COST BITES 23: CLAIMANT FAILS IN APPLICATION FOR DELIVERY OF A SOLICITOR’S BILL OF COSTS: CHAMBERLAIN BILLS HAD BEEN SENT; A SIGNATURE ON AN EMAIL WAS SUFFICIENT; ELECTRONIC DELIVERY COMPLIED WITH THE SOLICITORS ACT

In Elias v Wallace LLP [2022] EWHC 2574 (SCCO) Senior Costs Judge Gordon-Saker dismissed the claimant’s application for a delivery of a bill of costs. He found that (i) the bills delivered were “Chamberlain” bills and had sufficient information for the claimant to know what was being charged; (ii) the electronic signature on the email that accompanied the bills was sufficient for the purpose of the Solicitors Act; (iii) the claimant had consented to communications by email.

THE CASE

The defendant is a firm of solicitors. Over a period of months it was retained by the claimant to act on his behalf in proceedings in the Business and Property Courts.  Over that period it issued six invoices.  The invoices were partially paid, some as the result of an interlocutory costs order, some by the claimant. There was a remaining balance of £27,168.   The claimant did not pay this and the defendant sent out a letter before action.

THE CLAIMANT’S ACTION

The claimant issued proceeding seeking delivery of a bill under the Solicitors Act 1974.

THE ISSUES

The defendant’s case was that bills had been delivered. The series of bills where “Chamberlain” bills. They were signed, the invoices that accompanied them were letters for the purposes of the Act and delivery of the invoices was effective.

THE CHAMBERLAIN BILLS

The Master explained the concept of a Chamberlain bill.
    1. In Chamberlain v Boodle & King [1982] 1 WLR 1443 the terms of the Defendants’ retainer did not allow for self-contained interim bills, but did allow for regular “statements”. The retainer lasted for 6 months over the course of which they delivered 4 bills to the Claimant. The court concluded that there had been no natural breaks, but that the bills “should be regarded as one bill in respect of one complete piece of work, although divided into parts”. As the Claimant had demanded taxation of the last within one month, he was entitled to have the whole of it taxed.
    1. In Bari v Rosen [2012] 5 Costs LR 851, the Defendant submitted 12 bills to his client over a period of 10 months, all of which were paid promptly. There was no contractual right to issue interim statute bills. The bills were treated as a series comprising a single bill, delivered at the date of the last in the series.
  1. In Vlamaki v Sookias & Sookias [2015] 6 Costs LO 827 the solicitors delivered a series of bills to the client and then sent a letter to the client stating that while “there may be further unbilled time … we are not proposing to invoice this and therefore there are no further sums due”. The Master concluded that the series of bills should be regarded as a single bill delivered on the date of the last. On appeal, Walker J decided that there had been no final bill. The letter did not change the nature of the bills.

WAS THERE A CHAMBERLAIN BILL IN THE CURRENT CASE?

The Master held that the bills delivered in this case constituted a “Chamberlain” bill.
  1. In the present case, the last invoice was not marked as “final”. However, unlike the earlier invoices for profit costs, it did not refer to “interim professional charges”. More significantly, in my view, the email dated 16th October 2020 from the Defendant to the Claimant, and to which the invoice was an attachment, referred to it as the “final invoice” and requested payment of the balance due so that the papers could be released to the Claimant’s new solicitors. The invoice covered the period “from 1 October 2020 to date”. It seems to me that this was clearly the final invoice. Vlamaki can be distinguished because, in the present case, the email enclosing the letter made it clear that this was the final invoice of a series as well as that the Claimant would receive no further bills from the Defendant.
    1. In the present case each of the invoices, apart from those for counsel’s fees and the last invoice for profit costs, were accompanied by time records. They were sent as an attachment to an email which preceded that which attached the invoice. The time records described the work done in respect of each item, the time spent, the fee earner involved and the hourly rate applied. That, it seems to me, provided sufficient information to the client to enable him to form a view as to the reasonableness of the charges.
    1. The last invoice, dated 15th October 2020, was not accompanied by the relevant time records. However, the Claimant determined the Defendant’s retainer on 12th October and so, at most, the invoice covered 12 days’ work and the amount of profit costs billed was only £1,903. With value added tax, that is less than 3 per cent of the total billed. Unlike the other invoices, there is a description of the work done; although not a description of every item of work done. Taken by itself, it seems to me that the description is sufficient information to enable the client to form a view as to the reasonableness of the charges.
  1. However,

    given my view that the invoices formed a Chamberlain bill, the overall level of information across the 6 invoices was clearly sufficient.

WERE THE BILLS SIGNED?

The Master found that the bills were not signed. However the solicitor’s name on the accompanying email was sufficient.

    1. It is not in issue that the invoices did not have a “wet ink” signature. Until somebody printed them, they existed only as an electronic file.
    1. Each invoice bore the name “Wallace”, a “W” logo and the firm’s physical address, telephone number and website address. In appearance, therefore, they were not dissimilar to a paper invoice printed on a firm’s pre-printed letterheaded stationery.
    1. Mr Griffiths submits that the printed name “Wallace” satisfies the definition of a signature in s.7(2), namely “anything in electronic form … incorporated into … any … electronic data … and [which] purports to be used by the individual creating it to sign”.
    1. In Neocleous v Rees [2019] EWHC 2462 (Ch) the issue was whether an exchange of emails could constitute a signed contract for the disposition of an interest in land for the purposes of s.2 Law of Property (Miscellaneous Provisions) Act 1989, where the purported signature of the defendant’s solicitor was the automatic generation of his name, occupation, role and contact details. While not expressly relying on the 2000 Act, HHJ Pearce concluded that the email footer was applied with authenticating intent. Even though it was generated automatically, the rule that it be added had involved a conscious action and the author knew that his name was being added to the particular email.
    1. While, in the present case, “Wallace” was incorporated into the electronic invoice, I find it difficult to conclude that the individual creating it purported to use the name to sign the invoice. I would assume that whoever created the invoice simply used a template which had the name and address included. The name is obviously just that – the name of the firm, as on a letterheading, rather than a signature.
    1. Further there is no evidence that the person who created the invoice was “the solicitor or … an employee of the solicitor authorised by him to sign” for the purposes of s.69(2A) of the 1974 Act. Presumably the person who created the invoice was authorised to create it, but there is no evidence that he or she was authorised to sign it.
    1. However I would reach a different conclusion in relation to the emails which accompanied the invoices. Each of them concluded:

Best regards,

Alex

Alexander Weinberg

Partner

[telephone numbers, firm name and physical and website addresses]

    1. Everything below the typed name “Alex” has the appearance of being generated automatically. It may well be that the words “Best regards” and “Alex” were also generated automatically.
    1. If the name “Alex” was not generated automatically, then it is easy to see that it is a signature which falls within the definition in s.7(2). Clearly it purported to be used as a signature.
    1. If the named Alex was generated automatically, following Nucleous, the automatic generation would not take it outside the definition. The email footer was clearly applied with authenticating intent, even if it was the product of a rule.
    1. So, in my judgment, the electronic signatures on the emails were electronic signatures for the purposes of s.69(2B). The question then arises as to whether the emails were letters for the purposes of s.69(2A)(b).
    1. “Letter” is not defined in the 1974 Act. In common usage, an email beginning with the salutation “Dear” and ending with felicitations might be thought of as a letter. However the OED definition might suggest otherwise:

“A written communication addressed to a person, organization, or other body, esp. one sent by post or messenger; an epistle.”

Definitions in other statutes, for example that in s.125 of the Postal Services Act 2000, would also suggest a requirement of physicality:

“letter” means any communication in written form on any kind of physical medium to be conveyed and delivered otherwise than electronically to the person or address indicated by the sender on the item itself or on its wrapping (excluding any book, catalogue, newspaper or periodical); and includes a postal packet containing any such communication”

    1. Such a definition should of course be viewed in the context of the particular statute. A definition of letter in a statute dealing with the physical carriage of post may well be different to that in a statute concerned with the communication of information. Given that the point is not clear, I think that it would be difficult to conclude that an email is a letter for the purposes of the1974 Act without applying an updating construction to that particular statute.
    1. It is clear that the courts will apply an updating construction to legislation unless the particular Act is intended to apply as it was passed and without change: Bennion, Bailey and Norbury on Statutory Interpretation (8th ed) section 14.1. There is nothing to suggest that Parliament intended that the 1974 Act should be preserved in aspic. Indeed the amendments which recognised the use of electronic signatures make that clear.
    1. In Attorney General v Edison Telephone Co of London Ltd (1880) 6 QBD 244, the question was whether communications by telephone, invented after the Telegraph Act 1869, fell within the definition of “telegram” in that Act. The Postmaster-General had the exclusive right of transmitting telegrams. Stephen J noted that the purpose of the Act was to create that monopoly and that:

“Of course no one supposes that the legislature intended to refer speci?cally to telephones many years before they were invented, but it is highly probable that they would, and it seems to us clear that they actually did, use language embracing future discoveries as to the use of electricity for the purpose of conveying intelligence.”

    1. It could be argued that the omission to amend the reference to “letter” to include an email was intentional. However I do not have the material to conclude whether that was intentional or an oversight.
    1. In my view the purpose of s.69(2A) is to convey to the client that the bill has been authorised by the solicitor. That can be done by either a signature on the bill or a signature on the communication that accompanies the bill. In my experience solicitors’ bills are sent to clients either by post, usually with an accompanying letter, or by email. Sometimes they are sent by both means. It would, as Mr Griffiths submits, be absurd if a solicitor, sending a bill by email, were required to send, as another attachment, a letter in pdf form which contained no more information than that contained in Mr Weinberg’s email.
  1. Accordingly, in my judgment, applying an updating construction, an email is a letter for the purposes of s.69(2A)(b).

 

WERE THE INVOICES DELIVERED TO THE CLAIMANT

The Master decided that the claimant had consented to electronic communications.
    1. It is not in issue that the invoices were sent to the Claimant as attachments to emails only. In his skeleton argument and in his oral submissions Mr Kendall submitted that the Claimant’s consent to clause 24.3 of the Defendant’s terms of business was not informed consent and that the Claimant had not indicated his willingness to accept delivery by email.
    1. Clause 24.3 provided that:

“You [the client] agree that we may serve formal notices and documents (including service of any legal proceedings) upon you by email, or any other method of electronic communications permitted by law, by using any email address or other electronic identification that you have provided to us, or that you have used for communicating with us.”

    1. While we await the decision of the Court of Appeal in Cam Legal Services Ltd v Belsner, the issue in that case is whether informed consent is required in respect of an agreement which expressly permits payment to the solicitor of an amount of costs greater than that which the client could recover from the opponent. It has never been the case that a provision in a solicitor’s retainer as to the mode of service of documents requires the informed consent of the client. It is not in issue that the Claimant agreed to the Defendant’s terms of business.
    1. While, as Mr Kendall submitted, clause 24.3 does not specifically refer to bills or invoices, it does refer to “documents”. It seems to me that the clear intention is that the solicitor is permitted to send documents by email, including formal documents, and that must include invoices. It would be absurd if the solicitor were permitted to serve a claim form in respect of unpaid fees by email but not the bill on which the claim was based.
    1. In my judgment, by clause 24.3 the Claimant had indicated his willingness to accept delivery of bills by email. However, in any event, it is clear from the correspondence exhibited to the witness statement of Ms Asher that the Claimant was willing to communicate and to receive communications by email at the address that he used. As she explains in paragraph 53, at the outset of the retainer, the Claimant’s daughter provided his email address. It has not been suggested that she was not authorised to do so. The Claimant returned his acceptance of the Defendant’s terms by email. He responded by email to the emails sending him the invoices. He determined the Defendant’s retainer by email. By this course of conduct, including his acceptance of the first 5 invoices by email, the Claimant indicating his willingness to accept delivery of bills by email.
    1. Accordingly I am satisfied that the invoices were delivered to the Claimant for the purposes of s.69(2C).
  1. Mr Kendall made it clear, both in his skeleton argument and his oral submissions, that the Claimant’s aim is to obtain a detailed assessment of the invoices. It follows from my decision that he will now need to show special circumstances and Mr Kendall was keen to tell me what they might be. However as the relief sought is limited to the delivery of a bill, whether there should be an order for detailed assessment does not arise. As Mr Kendall pointed out, even if the court does not order detailed assessment, if the Defendant sues for the outstanding fees, the Claimant may well obtain an order for a quantum meruit assessment. At the risk of repeating what I said at the hearing, the parties would be well advised to talk to each other to try to reach an accommodation which would avoid further costs.