High-value bill disputes highlight urgent need for reform, says ACL

Two recent High Court rulings have highlighted the urgent need for reform in the legal framework governing billing arrangements, according to the Association of Costs Lawyers (ACL). These rulings highlight how current laws, particularly those under the Solicitors Act 1974, are outdated and causing significant disputes over billing practices.

The ACL, representing regulated costs professionals, asserts that the law must be updated to eliminate preliminary arguments over whether a bill is a formal bill or merely a request for payment on account. These preliminary disputes often precede any substantive debate over the bill's contents. The Solicitors Act, unchanged for 50 years, is due for a review to address these issues.

The Senior Costs Judge, Andrew Gordon-Saker, and the Law Society also support the call for a review of the Act. Meanwhile, the ACL advises solicitors to consult experts to ensure their retainers are clear and precise to avoid potential billing disputes.

In one notable case, Costs Judge Nagalingam ruled against the national law firm Weightmans, which argued that its retainer allowed for interim statute bills—final invoices for specific periods of work rather than payments on account. Due to this ruling, 47 bills totaling £3 million now face detailed assessment, meaning each charge will be examined line-by-line. If these had been interim statute bills, clients would have only had 28 days to request an assessment after delivery of each bill.

In a similar case, Costs Judge Whalan rejected 34 bills worth £226,000 from the London firm Hodge Jones & Allen, leading to a detailed assessment of these bills. Judge Whalan remarked that such disputes "should rarely if ever come before the court," emphasising that solicitor/client retainers should involve straightforward legal drafting without any ambiguities.

Judge Whalan expressed frustration over the profession's failure to draft retainers clearly: "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."

ACL chair Jack Ridgway highlighted the significance of these decisions: "These latest decisions are far from the first where law firms have fallen foul of this out-of-date Act but the figures involved indicate the jeopardy and risk they run. We need a fresh framework in line with modern legal practice and one that is easily explicable to clients – they cannot be expected to have a grasp of technical costs law when receiving a bill."

Jack Ridgway also urged law firms to have experts review their retainers and terms and conditions to avoid similar adverse rulings in the future. The recent High Court decisions serve as a stark reminder of the need for clear, precise, and updated legal frameworks to govern billing practices in the legal profession.

Legal framework governing billing arrangements, according to the Association of Costs Lawyers (ACL). These rulings highlight how current laws, particularly those under the Solicitors Act 1974, are outdated and causing significant disputes over billing practices.

The ACL, representing regulated costs professionals, asserts that the law must be updated to eliminate preliminary arguments over whether a bill is a formal bill or merely a request for payment on account. These preliminary disputes often precede any substantive debate over the bill's contents. The Solicitors Act, unchanged for 50 years, is due for a review to address these issues.

The Senior Costs Judge, Andrew Gordon-Saker, and the Law Society also support the call for a review of the Act. Meanwhile, the ACL advises solicitors to consult experts to ensure their retainers are clear and precise to avoid potential billing disputes.

In one notable case, Costs Judge Nagalingam ruled against the national law firm Weightmans, which argued that its retainer allowed for interim statute bills—final invoices for specific periods of work rather than payments on account. Due to this ruling, 47 bills totaling £3 million now face detailed assessment, meaning each charge will be examined line-by-line. If these had been interim statute bills, clients would have only had 28 days to request an assessment after delivery of each bill.

In a similar case, Costs Judge Whalan rejected 34 bills worth £226,000 from the London firm Hodge Jones & Allen, leading to a detailed assessment of these bills. Judge Whalan remarked that such disputes "should rarely if ever come before the court," emphasising that solicitor/client retainers should involve straightforward legal drafting without any ambiguities.

Judge Whalan expressed frustration over the profession's failure to draft retainers clearly: "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."

ACL chair Jack Ridgway highlighted the significance of these decisions: "These latest decisions are far from the first where law firms have fallen foul of this out-of-date Act but the figures involved indicate the jeopardy and risk they run. We need a fresh framework in line with modern legal practice and one that is easily explicable to clients – they cannot be expected to have a grasp of technical costs law when receiving a bill."

Ridgway also urged law firms to have experts review their retainers and terms and conditions to avoid similar adverse rulings in the future. The recent High Court decisions serve as a stark reminder of the need for clear, precise, and updated legal frameworks to govern billing practices in the legal profession.