s68 Solicitors Act 1974 | Solicitors Ordered To Deliver A “Complete” Bill | Karatysz Applied

Hensley v Morris Law [2024] EWHC 1101 (SCCO) involved a Part 8 Claim by Mr Aaron Hensley (the claimant) against Morris Law Limited (the defendant) seeking the delivery of a statute bill of costs together with the costs of the application. The application was made pursuant to section 68 of the Solicitors Act 1974.

Chronology of relevant events

• 26 June 2018: The claimant suffered an accident leading to a personal injury claim.
• The defendant law firm acted for the claimant in claiming compensation for the personal injury and consequential loss.
• 22 September 2022: The defendant rendered a bill to the claimant seeking £3,750 plus VAT (£4,500 in total) as a success fee, calculated at “25% of £18,000 as per the No Win No Fee Agreement.”
• 18 October 2023: The claimant issued a Part 8 Claim Form seeking delivery of a statute bill of costs.

Issues to be decided

The main issue to be decided by the court was whether the bill rendered by the defendant on 22 September 2022 complied with the requirements of a statute bill under the Solicitors Act 1974. If not, the court would need to determine whether the claimant was entitled to an order for delivery of a compliant bill.

Parties’ positions and arguments

The claimant argued that:

• The defendant had not provided a complete bill of fees, charges, and disbursements due in respect of the business done, as required by case law such as Cobbett and Ors v Wood [1908] 2 KB 420.
• The Court of Appeal’s decision in Karatysz v SGI Legal LLP [2022] EWCA Civ 1388 confirmed the ongoing requirement for solicitors to provide complete bills, stating what sums have been paid, by whom, when, and in what way, as well as the outstanding sums claimed.
• The claimant was entitled to a compliant statute bill upon request, regardless of whether the claimant intended to seek an assessment of the costs under section 70 of the Solicitors Act 1974.

The defendant argued that:

• The 22 September 2022 bill provided sufficient information for the claimant to understand the success fee calculation and that enough work had been done to justify the fee.
• Personal injury solicitors typically render bills at the “natural break” point when the substantive claim concludes, before costs are recovered from the opposing party.
• As the claimant was not being asked to pay any unrecovered base costs, there was no benefit to the claimant in receiving a further bill detailing the costs recovered from the tortfeasor.
• The claimant had provided a five-star review in a quality questionnaire, making it “disappointing that the claimant is now seeking to question the success fee deduction.”

Costs Judge Rowley’s findings

The judge found that the bill rendered by the defendant on 22 September 2022 did not comply with the requirements of a statute bill under the Solicitors Act 1974, as it only dealt with the success fee deduction and failed to provide a complete account of fees, charges, and disbursements.

He emphasised that clients are entitled to a compliant statute bill upon request, regardless of the solicitor’s view on the merits of any potential assessment under section 70 of the Act.

Consequently, the claimant’s application for delivery of a final statute bill was successful, and the claimant was awarded the costs of the application in accordance with CPR 44.2.

“I have set out the final paragraph of Mr Morris’s second witness statement because it seems to me that it highlights his approach to the entirety of this application. He has focused almost exclusively on the success fee that was deducted from the claimant’s damages and does not seem to have considered any other matters that the claimant might be wishing to consider. As Mr Simpson submitted, the great majority of Mr Morris’s submissions in this case related to whether or not a section 70 assessment of the defendant’s charges would be successful or not. [15]

“But that is not the purpose of this application and it is not for the defendant to decide whether or not the claimant has a case to bring under section 70. Indeed, there is some old case law which suggests that even if the client was not able to bring section 70 proceedings through being time-barred, that was not an answer to an application for the delivery of the bill. All clients are entitled to a bill which complies with the Solicitors Act at the end of their dealings with their solicitor. If that is not provided because, as in this case the solicitor takes the view that the client will not wish to have a compliant bill but simply one that deals with the most obvious element of the charges, then the solicitor is obliged to provide a compliant bill when it is specifically requested by the client. As I say, it is not for the solicitor to decide whether the client has potential grounds to bring a claim for an assessment of that bill or bills. [16]

“Consequently, even if all that Mr Morris said was correct in terms of the work done et cetera, it does not detract from the fact that the client has sought a compliant statute bill to be provided in the absence of having received one to date. The authorities that I have cited at the beginning of this decision make it entirely clear that a complete bill is required and that is not satisfied by the bill rendered in September 2022. That bill only provides for the success fee deduction and does not attempt to provide the information which would make it a complete bill as, for example, described by the Master of the Rolls in Karatysz. [17]

“In the circumstances, the claimant’s application is successful for a final statute bill to be provided. Having been successful, it would be expected that the claimant will receive his costs for having to make this application in accordance with CPR 44.2. [18]

“In order to avoid arguments that are sometimes raised based on the Master of the Rolls dicta in Belsner and Karatysz, I will indicate at this point that I do not understand them to relate to section 68 applications. The description of expensive High Court litigation for potentially trivial claims relates to section 70 applications. In order for the client to decide whether or not to bring any proceedings, a section 68 application has to be made. There is no method of obtaining the delivery of an invoice other than via section 68 and, in itself, it is not an expensive mechanism. The costs of these proceedings may be rather higher but that is as a result of a contested application. Most of the applications that come before this court under section 68 are dealt with by consent.” [19]