Issues
Mrs. Mordue instructed Freeths LLP from November 2021 to October 2023 regarding complex probate and Inheritance Act matters. She paid a series of bills totaling around £486,000. After terminating the relationship, she sought either delivery of a final statutory bill or assessment of the bills paid.
Amongst the issues raised were:
Whether the retainer permitted interim statute billing under the Solicitors Act 1974.
Whether the invoices met the statutory requirements for clarity and finality.
The claimant argued that the bills were not valid interim statute bills and that as a result she was not time barred from having the costs assessed.
Decision
The court ordered Freeths to issue compliant statutory bills.
Retainer Terms – No Valid Interim Statute Billing
The judge found the retainer agreements did not entitle Freeths to deliver interim statutory bills.
The retainers failed to meet the standard of clarity required to allow for interim statutory billing. It was not sufficiently clear that each interim bill was final for the period it covered. Phrases like “we will carry forward to a future bill any unbilled work” were inconsistent with the finality required for interim statutory bills. Similarly, the option to carve out unbilled work (even if by agreement) was 'plainly inconsistent with charging by interim statutory bill', with such flexibility to alter billing after the fact inconsistent with the client's protection under the Solicitors Act 1974.
Costs Judge Brown emphasized that 'if solicitors are entitled to serve statute bills on an interim basis… the protection afforded to the client is defeated' by such vague and inconsistent terms.
The form and content of the bills - Non-Compliance with the Solicitors Act 1974
The firm’s interim bills also lacked sufficient detail to be statute bills, as they prevented the client from properly assessing costs as the case progressed. While invoices need not explicitly state the period covered, the absence of clarity about that, particularly where disbursements were billed separately (as per Richard Slade v Boodia) created ambiguity. The court emphasised that clients cannot assume that invoices align with the last billing date without clear confirmation. Costs Judge Brown found:
The bills were not sufficiently clear - only the issue date was shown, not the billing period.
The billl narratives were inadequate - many lacked sufficient detail to enable the client to assess the reasonableness of charges.
There was a lack of clarity in division of workstreams - with overlap and confusion between Inheritance and Probate billing streams. Overlapping billing periods and misallocation between workstreams, undermined the completeness of the bills.
The Judge further noted that judge noted that regular communication with the client did not amount to providing sufficient billing information, and nor could subsequent provision of time ledgers retrospectively cure the defects in the original bills.
Special Circumstances for Assessment (s.70(3) of the Solicitors Act 1974)
Even if bills had been statutory, assessment would have been ordered due to special circumstances, including:
The client's vulnerability (age, mental capacity, anxiety).
The confusing and irregular billing structure.
Inconsistencies in internal cost allocation between workstreams.
The substantial discrepancy between what the client was charged (£260,000 for Probate) and what was claimed in inter partes costs (£127,000).
Work on the solicitor's own billing being charged to the client – which is typically non-recoverable.
Lessons
Billing Clarity: Where disbursements are billed separately, invoices must unambiguously specify the period covered; this must either be on the bill itself or in accompanying correspondence.
Transparency: Firms must ensure clients can easily track billed work, providing sufficient detail, and avoiding overlap and ambiguity that could invalidate invoices.
Retainer Drafting: Retainers must clearly explain billing arrangements and be sufficiently clear where statutory billing is intended.
The case underscores the courts’ strict approach to billing compliance and serves as another reminder to firms relying on interim billing, that lack of clarity or finality may render putative invoices unenforceable.
