Solicitors Act 1974: No Express Right to Render Interim Statute Bills Without "Final" Wording

TOPALSSON GmbH v CMS CAMERON MCKENNA NABARRO OLSWANG LLP [2025] EWHC 118 (SCCO)

Senior Costs Judge Gordon-Saker rules law firm’s retainer allowing monthly billing did not create interim statute bills, as bills must explicitly state they are “final” for that period to seal off assessment rights.

In my judgment, the Defendant was not entitled to render interim statute bills. The last bill, dated 30th May 2022, incorporating the earlier bills, is the final statute bill in respect of all of the work done under the two retainers. Accordingly, the bill falls within s.70(2) of the Solicitors Act 1974, justifying a detailed assessment without requiring special circumstances.

Citations

Richard Slade & Co v Erlam [2022] EWHC 325 (QB) A solicitor’s retainer that explicitly states monthly bills are final for the periods they cover allows the solicitor to render interim statute bills. Boodia v Slade [2023] EWHC 2963 (KB) A clear contractual right to render monthly bills that are final for the particular stage of work obviates any obligation on solicitors to explain the consequences of interim statute bills to clients. Ivanishvili v Signature Litigation LLP [2023] EWHC 2189 (SCCO) Wording in a retainer advising periodic billing for client awareness of incurred costs is consistent with the ability to provide a final bill later, rather than establishing the bills as interim statute bills. Chamberlain v Boodle & King [1982] 1 WLR 1443 (CA) In the absence of a right to render interim statute bills, interim invoices form part of a running account and should be treated as one final bill covering all work done when the retainer is concluded. Re Norman (1885-86) LR 16 QBD 673 Significant discrepancies or charges that appear unreasonably high in a bill justify detailed assessment as special circumstances may be present. Re Robinson (1867) LR 3 Ex 4 Unreasonable or large charges in a solicitor’s bill may amount to special circumstances warranting an order for detailed assessment. Falmouth House v Morgan Walker [2011] 2 Costs 292 (Ch) Special circumstances justifying detailed assessment require comparing the case in question against typical cases to determine if it stands out. Bentine v Bentine; Stone Rowe Brewer LLP v Just Costs Ltd [2016] Ch 489 (CA) Special circumstances need not be exceptional but must demonstrate significant reasons for allowing detailed assessment outside normal limitations. Eurasian Natural Resources v Dechert LLP [2017] EWHC B4 (Costs) Applications for detailed assessment filed within 12 months of a bill being delivered are usually allowed, provided there is no extraordinary reason for refusal, with terms often imposed. Crane v Canons Leisure Centre [2017] EWCA Civ 1352 Work performed by professionals, such as costs lawyers, is treated as profit costs when billed as such, aligning with the nature of the work done. Signature Litigation LLP v Ivanishvili [2024] EWCA Civ 901 The Court of Appeal reaffirmed the limited timeframes for challenging solicitor-client bills under the Solicitors Act 1974, describing them as “very tight.”

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Key Points

A solicitor’s retainer is an entire contract, and payment is generally due at the conclusion of the work or upon lawful termination. Interim bills may only be rendered where express agreement exists, a natural break occurs, or such agreement can be inferred from the parties’ conduct. [18]
Clause wording allowing monthly bills to “keep the client informed of the level of costs incurred” does not, without more, establish a right to render interim statute bills, particularly when the bills are not clearly designated as “final” for the relevant periods. [23, 25–26]
For a bill to qualify as an interim statute bill, its finality for the period it covers must be clearly stated or agreed upon in the retainer or inferred from the relationship or conduct of the parties. Ambiguity about the bill’s status will preclude it from being considered final for the period covered. [24–29]

Bills rendered without the contractual right to issue interim statute bills may be treated as a single “Chamberlain” bill, representing a running account that collectively forms one final statute bill only upon the last bill being issued. [31–33]
In cases of detailed assessment under s.70(2) of the Solicitors Act 1974 (where the bill was delivered within 12 months of proceedings), the court will ordinarily allow the assessment but may impose terms (e.g., requiring interim payments). [35]

In my view, the words in bold in clause 9.1 did not entitle the Defendant to render interim statute bills. Although it was provided that 'each bill will state the period which it covers', it was not stated that the bills would be final for that period. In the absence of a provision that the bills were 'final', it would be open to the Defendant to render a bill which 'covered' a particular month and subsequently render a bill in respect of further work done in the same month. 'Covered' does not mean 'sealed'.

Key Findings In The Case

The Defendant was not entitled to render interim statute bills because the wording in the retainer agreements and standard terms did not clearly establish the finality of the monthly bills for the periods they covered. The language used was consistent with final billing at a later point. [23–29]
In the absence of the right to issue interim statute bills, all the bills rendered by the Defendant prior to 30 May 2022 amounted to a single “Chamberlain” bill, with the last bill forming the final statute bill for the entire work under the retainers. [31–33]
The substantial increase in costs estimates over the course of the litigation (from £1.95m to £3.7m) called for explanation and constituted “special circumstances” under s.70(3) of the Solicitors Act 1974, justifying a detailed assessment of bills rendered more than 12 months before the commencement of proceedings. [44–46, 57]

The Defendant’s termination of the retainer in May 2022 was lawful due to the Claimant’s persistent failure to pay outstanding fees. The Defendant’s terms and conditions allowed for termination under such circumstances following reasonable notice. [41–43]
The court held that under s.70(6) of the Solicitors Act 1974, it had the power to order the detailed assessment of specific categories of costs (e.g., profit costs and Integreon’s fees) while excluding others, such as counsel’s fees and court fees, from assessment. [61–63]

Subject to agreement to the contrary, a solicitor's retainer is an entire contract and a solicitor is entitled to payment only at the conclusion of the work or upon lawful termination. An interim bill may be rendered only (a) where there is express agreement permitting it, (b) where there is a natural break or (c) where agreement can be inferred from the parties’ conduct.

Background

The case of Topalsson GmbH v CMS Cameron McKenna Nabarro Olswang LLP involved a dispute over legal costs. Topalsson, a German software company, engaged CMS Cameron McKenna Nabarro Olswang LLP for legal services in 2019. The services included drafting a contract and later litigating against a customer who terminated the contract. The litigation resulted in a judgment against Topalsson for €5 million. The dispute before the Senior Courts Costs Office concerned the status and assessment of 27 bills rendered by the Defendant between August 2019 and May 2022, totaling £2,151,614.41. The Claimant sought a detailed assessment of these bills under Section 70 of the Solicitors Act 1974.

Costs Issues Before the Court

The primary costs issues before the court were:
1. **Status of the Bills**: Whether the bills were interim statute bills or a series of on-account bills forming a single final statute bill.
2. **Application of Section 70 Solicitors Act 1974**: Under which subsection the bills fell and whether special circumstances existed for detailed assessment.
3. **Scope of Assessment**: Whether the court could order assessment of profit costs and specific disbursements, excluding counsel’s fees and court fees.

The Parties’ Positions

The Claimant argued that the bills were not interim statute bills but rather a series of on-account bills that together formed a single final statute bill. They sought detailed assessment of all bills, focusing on profit costs and specific disbursements. The Defendant contended that the bills were interim statute bills, with only the last bill being a final bill. They argued that the Claimant needed to show special circumstances for the assessment of bills delivered more than a year prior to the proceedings.

The Court’s Decision

The court determined that the Defendant was not entitled to render interim statute bills, as the retainers did not clearly indicate that the monthly bills were final for the period they covered. Therefore, the last bill dated 30th May 2022 was considered the final statute bill for all work done. The court found that the bill fell under Section 70(2) of the Solicitors Act 1974, as it was delivered within a year of the proceedings. The court also held that it had the power to order assessment of profit costs and specific disbursements, as requested by the Claimant. The issue of whether terms should be imposed for the assessment and whether a payment on account should be made was left for further submissions.

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