Quotes, estimates and the curse of surprise invoices
When you instruct a solicitor for the first time, the solicitor’s professional obligations require the solicitor to provide you with an indication of what your legal fees are likely to be. This includes the costs of the work overall. As we have mentioned in another post (linked here), there are many factors that can affect the legal costs in a dispute.
It is, therefore, common practice within the industry for a solicitor to provide their client with an “estimate” of costs instead of a fixed fee or more concrete indication of fees. Regrettably, this can result in the client receiving an invoice for more than they expected. An estimate allows for a level of flexibility and, provided the amount charged falls within a reasonable range of the estimate, the client may still be required to pay. An estimate is different from a quote in that a quote is a fixed price and, if accepted by the client, regardless of whether the solicitor spent more time dealing with a particular matter then was anticipated, unless the parties agree to vary the quote, the solicitor cannot charge more than what they have quoted. Quotes or fixed fees are used frequently in transactional work such as conveyancing and the drafting of wills as the solicitor usually has a good idea about what the costs will be.
We use the term “surprise invoices” to refer to situations where a client has been provided with an estimate of the likely legal fees to complete a particular piece of work, advise on a particular issue or reach a certain stage in a dispute and then receives an invoice which far exceeds the estimate. It is undoubtedly the case that cost is a significant consideration in deciding whether to pursue legal action or instruct a solicitor. If a solicitor has to spend more time on a matter for whatever reason, it is good practice for the solicitor to forewarn the client that the original estimate may be exceeded and, if so, by how much. An explanation should also be provided. This will enable the client to make an informed decision as to whether there is going to be a cost benefit to the case.