Compl-i - August 2009

The Death of Remuneration Certificates

On 11 August 2009, the remuneration certificate procedure will be abolished. Until now, the Solicitors’ (Non-Contentious Business) Remuneration Order 1994 governed the requirements of solicitors when issuing a bill for non-contentious business. An option available to a client has been to request a remuneration certificate if they dispute the bill that has been issued. Article 6 of the 1994 order required solicitors to inform an entitled person of their right to a remuneration certificate, their statutory rights to assessment (taxation) by the court and your right to charge interest on a bill.

However, a new Order – the Solicitors’ (Non-Contentious Business) Remuneration Order 2009 comes into force on 11 August which does not refer to remuneration certificates and thus, this option will no longer be available to clients in respect of bills dated on or after 11 August.

Therefore, if your normal procedure is to include the requisite client information on your bills, you will need to make amendments to your billing procedures to take account of the changes.

The “emergency” rule change

The SRA has introduced an emergency new rule 2.08 to the Code of Conduct to tie in with this change. Your obligations (as from 11 August) are as follows:

Before bringing proceedings to recover non-contentious costs, or if you deduct your costs(other than disbursements) from money held for or on behalf of a client or estate in satisfaction of a bill and an entitled person objects in writing to the amount of the bill within the prescribed time (3 months after delivery of the bill or a lesser time as specified in writing at the time of delivery of the bill or notification, such period being not less that one month), you MUST

• inform the client/entitled person in writing of their rights in relation to having the bill assessed by the court under sections 70,71 and 72 of the Solicitors Act 1974
  
• inform the client in writing that you are entitled to charge interest on the outstanding amount of the bill in accordance with Article 5 of the Solicitors’ (Non-Contentious Business) remuneration Order 2009.

Your standard documentation should therefore be amended to remove any reference to a client’s right to request a remuneration certificate as this is no longer available.

New Guidance from the SRA

The SRA will also issue new guidance as part of its guidance on complaints handling to cover the situation where the client is unhappy with your bill. Note that this applies to both Non-Contentious and Contentious work. It suggests:

“Where your client is unhappy with your bill, you should treat this like any other complaint about your service. In such circumstances it may be helpful, when responding to a complaint, to provide a detailed narrative of your bill so that your client can clearly understand how the costs were incurred. You may be required to provide the LCS with such a narrative where a complaint about your bill is referred to them.”

Proposals for a new rule

The SRA is consulting on a new rule as to whether you will be required to inform your clients that they have a right to object to a bill by way of the firm’s complaints procedure. If the client remains unhappy, they may be able to make a complaint to the LCS(or the OLC in the future) and/or by applying to court for an assessment of the bill under Part III of the Solicitors’ Act 1074.

It is envisaged that the information you will have to provide to clients about their rights in this respect will need to be detailed on the bill itself, or by way of an accompanying letter.

The consultation is attached as a link below.

http://www.sra.org.uk/sra/consultations/3254.article