The Gazette 1971

above those justly due. Where interest is payable under such security no distinction appears to exist between costs for contentious and costs for non-contentious matters. (4) Future Costs (a) Non-contentious business Paragraph 7 of the S.R.G.O., 1884, mentioned above entitles the solicitor to accept from his client security for the amount to become due to the solicitor for busi- ness to be transacted for him and for interest on such amount but so that interest is not to commence until the ambunt is ascertained either by agreement or taxation. ' (b) Contentious business As mentioned, Section 16 of the Attorneys and Solici- tors Act, 1870, enables a solicitor to take security from his client for future fees, charges and disbursements to be ascertained by taxation or otherwise. If the agree- ment includes a provision of interest on future costs it would have to be in writing under Section 4 of the same Act and would be subject to examination by the taxing master. The position as regards non-contentious business would appear to be adequately covered by par. seven of the Solicitors Remuneration General Order, 1884, if the reference to interest at 4 per cent were changed ot a reference to interest at current bank rate from the date of delivery of the bill and if the taxing masters were given a direction to include the interest automatically on taxation of the costs. The inclusion of similar provi- sions as regards contentious business would also require amending legislation. Lastly, the matter would have to be considered from the point of view of the public relations of the profession. It would probably have a detrimental effect although it is now becoming common practice of trading and com- mercial concerns to notify customers that outstanding amounts will carry interest at a specified rate. The personal relations of solicitors with their own clients from the operation of such provisions would be a matter for individual practitioners. Many would not wish to claim interest from established clients. The member who raised the question noted the grow- ing tendency of commercial firms to tighten credit to one month from the date of presentation of the account. The Revenue Commissioners charge interest on monies outstanding and it appears that the solicitor is in a more difficult position. It has not been the practice of clients to pay or solicitors to charge interest on long standing accounts. The member suggested with a view to minimising the situation where work is finished and fees are outstanding for years despite application conse- quent upon the solicitor being reluctant to sue his own client whether it would be feasible in any legislation dealing * with solicitors' accounts that the accounts should bear interest at current bank rate from a date three months after the furnishing of the account. If this interest was to be computed annually at a com- pound or even simple rate it would have the effect of giving people an inducement to pay their accounts promptly. The Council while considering the matter of consid- erable importance to the profession were of the opinion that it would be inopportune at the present time to apply for any alteration in the law or practice of the taxing office in regard to the matter of interest on costs. It is, however, a matter to be borne in mind in any negotiations with the statutory committees dealing with costs or with the Department of Justice.

apportion the purchase price between the several folios in the same proportion as the rateable valuation for the purpose of ascertaining the costs. INTEREST ON COSTS The Council was asked to advise a member who drew attention to the unfavourable position of solicitors who often remain out of their costs and outlay for consid- erable periods. Even where interest can be charged it is at a rate of 4 per cent and the costs and outlay when received are often of considerably lower purchasing power than at the time when the work was done. Accountants use the term "discounted cash flow" to indicate the effect of inflation on delayed receipts. The legal position with respect to interest on solicitors' costs is shown below. (1) Before Judgment (a) Non-contentious business Section 5 of the Solicitors Remuneration Act, 1881, enacted that any general order under the Act might authorise and regulate the taking by a solicitor from his client of security for future remuneration in accordance with any general order to be ascertained by taxation or otherwise and the allowance of interest. Clause 7 of the Solicitors Remuneration General Order, 1884, pro- vides that a solicitor may accept from his client and a client may give to the solicitor security for the amount to become due to the solicitor for business transacted by him and for interest on such amount but so that interest is not to commence until the amount is ascer- tained either by agreement or taxation. A solicitor may charge interest at 4 per cent per annum on his disburse- ments and costs whether by scale or otherwise from the expiration of one month from demand from the client. It has been held that the mere delivery of a bill is sufficient demand sot hat a delivered bill for non- contentious work carries interest at 4 per cent from one month after delivery at least in the absence of unreas- onable delay in claiming interest. It is not apparently the practice of the taxing masters to compute interest under paragraph seven and must therefore be recovered by action [re Keeping and Gloag (No. 2) (1888) 23 L.J.N.C. 63]. (b) Contentious business Section 17 of the Attorneys and Solicitors Act, 187G, provides that on every taxation of costs or disburse- ments the taxing officer may allow interest at such rate and from such time as he thinks just on monies dis- bursed by the solicitor for his client and monies of the client in the hands of the solicitor and improperly retained by him. This does not apparently apply as between party and party. (c) By agreement An agreement by the client to pay interest on costs if valid in other respects would appear to be binding on the client provided the solicitor explains to the client that apart from agreement interest is not payable on taxed profit costs in contentious matters unless the court in its discretion so orders. (2) After Judgment The usual interest at 4 per cent or the current rate chargeable on judgment debts is payable from the date of the judgment. (3) Common Law A solicitor may take security from his client for costs due but not for future costs nor for costs over and

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