Historic High Court success for gunnercooke Dispute Resolution team

Recent Success

The gunnercooke Dispute Resolution team has been successful in a significant case at the High Court.

The recent judgment of Costs Judge Whalan in the Senior Courts Costs Office has once again thrust the issue of solicitor-client retainers into the spotlight, raising repeatedly aired questions for the need to have clear and unambiguous wording when establishing a contractual right to render interim statute bills for clients.

The case

gunnercooke LLP, instructed by Giuliano Davide Stella, brought a claim for detailed assessment of eight invoices from 2021 by Mr Stella’s previous solicitors, Hodge Jones & Allen LLP (“HJA”). Mr Stella had instructed HJA in 2017 in relation to a property litigation matter, which soon advanced to issued proceedings. During their instruction HJA rendered 34 invoices for Mr Stella in excess of £200,000, notwithstanding that the final estimate provided was £150,000 to £175,000 for “completion of [Mr Stella’s] case”. At the point of dis-instruction the proceedings had progressed only up until disclosure.

Whilst the claim was initially issued for assessment of the final eight invoices on 29 April 2022, it was made clear in correspondence and accepted by HJA that Mr Stella “reserved the right… [to argue] that [the 26] other invoices should also be subject to assessment”.

Accordingly, gunnercooke LLP subsequently prepared and issued an application for assessment of the remaining 26 invoices, seeking to have the assessment consolidated within the initial proceedings. The application was resisted by HJA and was heard in person at the Thomas More Building on 19 October 2023, with Costs Judge Whalan’s judgment subsequently handed down on 2 July 2024.

The Judgment

The judgment highlights the need to establish a contractual entitlement to render interim statute bills at the outset of instruction and to explain clearly client entitlements under the Solicitor Act 1974.

In his judgment, the Judge remarked: “A solicitor/client retainer requires the application of straightforward legal drafting. Any relevant uncertainties, twists or pitfalls have been considered exhaustively in the contemporary jurisprudence. There is no real excuse for imprecision, uncertainty or ambiguity. If a solicitor wants to provide for the demand and payment of interim statute bills, then the retainer should express an unequivocal provision to this effect. The profession’s consistent failure to do so is, frankly, baffling”.

The Judge ruled that “on a straightforward contractual interpretation” HJA’s retainer did not entitle it to render interim statute bills (notwithstanding that some of HJA’s covering letters referred to an apparent right to render interim statute bills) and, citing Vlamaki v Sookias [2015] EWHC 3334, determined that any ambiguity ought to be resolved in Mr Stella’s favour. Having adjudged in Mr Stella’s favour in this regard, the Judge went on to exercise his discretion under s.70(4) of the Solicitors Act 1974, finding that Mr Stella had demonstrated the existence of ‘special circumstances’ and ordered a detailed assessment of the outstanding 26 invoices. 

What does this mean?

The judgment highlights the pitfalls of inadequate and imprecise retainers and the potentially significant consequences that may follow.

There have been growing calls for reform of the Solicitors Act 1974. Picking up on this judgment, The Association of Costs Lawyers has advocated the need for a “fresh framework in line with modern legal practice”, whilst the body for regulated costs professionals has called for the law to be updated to avoid preliminary arguments over whether a bill is actually a bill, or a request for payment on account, before any debate as to its contents arises.

About gunnercooke

The gunnercooke LLP team consisted of James Pheasant, Partner, and Samuel Holmes, Trainee Solicitor, in the Bristol litigation team. Costs disputes are an area of expertise for the Bristol gunnercooke commercial litigation team.

At gunnercooke we strive to find the most commercial, pragmatic and cost-efficient routes for our clients, which includes consideration of modern and innovative costs arrangements with our clients.