Cost News

Rebecca Mogford

First we had Belsner, then we were swiftly followed by the case of Karatysz v SGI Legal LLP [2022] EWCA Civ 1388 which I think we can safely say gave more practical guidance to Solicitors.

A further re-affirming of the view in Belsner was made in this Judgment regarding the unsatisfactory view of the Court regarding expensive High Court litigation assessing modest Solicitors’ bills and that in their view the Legal Ombudsman would be a more effective method of dealing with matters. As we said in our article on Belsner, we see this as quite an unrealistic view in reality. The delays the Legal Ombudsman has are months and as we all know; challenging Solicitors’ fees quite often comes down to timing.

So what does this case us tell us in relation to bills? The Court were very clear that in their view, 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.

The Court also said that the practice of imposing conditions on the face of a statutory bill was confusing and unhelpful and the Court were very clear on that. If conditions are to be imposed, they should be transparent. If, for example, the bill is for £5,000, but the Solicitors wish to say that they will accept £4,000 in full and final settlement if payment is made within 14 days, that should be clearly stated.

The Court have provided some clear practical guidance on how bills should be constructed, not just from a legal perspective but a good practice perspective. One of the elements to take from this Judgment is the transparency point, it is abundantly clear the Court believe Solicitors should be transparent regarding the bills and what is paid, outstanding and what sum is being demanded of the client. Subsequently, we would recommend Solicitors review and consider their billing procedures in light of the guidance.