The number of solicitor and own client assessments has ballooned in recent times. This in turn has led to more and more arguments over whether solicitors' invoices comply with the Solicitors Act 1974 ("the Act") and obtain the hallowed status of being statute bills. Elias v Wallace LLP was a case concerning some of the technical requirements of a statute bill.
The Claimant brought Part 8 proceedings under s.68 of the Act seeking an order that the Defendant firm deliver a statute bill. Delivery of such a bill would start time running for an assessment under s.70 of the Act. The Defendant's answer to that claim was that the Claimant had already had delivery of a compliant bill and was therefore not entitled to another. The broader context of the claim was that if the Defendant was right and the invoices that it had produced were a statute bill, the Claimant would be out of time to have the Defendant's fees assessed unless he could show special circumstances.
Senior Costs Judge Gordon-Saker concluded that the Defendant was correct and ordered that the Part 8 claim be dismissed. He reserved his judgment because the claim concerned novel points relating to the requirements that a statute bill be delivered and signed in accordance with the Act.1
Delivery
The requirements of the Act relating to delivery are set out in s.69(2C-2D):
(2C) A bill is delivered in accordance with this subsection
if-
.
(c) it is delivered to that party-
(i) by means of an electronic communications network,
or
(ii) by other means but in a form that nevertheless requires
the use of apparatus by the recipient to render it intelligible,
and that party has indicated to the person making the delivery his
willingness to accept delivery of a bill sent in the form and
manner used.
(2D) An indication to any person for the purposes of subsection
(2C)(c)-
(a) must state the address to be used and must be accompanied
by such other information as that person requires for the making of
the delivery;
(b) may be modified or withdrawn at any time by a notice given
to that person.
It was agreed that the invoices had been received by the client by email, however he argued that he had not indicated that he was willing to have bills delivered in this way.
The Defendant relied on two points: (i) the terms of its retainer and (ii) the Claimant's general conduct of his relationship with his solicitors. The clause in the Claimant's terms of business stated:
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.
SCJ Gordon-Saker concluded that this was sufficient in itself to indicate the client's willingness to have bills delivered by email. He rejected the Claimant's contention that informed consent was required in respect of "a provision in a solicitor's retainer as to the mode of service of documents".2
However, the Defendant also relied upon the fact that the majority of the communications between the client and solicitors had been by email. As the Judge spelled out in his judgment:
.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.3
This behaviour was sufficient to demonstrate the indication required by the Act that delivery by email would be accepted.
Signature
The requirements of the Act that a statute bill be signed can be found in s.69(2A-2B):
(2A) A bill is signed in accordance with this subsection if it is-
(a) signed by the solicitor or on his behalf by an employee of the solicitor authorised by him to sign, or
(b) enclosed in, or accompanied by, a letter which is signed as mentioned in paragraph (a) and refers to the bill.
(2B) For the purposes of subsection (2A) the signature may be an electronic signature.
An electronic signature is defined by s.7(2) of the Electronic Communications Act 2000:
For the purposes of this section an electronic signature is so much of anything in electronic form as-
(a) is incorporated into or otherwise logically associated with any electronic communication or electronic data; and
(b) purports to be used by the individual creating it to sign.
There was no signature on the invoices themselves4 and the invoices were sent by email with no attachment save for the invoice. Two points therefore arose for consideration:
- Was there an electronic signature in the email.
- If so, was this sufficient given that the Act refers to a signed "letter" accompanying the bill.
Both questions were answered in the affirmative.
On the first of those questions SCJ Gordon-Saker applied the decision in Neocleous v Rees5 where it was determined that a signed agreement for the purposes of s.2 of the Law of Property (Miscellaneous Provisions) Act 1989 had been entered into by an exchange of emails with an automated signature footer in the respective solicitors' emails. As the Judge found:
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.
If the named Alex was generated automatically, following Nucleous (sic), 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.
So, in my judgment, the electronic signatures on the emails were electronic signatures for the purposes of s.69(2B).6
On the second question, the Senior Costs Judge accepted the Defendant's submission that he should adopt an updating construction to the meaning of the word 'letter' in the Act. In so doing he adopted the approach taken by the Court in Attorney General v Edison Telephone Company of London Limited.7 In that case the Court held that the exclusive right of the Postmaster General to transmit telegraphs should be extended to the telephone notwithstanding that the telephone had not been invented as at the date of the relevant legislation. SCJ Gordon-Saker held that:
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.[8]
And that:
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.9
He therefore held that it was appropriate to adopt an updating construction and to hold that that an email is a letter for the purposes of the Act.10 As the emails referred to the invoices in question all of the requirements of s.69(2A-2B) were met.
Conclusion
Whilst the Judge was undoubtedly correct to describe the issues raised in this case as novel, it is likely that are numerous similar instances where solicitors' invoices are being challenged. It is likely that solicitors have sent out invoices by email fully intending that the invoices would be paid by clients without turning their mind to the technicalities of the Act. Such solicitors will be relieved that their invoices will not be deprived the status of a statute bill because the commentary that they sent with their invoice was in the body of an email and not an attached letter.
The common-sense approach adopted by the Court in this case prevents what would otherwise be stale claims for assessment being resurrected by way of technical arguments on the compliance of an invoice with the delivery and signature requirements. It will still be necessary for it to be shown that there was an indication given for bills to be delivered by email; this will remain a fact sensitive determination.
Where special circumstances can be shown and the invoice has not been paid, the client will still have access to a statutory assessment. However, where the invoices were delivered and accepted by email and their authenticity was not in doubt, it is surely correct that a client cannot seek a second bite at the cherry by a technical point about signature or delivery.
Martyn Griffiths represented the Defendant in Elias v Wallace LLP [2022] EWHC 2574 (SCCO)
Footnotes
1. In addition, the Claimant argued that the invoices did not constitute either interim or final bills. That element of the Judge's decision is not the subject of this article but for completeness, the Judge accepted the Defendant's contention that taken together the invoices comprised a valid Chamberlain bill (paras.8-19 of the Judgment).
2. Judgment, para.40.
3. Judgment, para.42.
4. It was admitted that there was no 'wet ink' signature and the Judge rejected the somewhat ambitious submission that they were electronically signed in the name of the firm, as there was no evidence that the individual affixing it was authorised to sign it (para.25 of the Judgment).
5. [2019] EWHC 2462 (Ch.)
6. Judgment paras.28-30.
7. (1880) 6 QBD 244
8. Judgment, para.33
9. Judgment, para.36.
10. Judgment, para.37.
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