QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| R (on the application of Scott Halborg, trading under the style of Halborg & Co, Solicitors)
|- and -
|The Law Society
Mr Clive Sheldon (instructed by Natalie Turner, the Law Society) for the Defendant
Hearing date: 18 December 2009
Crown Copyright ©
Mr Justice Keith:
The legal framework
"(a) after a bill has been delivered and paid by the client, other than by deduction;
(b) where a bill has been delivered, after the expiry of one month from the date on which the client was informed in writing of the matters specified in article 8 or from delivery of the bill if later; …"
Finally, Art. 12(1) provided:
"After an application has been made by a solicitor for a remuneration certificate the client may pay the bill in full without invalidating the application."
"A solicitor is entitled to select a point of time which he regards an appropriate point of time at which to send in a bill. But before he is entitled to require that bill to be treated as a complete self-contained bill of costs to date, he must make it plain to the client either expressly or by necessary implication that that is his purpose of sending in that bill for that amount at that time. Then of course one looks to see what the client's reaction is. If the client's reaction is to pay the bill in its entirety without demur it is not difficult to infer an agreement that the bill is to be treated as a complete self-contained bill of costs to date."
"Fees … It is our normal practice to ask you to make a payment on account of fees and expenses ('disbursements'), particularly as we are required by the Law Society and Bar Council to have funds with which to pay Counsel and other agents directly. We will write further later regarding the appropriate amount of a payment on account of costs and/or disbursements.
Billing We will send you our final account on completion of this matter. We reserve the right to issue interim invoices. Payment is due to us within 7 days of our sending you a bill. If a bill remains unpaid, we reserve the right to charge interest at 3% per month until payment is made. This is higher than the Court judgment rate.
Termination of retainer You may terminate your instructions to us in writing at any time but we will be entitled to keep all your papers and documents while there is money owing to us for our charges and expenses … We may decide to stop acting for you only with good reason; for example, if you do not pay a final or an interim bill or comply with our request for a payment on account. We must give you reasonable notice that we will stop acting for you. If you or we decide that we will no longer act for you, you will pay our charges as set out earlier."
Following that letter, the company paid the firm £1,000.00 on account of its fees, and a further £8,000.00 was paid on account of its fees on 27 February 2007 after the firm had submitted its first bill to the company of £1,123.59 (4¼ hours at £225.00 an hour plus VAT). Those sums were paid into the firm's client account.
The decision of the adjudicator
"[The bills are] a running commentary on the fees being incurred up to a point in time and there is nothing to suggest that these bills signalled a 'natural break' on the course of the retainer, which if it did, would lead to a different interpretation on their status. Despite Halborg & Co stating that their terms of business letter makes it clear that they have
'… the right to issue interim statute bills payable within 7 days'
their letter says nothing of the sort. The relevant paragraph in their letter states:
'We will send you our final account on completion of this matter. We reserve the right to issue interim invoices.'
When looked at with the bills delivered these two sentences support my finding that these were intended to be and were interim bills only as their letter anticipates sending a final bill perhaps preceded by the issue of interim invoices. There is no hint of the word 'statute' but even if there were I would be entitled to look at the bills themselves and interpret whether the content represented just an interim bill rather than an interim statute bill which is what I conclude."
"There is nothing in [Art. 4(1) of the 1994 Order] that supports Halborg & Co's statement that:
'… it is therefore up to the client to prove on the civil burden of proof that the request was made in writing within the one month timescale.'
It says no such thing directly or impliedly. The fact that Halborg & Co say that they did not receive [the company's] letter of 19 October 2007 does not mean that that letter was not sent. The letter exists and I have seen a copy of it and it is not for the [Legal Complaints Service] to require some sort of proof of posting. The existence of the letter is evidence, sufficient enough, for the [Legal Complaints Service] to accept that it was within the one month timescale for requesting a Remuneration Certificate. Similarly there is no requirement for [the company] to have sent the letter by Recorded Delivery or to have sought confirmation from Halborg & Co that they had received it. It is also entirely correct that it is in order for any one of the authorised officers of the company that is the Directors, to request it."
The nature of the bills
(a) one of them (bill 10) was for counsel's fees,
(b) three of them (bills 3, 5, and 9) were for counsel's fees and Mr Halborg's fees for a specified number of hours spent by him on work to which the retainer related,
(c) the remaining eight bills (bills 1, 2, 4, 6, 7, 8, 11 and 12) were all for Mr Halborg's fees for a specified number of hours similarly spent by him on work to which the retainer related,
(d) one of the bills (bill 5) related to 6.5 hours of work but charged for only 3.5 hours, and
(e) nine of the 11 bills which included fees for Mr Halborg's work (i.e. all of them excluding bills 3 and 4) related to a specific period during which the work was carried out (the period being at irregular intervals), and the remaining two bills (bills 3 and 4) appear to have related to a specific period during which the work was carried out but not a period covered by the other bills, namely the period from 16 March to 10 May 2007.
The effect of payment of the last bill
The communication of the requirement
"… the period for which interest may be charged may run from one month after the date of delivery of a bill, unless the solicitor fails to lodge an application within one month of receipt of a request for a remuneration certificate under article 4, in which case no interest is payable in respect of the period between one month after receiving the request and the actual date on which the application is lodged." (Emphasis supplied)
The direction which the adjudicator made