The purpose of the Cash Account exercise, at the conclusion of a Solicitors Act assessment, is to determine who owes what, and to whom. A Cash Account must therefore arrive at a "balance", either positive (in favour of the client) or negative (in favour of the solicitor).
Otherwise it is just a useless jumble of numbers.
The "Cash Account" exercise is the final stage (apart from the award of costs) in any assessment under the Solicitors Act 1974, but it is an exercise that is widely misunderstood, particularly in the context of personal injury / clinical negligence litigation.
The guidance in the rules and practice directions is somewhat vague, and the specimen shown within "Precedent P" is not particularly helpful in that it contains no real detail and, arguably, is plain wrong.
The first point is to consider the purpose of the Cash Account. It is not just an esoteric jumble of figures.
The purpose of the Cash Account is so that, once the Court has completed the assessment of the statute bill, it can determine who owes what to whom.
This is a requirement under s.70(7) of the Act which says -
s.70 (7) : Every order for the assessment of a bill shall require the costs officer to assess not only the bill but also the costs of the assessment and to certify what is due to or by the solicitor in respect of the bill and in respect of the costs of the assessment
How the court goes about that exercise is explained in a little more detail at paragraph 6.19 of the Practice Direction to CPR Part 46, which says -
6.19 After the detailed assessment hearing is concluded the court will –
(a) complete the court copy of the bill so as to show the amount allowed;
(b) determine the result of the cash account;
(c) award the costs of the detailed assessment hearing in accordance with Section 70(8) of the Solicitors Act 1974; and
(d) issue a final costs certificate.
So, the "result" of the Cash Account is the difference between the credit and debit sides of the cash account. In effect what has already been received from or on behalf of the client, less what has already been paid out on his or her behalf (or what should have been paid out - the Court has the power to strike out items from the Cash Account that should not be there, either because they should be in the statute bill, or because they were otherwise not lawful cash account entries) and then, finally, less the amount of the bill that has been assessed. All that then needs to be done is to add in the costs of the assessment, depending upon which way they have been awarded.
But that leaves the tricky question of identifying which items are debits, which are credits, and which have no place in the Cash Account at all. This seems to be seen as something of a dark art. Many solicitors, and even many specialist barristers and costs professionals, seem to struggle with it.
What Should Appear in the Cash Account, and Where Should it Go?
| Debit Column | Credit Column | Exclude Altogether |
| Damages paid out to the client | Damages received from a third party | General disbursements (these should be in the statute bill, so including them as a debit results in the client paying them twice) |
| Payments made on the client's behalf to a medical treatment provider | Costs received from a third party | Receipt from the client of any "client deduction" (part of the statute bill) |
| Any adverse costs paid out on behalf of the client | Any payment on account of costs or disbursements received from the client or a funder | Payment of Counsel's fees from funds provided by the client (see disbursements) |
| Any other payments made as agent for the client, other than in respect of disbursements (which will be included in the statute bill) | Any other money received from the client, a funder, or a third party, (with a suitable description) | Payment of Counsel's fees from office account (see disbursements) |
| The bill (subject to any adjustment on assessment) | Payment of Expert's fees (see disbursements) | |
| The ATE premium (unless it can properly be categorised as a disbursement) | | Payment of Court fees (see disbursements) |
| | | Any transfer from the solicitor's client account to office account |
| | | |
The debit and credit columns should then be totalled and the difference between the two (credits minus debits) shows what is owed and to whom. At the end of a case, and subject to any assessment under the Solicitors Act, the Cash Account should show a zero balance.
If it shows a positive balance it means that an amount is owed from the solicitor to the client.
If it shows a negative balance it means that an amount is owed from the client to the solicitor.
A sample Cash Account (in the context of a personal injury case) is available to download below.
The file is a word document containing an embedded Excel spread sheet. Right click on the "table" area and either open or edit worksheet object to adjust the contents, or add or delete rows.