree that we may serve formal notices and documents (including service of any legal proceedings) upon you by email, or any other method of electronic communications permitted by law, by using any email address or other electronic identification that you have provided to us, or that you have used for communicating with us.” Master Gordon-Saker agreed with the Defendant that this term was sufficient to indicate that the Claimant was willing to have invoices delivered by email despite the fact that the Claimant attempted to argue that informed consent was required. It seems, that as well as the initial retainer documentation being supportive, it was also the way in which the Claimant communicated with the Defendant generally whilst the matter was ongoing that was a key factor in the decision taken by the Court. It was clear that email communication had been utilised by the Claimant for instructions on the case, the retainer had been sent and responded to by email and this was key. I suspect, that had email communication been out of the ordinary that Master Gordon-Saker may not have been as easily persuaded. However, it was these actions that led to Master Gordon-Saker finding that this was sufficient to be able to trigger the requirement by the Solicitors Act 1974 that delivery by email would be accepted.
What did the Court say on signature of the bills?
The requirements of Section 69 of the Solicitors Act 1974 state :-
(2A) A bill is signed in accordance with this subsection if it is–
(a) signed by the solicitor or on his behalf by an employee of the solicitor authorised by him to sign, or
(b) enclosed in, or accompanied by, a letter which is signed as mentioned in paragraph (a) and refers to the bill.
(2B) For the purposes of subsection (2A) the signature may be an electronic signature.
An electronic signature is defined by Section 7 of the Electronic Communications Act 2000 which state :-
For the purposes of this section an electronic signature is so much of anything in electronic form as–
(a) is incorporated into or otherwise logically associated with any electronic communication or electronic data; and
(b) purports to be used by the individual creating it to sign.
The Court gave consideration to the points and utilised the case of Neocleous v Rees [2019] EWHC 2462 (Ch.) which led to the decision that an automated signature footer was clearly applied with authenticating intent and as a result the electronic signatures on the emails were electronic signatures satisfying the criteria in Section 69 of the Solicitors Act 1974.
In respect of the word “letter”, the Claimant argued that the Defendant had not satisfied the requirements of the 1974 Act as no separate letter (as detailed at 2A (b)) had been sent. However, with the assistance of the case of Attorney General v Edison Telephone Company of London Limited (1880) 6 QBD 244, in which the Court held that the exclusive right of the Postmaster General to transmit telegraphs should be extended to the telephone, the Defendant was able to successfully argue that it would be absurd if a Solicitor were required to send an additional attached letter containing no more information than the email containing the invoice itself. This was a clear common-sense approach, the email in which the Defendant sent the invoice simply referenced the attached invoice and there was no other reason for which an additional letter was required. Master Gordon-Saker therefore held that it was appropriate to adopt an updating construction of the rules and to hold that an email is a letter for the purposes of 2A (b) of Section 69 of the Solicitors Act 1974 given that the emails referred to the invoices in question. As a result, all the requirements of 2A and 2B were met.
Conclusions
Master Gordon-Saker concluded that the Defendant was correct, Judgment was reserved because the claim concerned novel points. The points taken, were such technical points, and points which the Court dealt with in a sensible and pragmatic way. This case though was based on a very particular set of factual circumstances, and I add a note of caution to anyone who believes that this makes the requirements of the Solicitors Act any easier on firms. It absolutely does not. There still needs to be a level of compliance, albeit Master Gordon-Saker has taken a very sensible view, that does not mean there should be any blasé approach taken in complying with the Solicitors Act. It does however, give some food for thought to anyone thinking that they can try and utilise novel or technical points at trying to get a Solicitors Act assessment “through the back door”.