An interim statute bill does not need to include disbursements

It is common for solicitors to interim bill. An interim invoice may or may not be a ‘statute’ invoice. If it is a statute invoice it will be bona fide compliant with the Solicitors Act 1974. This is significant not least because (a) a statute invoice will found a claim (i.e. a solicitor can sue his client) for payment and (b) the time limits for assessment at section 70 of the Solicitors Act 1974 (“the Act”) will apply.

If an interim bill is not a statute invoice it will be a request for payment on account. If so, the solicitor will be unable to sue on the interim ‘account’ bill. In the event that the request for payment on account is not complied with, the solicitor’s only sanction is to withdraw from the retainer.

This came before the court in Richard Slade and Company Solicitors v Boodia and Boodia [2018] – EWHC Civ 2667

The issue was whether the solicitor’s invoices were interim statute bills, i.e. (i) whether the solicitor was entitled to render interim statute bills (there is no implied right for a solicitor to deliver interim bills, if a solicitor wants to deliver interim bills (other than at a natural break, such as at the conclusion of stages in proceedings), for example on a monthly basis, then there must be an express agreement to that effect) and (ii) whether they were complete and self-contained bills of costs incurred to a specific date or in relation to a specific aspect of the retainer.

The SCCO and the High Court (hearing the appeal from the SCCO) found that the solicitor’s invoices were not interim statute bills they did not include disbursements. The High Court’s view was that an interim statute bill must contain all costs (profit costs and disbursements) in respect of a defined period or stage in the litigation because the client needs to know the total costs incurred at a given point to enable her or him to determine whether to exercise the right to assess/challenge the bill.

The Court of Appeal

The Court of Appeal overturned the decision and held that a solicitor’s invoice could be an interim statute bill for the relevant period, even though it did not contain disbursements incurred during that period. The Court of Appeal found that the Act gave no indication as to whether profit costs and disbursements had to be billed together – the Act was neutral on this point. However, as a matter of practicality and policy, it was unsatisfactory for a solicitor to be unable to issue a statute bill until it had been invoiced for all disbursements incurred during the relevant period which left the solicitor dependent upon third parties, such as experts and counsel, to raise invoices.  On the question of a client’s ability to ascertain whether to assess a bill, a bill containing profit costs only would not necessarily fail the test of containing sufficient information.

Accordingly, a bill can be a statute bill even though it only includes profit costs or disbursements, and not both, for the period it covers.