Then make sure your retainer is a contentious business agreement or your bills of costs are final statute bills, says Simon Browne KC.
Over 25 years ago, Lord Justice Simon Brown (as he then was) in the case of Abedi v Penningtons [2000] 2 Costs LR 205 said a solicitor/client retainer was a complete retainer where monies were not due until completion. Nevertheless, he observed that it was open to solicitors to agree the terms of payment under their retainer and the wiser amongst them did so.
In Harrods Ltd v Harrods (Buenos Aires) Ltd [2014] 6 Costs LR 975, 981, Mr Justice Jacob noted the modern practice of solicitors of sending bills on a regular basis which were complete, not interim, bills.
As Lord Justice Newey explained in Slade (trading as Richard Slade & Co) v Boodia & Anr [2018] EWCA Civ 2667 at [31], nowhere in the Solicitors Act 1974 was it stated that a statute bill must encompass both profit costs and disbursements and he could see no justification for such a rule in the case law.
He added that differential billing was common with modern billing practices and that this was not problematic as long at the interim statute bill was final for the period it covered. The bill was not just a payment on account but “is intended to be complete and final as regards its subject matter”.
Despite all the judicial guidance on billing to assist solicitors in managing cash flow, if a client chooses to subject the solicitor/client bill to a Solicitors Act 1974 detailed assessment, often the solicitor will fight tooth and nail to prevent it.
Solicitors who do good job for their client, and charge accordingly, are often taken aback by the client making a Solicitors Act 1974 application. They are even more taken aback to find that any bills rendered were not interim statute bills or that their contentious business agreement (CBA) does not pass muster.
Sometimes, the larger the firm, and larger the sums involved, the greater the problems.
Bills under a solicitor/client retainer
As readers will know, under the standard solicitor/client retainer, a bill rendered by a solicitor to his client may be one of three things:
- A ‘statute bill’ or, if the solicitor is entitled to render interim bills, an ‘interim statute bill’, that is, a final bill for the period that it covers, which complies with the requirements of the Solicitors Act 1974. It can be sued on by the solicitor under section 69 and which is capable of detailed assessment under section 70;
- A request for payment of a sum on account; or
- A Chamberlain bill, that is a series of bills which become a statute bill only upon delivery of the last bill, after Chamberlain v Boodle & King [1982] 1 WLR 1443.
Alternatively, the solicitor and client may have entered into a CBA, a written contract between solicitor and client setting remuneration for “contentious business” – legal work done in prospective or current court/tribunal proceedings.
Authorised by the Solicitors Act 1974, it allows for agreed-upon gross sums, hourly rates or salaries, often bypassing standard court assessment, provided the agreement is fair, reasonable, and complies with legal standards. The document can be reviewed by a costs judge as to reasonableness.
The case of Safra
In Alberto Safra v Wilmer Cutler Pickering Hale and Dorr LLP [2026] EWHC 703 (SCCO), Cost Judge Leonard heard argument over three days in October 2025 on a solicitor/client retainer. Costs silks were retained by each party. The sums involved were extraordinary – the total invoiced amount was over $35m, with an unpaid balance of nearly $19m.
The claimant engaged the defendant solicitor firm for legal representation in multi-billion-dollar family disputes, including five major arbitrations and related international litigation which involved a high-value, complex international dispute.
The costs judge delivered his judgment on 24 March 2026. It ran to 423 paragraphs with three tables of figures annexed thereto, and the judgment addresses both the contractual and statutory framework for solicitor/client costs, the conduct of the parties, and the outcome of the application for assessment.
Primary issue – Contentious business agreement
The main legal issue was whether the engagement letter constituted a CBA under section 59 of the Act.
Judge Leonard held it did not; the agreement lacked the necessary certainty, particularly because it allowed the defendant to unilaterally increase hourly rates at any time and by any amount, without a fixed mechanism or client agreement.
This uncertainty is inconsistent with the statutory requirements for a CBA. He also found that if it had been a CBA, then he would have set it aside as unreasonable for the same reason.
Interim statute bills
The engagement letter allowed for the delivery of monthly statements, which could have been interim statutory bills if they were final for the period covered. But the Judge found that the invoices were not because they were not final (each stated they included only services and disbursements “posted to date” and could be updated later).
Instead, all invoices together formed a single Chamberlain bill delivered on 17 September 2024.
As the claimant had applied for assessment within three months of its delivery, the court had jurisdiction under section 70(2) to order assessment of the entire Chamberlain bill. Judge Leonard added that there was no need to establish ‘special circumstances’ for assessment, but found that such circumstances would have existed if required.
The judge elaborated and explained he had found that the defendant failed to provide the claimant with regular, adequate information about accruing costs, as required by the SRA Code of Conduct. This failure, combined with the extraordinary scale of fees and lack of clear estimates, would have constituted ‘special circumstances’ justifying assessment if needed.
The defendant’s unilateral increases in hourly rates without notice were also criticised.
Consequently, the judge ordered a detailed assessment. No further conditions, such as additional payments on account, were imposed, as the claimant had already paid a substantial portion of the fees.
Conclusion
In one of the lengthiest and detailed judgments to come out of the Senior Courts Costs Office on a two-party application, Judge Leonard provides a comprehensive analysis of the statutory and contractual framework for solicitor/client costs, emphasising the need for certainty, fairness and transparency.
The court’s decision to order assessment without conditions reflects both the scale of the dispute and the conduct of the parties, particularly the solicitor’s obligations under the SRA Code of Conduct.
The scale of the litigation and the costs involved – be they small or enormous – does not matter regarding the basic principles of a solicitor/client retainer. The detail of such retainers must set out all fee mechanisms (including any right to increase rates) and must be clearly defined and agreed in writing. The same applies to the provisions of estimates.
There must be specific and clear and accurate agreement for the provisions of interim statute bills. When issued and served on the client, interim bills must make clear whether they are final for the period covered to avoid disputes over statutory status.
Sometime solicitors are embarrassed to do so but they must maintain regular, proactive communication with clients about costs, especially in high-value or complex matters.
Such an approach makes for a better defence to an application for a solicitor/client detailed assessment of the challenge to a bill through establishing special circumstances to circumvent the statutory time limits.
Postscript
The costs judge conducted extremely useful analyses on a number of topics relevant to regular solicitor/client costs issues. He did not provide an index for the 423 paragraphs. The following may assist:
- Contract of retainer and instructions: paragraphs 47-53
- Invoicing: 54-60
- Discussions on fees and retainer: 61-115
- Hourly rate rises: 139-142
- Argument over valid CBA: 143-188
- Conclusion over being a valid CBA: 189-214
- Unfair/unreasonable retainer: 215-223
- Whether bills served under retainer: 224-241
- Conclusion bills under retainer: 242-250
- Were they interim statute bills: 251-261
- Conclusion on interim statute bills: 262-282
- Special circumstances: 329-382
- Conclusion on special circumstances: 383-408
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