Oakwood v Menzies [2024] UKSC 34 is a recent Supreme Court judgment where all five Justices agreed that it was of “central importance” for clients to consider the details of their solicitor’s bill of costs and what amounts to payment.

The issue of the matter concerns whether or not mere deduction of the solicitor’s costs amounted to delivery of the solicitor’s bill. The delivery of the bill enables clients to review the costs before they are deducted from any award.

Mr Menzies engaged Oakwood’s legal services to pursue a personal injury claim for £275,000 in 2019. Mr Menzie was successful in their personal injury claim and a success fee of 25% was agreed to be paid to the Oakwood Solicitors.

The firm delivered a final bill to Mr. Menzies.

 The total bill amounted to £78,000, £38,000 of which was recovered. There was a remaining balance of £36,000 which was due by Mr Menzie.

April 2021, Mr Menzies sought a detailed assessment of the bill, however, this was rejected by the Costs Judge, as more than 13 months had lapsed since payment of the final bill.

The High Court allowed for a detailed assessment of the bill. The Court of Appeal overturned those decisions. Subsequently, this triggered Mr. Menzies’ appeal to the Supreme Court.

Oakwood argued that firms are already required to set out the likely costs that would be incurred. This in turn leads to clients agreeing to a success fee deduction from damages awarded. Any further requirement for another agreement in respect of the final bill would cause undue delay in payments of the final bill, where there already exists an agreement to a percentage deduction.

Lord Hamblen provided the lead judgment, noting numerous previous authorise all supporting the need for consent or agreement about the amount of costs to be paid. Mere delivery of the bill is not sufficient to demonstrate consent nor agreement of the sums to be paid out.

In situations where clients enter into conditional fee agreements and where they have agreed to a success fee deduction of their award, the Supreme Court has found that clients should be given the opportunity to review the detailed bill. Such an opportunity was not provided to Mr. Menzies as the costs were deducted from the award of damages before Mr. Menzies had an opportunity to review the bill.

“The right to seek assessment, and any assessment carried out by the court, involves a dispute as to the amount of costs claimed and is directed at the specifics of the bill of costs,’

That being so, it would be surprising if payment was to occur without there being any opportunity for the client to consider the detail of the bill of costs and to decide whether and to what extent it should be paid.’

From a consumer protection perspective, clients are placed in a better position to be able to not only agree but understand the breakdown of costs. This creates informed consent to deductions which were initially agreed upon based on speculative figures, but equally provides clients with an opportunity to review bills before deductions are made.  Though this will inevitably trigger a review or change of funding models, the aim would be to reduce the number of litigious challenges to cost bills.