Safra v WilmerHale: US $35 Million Retainer Was Not a Contentious Business Agreement [2026] EWHC 703 (SCCO)
Solicitor & Client — 2026-03-24
Costs Judge Leonard finds WilmerHale engagement letter was not a CBA due to open-ended rate review provisions, and invoices were not statutory bills. Full s.70 assessment ordered of US $35.3 million.
Overview
Date: 24 March 2026
Judge: Costs Judge Leonard
Court: Senior Courts Costs Office, Thomas More Building, Royal Courts of Justice
Citation: [2026] EWHC 703 (SCCO)
Case No: SC-2024-APP-001104
Hearing dates: 20, 21 and 22 October 2025
Nature of Proceedings: Application for assessment of solicitor and client costs under section 70 of the Solicitors Act 1974, with preliminary issues as to the nature of the retainer, the status of the invoices, and the client's entitlement to assessment
Key Issues:
- Whether the engagement letter constituted a contentious business agreement (CBA) within the meaning of section 59 of the Solicitors Act 1974
- If so, whether it was fair and reasonable under section 61
- Whether the engagement letter entitled the firm to deliver interim statutory bills
- Whether the invoices actually delivered amounted to interim statutory bills
- The date of delivery of a statutory bill for section 70 purposes
- Allocation of the client's payments to individual invoices
- Whether special circumstances justified assessment under section 70(3)
- Whether the order for assessment should be subject to conditions
---
The Facts
In Safra v Wilmer Cutler Pickering Hale and Dorr LLP, Costs Judge Leonard considered an application by Alberto Joseph Safra for the detailed assessment of invoices totalling US $35,343,213.96 rendered by international law firm WilmerHale over a retainer lasting approximately 22 months. The invoices comprised US $34,166,516.50 in legal fees and US $1,176,697.46 in disbursements. The unpaid balance claimed by WilmerHale was US $18,923,316.10. This is believed to be among the largest solicitor and client assessment applications ever brought in the SCCO.
Mr Safra is the son of the late Joseph Safra, described as the wealthiest person in Brazil and one of the wealthiest people in the world. Following his father's death in December 2020, what international media described as a "bitter multibillion-dollar estate feud" arose between family members over an estate valued at US $23 billion. WilmerHale was retained in September 2022 as lead counsel in five LCIA arbitrations and related proceedings in Brazil, the Bahamas, the United States, Switzerland, and Gibraltar. The disputes were settled in July 2024.
The engagement letter dated 2 September 2022 was negotiated on Mr Safra's behalf by Eduardo Munhoz of Munhoz Advogados, a prominent Brazilian law firm, and by Eduardo Sosa Filho, a senior executive at ASA, a financial institution founded by Mr Safra. The letter provided for hourly rate charging, with named partner rates of US $1,830 (Gary Born) and US $1,625 (John Trenor), and contained a provision for WilmerHale to review and revise billing rates periodically, notifying the client of any changes. Monthly statements were to be sent "ordinarily" for work performed and expenses recorded during the previous month.
A bitter dispute over fees developed early in the retainer. In December 2022, after the first three invoices had been delivered totalling some US $4.4 million, Mr Munhoz wrote to WilmerHale stating that Mr Safra could not afford fees at that level, asking whether a monthly average of US $400,000 was achievable. Mr Born replied: "We'll find a way to make that or something else he wants work." No cap was ever formally agreed. Over the following months, proposals for alternative fee arrangements, including annual caps with success fee elements, were discussed but never concluded. The client paid sporadically, initially at US $400,000 per month and later at US $600,000, while the firm's monthly charges frequently ran into the millions. WilmerHale's billing averaged approximately US $1,500,000 per month, nearly four times what the client had indicated he could afford.
---
1. The Engagement Letter Was Not a Contentious Business Agreement
The first and most significant issue was whether WilmerHale's engagement letter constituted a CBA under section 59 of the Solicitors Act 1974.
WilmerHale argued that the engagement letter met the statutory criteria because it was a written agreement providing for remuneration by reference to an hourly rate for contentious business. The firm relied on Hollins v Russell [2003] EWCA Civ 718, Acupay System LLC v Stephenson Harwood LLP [2021] EWHC B11 (Costs), and Addleshaw Goddard LLP v Wood [2015] EWHC B12 (Costs) for the proposition that hourly rate ranges and provisions for rate increases were not inconsistent with CBA status.
Mr Safra argued that the engagement letter lacked the certainty required of a CBA, relying principally on Wilson v The Specter Partnership [2007] EWHC (Ch), where Mann J held that the "essence of a CBA is certainty" and found an agreement with a provision for possible rate increases to be insufficiently certain.
Costs Judge Leonard found that the engagement letter was not a CBA. The decisive factor was the open-ended nature of the hourly rate review provisions (at paragraph 110):
> "The purpose of a CBA is to fix the fees, or provide a fixing mechanism, so that the parties (and in particular the client) know where they stand. Under the terms of this document there is still an element of uncertainty."
The Judge distinguished the engagement letter from the retainer in Acupay, where the provision was for a fixed annual increase of 3%, and noted that WilmerHale's right to increase hourly rates was "entirely at the discretion of the Defendant" as to both timing and amount. The consultation and complaints provisions in the engagement letter did not alter that position: the firm's right to increase rates was "not contingent upon such notification, much less agreement by the Claimant" (paragraph 114).
A further factor was the engagement letter's express reference to the client's right "to object to our bill, and to apply for an assessment of it under Part III of the Solicitors Act 1974." Costs Judge Leonard held this was inconsistent with CBA status, because on WilmerHale's interpretation it would have been "downright misleading" as the right to assessment under a CBA is far more limited (paragraph 106).
The Judge also addressed a broader argument raised by Mr Safra: that if compliance with section 59 alone were sufficient to render all written contentious retainers CBAs, then practically all retainers for contentious business would be CBAs. Costs Judge Leonard observed that "the question before me is only whether, in this particular case, the Defendant is right in saying that the Engagement Letter is a CBA" (paragraph 102), adopting the approach from Holcroft v Thorneycroft Solicitors Ltd that each agreement must be determined on established contractual principles.
---
2. If a CBA, It Would Have Been Set Aside as Unreasonable
Although he found the engagement letter was not a CBA, Costs Judge Leonard addressed, in the alternative, whether it would have been fair and reasonable under section 61.
Applying the test from Re Stuart ex p Cathcart [1893] 2 QB 201 (as applied in Bolt Burdon Solicitors v Tariq [2016] EWHC 811 (QB)), the Judge found the agreement was not unfair. The terms were negotiated at arm's length between the firm and an experienced businessman represented by multi-jurisdictional legal advisers. Neither Mr Born nor Mr Trenor (both registered foreign lawyers) could be expected to have appreciated the distinction between a CBA and a non-CBA retainer, and there was no fiduciary duty on WilmerHale at the negotiation stage, following Belsner v Cam Legal Services Ltd [2022] EWCA Civ 1387.
The agreement was, however, unreasonable. The Judge would have set it aside because it provided for hourly rates to be increased "at times and by amounts dictated entirely by the Defendant, whilst simultaneously removing the Claimant's rights, under section 70, to challenge those hourly rates" (paragraph 122). The bills would then have been assessed in their entirety.
---
3. The Engagement Letter Did Entitle WilmerHale to Deliver Interim Statutory Bills
Costs Judge Leonard found that, properly construed, the engagement letter's provisions for "monthly statements" for work performed and expenses recorded during the previous month, payable upon receipt with interest for late payment, were consistent with those monthly statements being interim statutory bills (paragraph 133).
The Judge rejected the argument that the use of the word "ordinarily" created ambiguity. The reference to "our bill" (singular) elsewhere in the engagement letter was "just loose phrasing" that could not bear the weight of meaning imposed upon it by Mr Safra. The Judge also found that the obligation to raise queries in a "timely fashion", combined with the payment terms, indicated a regime of complete, final, and payable bills for each monthly period.
This is a notable finding. The Court of Appeal in Ivanishvili v Signature Litigation LLP [2024] 1 WLR 4636 had emphasised the potentially adverse consequences of interim statutory billing for clients, and the authorities established that interim bills must be "complete self-contained bills of costs to date" (Spencer J in Bari v Rosen [2012] 5 Costs LR 851). The Judge here determined the contractual right to deliver such bills existed, but then turned to whether the bills actually delivered met the required standard.
---
4. The Invoices Were Not Statutory Bills: The "Posted to Date" Caveat
This was the second critical finding. Each of WilmerHale's invoices, whether draft or finalised, contained the wording: "Includes only Services and disbursements posted to date."
Costs Judge Leonard found this caveat was fatal to the invoices' status as statutory bills. Its "clear meaning" was that some work performed during the period covered by each invoice "might not have been 'posted', in other words recorded upon the Defendant's systems, at the time of delivery and accordingly might have to be included in a subsequent invoice" (paragraph 143). In other words, none of the invoices were stated to be final for the period they covered.
The Judge rejected WilmerHale's interpretation that the phrase merely indicated further charges would follow for subsequent months:
> "There is no reason why an invoice covering work undertaken during a specified period should incorporate a redundant warning to the effect that the solicitor will charge for further work undertaken during a subsequent period."
This conclusion was reinforced by the evidence that legal fees for a given month changed materially between draft and final versions. For March 2023, for example, the fees changed three times: US $967,337 in the May 2023 draft, US $1,011,675 in the September 2023 draft, and US $1,017,435 in the final invoice delivered in September 2024.
The Judge also preferred Mr Coltro's evidence over Mr Trenor's on the question of why draft invoices were rendered, finding that the drafts were sent in response to the client's requests for costs information rather than (as WilmerHale argued) to resolve disagreements before finalisation.
---
5. The Invoices Constituted a Single Chamberlain Bill Delivered on 17 September 2024
Given the finding that the individual invoices were not statutory bills, Costs Judge Leonard applied the Chamberlain v Boodle & King principle: a series of non-statutory bills which together become a statute bill upon delivery of the last bill. Both parties accepted that if the invoices were not individually statutory bills, they collectively comprised a Chamberlain bill delivered on 17 September 2024, when WilmerHale delivered the full run of finalised invoices.
The consequence was transformative for Mr Safra's position. The Chamberlain bill was part-paid and had been delivered only three months before the application for assessment on 17 December 2024. The court therefore had jurisdiction to order assessment under section 70(2) without the need to establish special circumstances under section 70(3), and without any invoices being excluded under section 70(4).
---
6. Allocation of Payments: Oldest Invoice First
The parties disputed how the client's payments of US $400,000 and US $600,000 per month should be allocated. Mr Safra argued they were referable to individual monthly invoices. WilmerHale argued they fell to be applied against the oldest outstanding debt first, in accordance with Clayton's Case (Devaynes v Noble) (1816) 1 Mer 529 and the general rule in Simson v Ingham (1823) 2 B&C 70.
Although the point was academic given his finding that a single Chamberlain bill had been delivered, Costs Judge Leonard preferred WilmerHale's analysis. Under Simson v Ingham, it was incumbent upon the client, if he wished particular payments allocated to particular invoices, to say so at the time of payment. The Judge could not accept Mr Coltro's oral evidence that such instructions were given, noting it did not appear in his written evidence and was intertwined with his "inherently incredible" insistence that WilmerHale had twice agreed to cap its fees. Mr Trenor had expressly notified the client in October 2023 that payments were being applied to the oldest outstanding invoices, and no objection was recorded.
---
7. Special Circumstances Would Have Been Established
Although special circumstances were not required, Costs Judge Leonard addressed the question in the alternative, finding that they would have existed.
The Judge was not persuaded by the billing examples cited by Mr Safra. Mr Trenor's long hours were "explained by Mr Trenor's clear evidence about the amount of work that the Claimant wanted the Defendant to do for him" and were "commensurate with the scale of work the Defendant was required to undertake" (paragraph 195). The hourly rates were individually negotiated and comparable to other firms instructed by Mr Safra. The travel expenses and disbursements were broadly in line with the engagement letter.
The Judge's "real concern" was with the adequacy of costs information provided to the client. He held that WilmerHale had failed in its duty under paragraph 8.7 of the SRA Code of Conduct, which requires solicitors to ensure clients receive the best possible information about how their matter will be priced and the likely overall cost. This is a positive duty to volunteer information, not merely to provide it on request.
The costs information was sporadic: for February to April 2023 (bills totalling US $3.1 million), no information was given until May 2023. For May to July 2023 (bills totalling US $5.7 million), no information until September 2023. For December 2023 to July 2024 (bills totalling US $14.2 million), no detailed costs information was given until after the retainer ended.
The Judge also gave weight to Mr Born's assurance in December 2022 that the firm would find a way to make a US $400,000 monthly average work, comparing it to a costs estimate for the purposes of the reasonableness analysis from Mastercigars Direct Ltd v Withers LLP [2009] 1 WLR 881.
---
8. No Conditions Attached to the Assessment Order
WilmerHale sought an order requiring Mr Safra to pay the full balance of any excluded invoices and 80% of the amounts subject to assessment, on the basis that the client was based outside the jurisdiction and the firm faced a risk of irrecoverable costs.
Costs Judge Leonard declined. The client had already paid over US $16.4 million (almost 50% of the total invoiced). The application was made within three months of delivery of the Chamberlain bill. The Judge found that "the current unfortunate situation is at least as much the responsibility of the Defendant as the Claimant" and made an unconditional order for assessment.
---
Practical Implications
For Costs Lawyers
1. Open-ended rate review clauses prevent CBA status. Retainers that reserve to the solicitor an unqualified right to increase hourly rates by any amount at any time cannot be CBAs, regardless of how the agreement is labelled. The key is whether there is a "fixing mechanism" providing certainty. Fixed annual increases (as in Acupay, at 3% per annum) may be compatible with CBA status; unconstrained discretion is not.
2. The "posted to date" caveat is a statutory bill killer. Any standard wording on invoices that reserves the right to add further charges for work within the period covered will undermine finality. Solicitors who intend their interim invoices to be statutory bills must ensure each invoice is stated to be complete and final for the relevant period, with no caveats.
3. Chamberlain bill analysis can transform the client's position. Where individual invoices fail as statutory bills, the entire series may be treated as a single Chamberlain bill delivered on the date of the last invoice. This can bring the entire claim within section 70(2) and avoid the restrictive time limits in sections 70(3) and 70(4).
4. Payment allocation matters and clients must direct it. Under Simson v Ingham, the right to direct the allocation of payments lies first with the payer. If no direction is given, the creditor can apply payments to the oldest outstanding debt. Clients who wish to preserve arguments on section 70(3) and 70(4) should give clear written instructions at the time of each payment as to which invoice it relates to.
5. Informal costs assurances carry weight on assessment. Even where no binding estimate or fee cap is agreed, a solicitor's assurance that costs can be managed at a particular level may be treated similarly to an estimate for the purposes of assessing reasonableness, following Mastercigars Direct Ltd v Withers LLP.
For Litigation Practitioners
1. Engagement letters must be drafted with CBA implications in mind. Firms that wish their retainers to qualify as CBAs should ensure rate review provisions contain a "fixing mechanism" with defined parameters. Firms that do not wish their retainers to be CBAs (perhaps to preserve a simpler enforcement route) should consider expressly stating as much, as in Acupay.
2. SRA Code paragraph 8.7 imposes a proactive obligation. The duty to provide the best possible information about likely overall cost is ongoing and cannot be discharged merely by offering to provide information or waiting for it to be requested. Failure to comply may constitute special circumstances justifying assessment even of paid bills.
3. High-value international retainers are not immune from scrutiny. The sophistication of the client, the negotiated nature of the hourly rates, and the enormous value and complexity of the underlying litigation did not insulate the firm's charges from assessment. The Defendant's argument that scale and complexity made the fees "more, not less, explicable" was acknowledged but did not prevent the making of an assessment order.
4. Draft invoicing practices need careful thought. Rendering draft invoices before final versions may undermine a firm's argument that the final versions were treated as definitive. Here, the practice of sending drafts in batches, months late and only on request, supported the conclusion that the final invoices were no more than the "monthly statements" contemplated by the engagement letter.
---
Conclusion
Safra v WilmerHale is a landmark decision in solicitor and client costs law, addressing with considerable thoroughness the interplay between contentious business agreements, interim statutory billing, and the client's right to assessment under section 70 of the Solicitors Act 1974. The sums at stake are extraordinary: over US $35 million in fees for less than two years of work, with an unpaid balance of nearly US $19 million.
The practical significance of the judgment lies in three areas. First, it provides clear guidance on the degree of certainty required for a retainer to qualify as a CBA, establishing that unilateral, open-ended rate review provisions are incompatible with CBA status regardless of the sophistication of the parties or the negotiated nature of the initial rates. Second, it demonstrates that standard invoice caveats reserving the right to render further charges for the same period are fatal to statutory bill status, with the consequence that the entire billing history may be treated as a single Chamberlain bill delivered on the date of the last invoice. Third, it reinforces the proactive nature of a solicitor's duty under SRA Code paragraph 8.7 to keep clients informed of accruing costs, particularly where those costs are escalating far beyond any previously indicated level.
The case now proceeds to a detailed assessment of US $35.3 million in fees and disbursements. That assessment will grapple with the reasonableness of the hours claimed, the impact of Mr Born's December 2022 assurance, and the adequacy of costs information, all against the backdrop of one of the most high-profile international arbitration mandates in recent memory. The assessment itself is likely to generate further significant authority.
---
Citation: Safra v Wilmer Cutler Pickering Hale and Dorr LLP [2026] EWHC 703 (SCCO)
Full judgment available at: BAILII
Analysis by William Mackenzie, Costs Lawyer, Mackenzie Costs
Related Specialist Support
Related Cases
View all case law updates | Our services | Contact us