ATE Blog
Appeal judges block costs challenge
14th August, 2023
In what has been reported as a welcome decision, the Court of Appeal has ruled in favour of claimant solicitors in blocking a cost challenge.
In Menzies v Oakwood Solicitors Limited [2023] EWCA Civ 844, the Court of Appeal held that a solicitor's bill is paid when the claimant's solicitor sends a bill to the claimant after deducting damages.
In this case, the claimant's solicitors had acted for him in a personal injury case under the terms of a conditional fee agreement. Following settlement the claimant solicitors retained some of the damages for the purpose of costs and then sent an account to the claimant together with the balance of damages. The claimant sometime later sought an assessment of their costs.
Section 70 (4) of the Solicitors Act 1974 provides:
The power to order assessment conferred by subsection 2 shall not be exercisable on an application made by the party chargeable with the bill after the expiration of 12 months from the payment of the bill.
Therefore the question for the Court of Appeal to decide was simply what amounts to “payment”.
In their judgment, the Court of Appeal stated that it was clear that the CFA in this case and the accompanying documents specifically authorised the solicitors to recoup their fees out of the client's compensation up to a maximum of 25% of that compensation. Therefore “payment” of the bill took place when after delivery of the bill the solicitors made that deduction. It followed therefore the payment of the bill took place more than one year before the bill was challenged meaning that the court's power of assessment was barred by section 70 (4).
This is an important reminder to explain to the client at the outset the deductions to be taken from damages and the client’s right to have this assessed and the specific time limits under the Solicitors Act will start to run.
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