In MRH Solicitors -v- The County Court sitting at Manchester [2015] EWHC 1795 (Admin) the Administrative Court, in essence, overturned findings of fraud against solicitors who had not been notified of the allegations and not given any opportunity to respond.

“In this case the Recorder made findings of dishonesty which he should not have made and which were not open to him”


A personal injury action was being defended on the basis that the claim was fraudulent. During the trial the claim for damages was reduced considerably because certain expenses had not been incurred, or were much lower than the sum claimed. A solicitor for the defendants gave evidence of other, similar cases, but made it clear that he was not alleging fraud on the part of the solicitors or various hire companies.


The Recorder dismissed the claim on the grounds that the accident was staged. However he went on to consider other matters:-

  1. The passages in the judgment to which MRH, Apex and Pennington take exception are these. He said at [6],
“In my view, MRH Solicitors are beyond incompetent in this; they are elbows deep in a fraudulent claim. Their intention is to profit their referring clients, Apex and Pennington, the credit hirers and storage companies, the only ones who are going to gain out of the storage and credit hire of these two fairly old (“F” registered) vehicles to this claimant.”
At the end of his judgment he added at [23],
“This claim is fraudulent. In my view it is run, primarily, for the advantage of the intermediaries and the car hire and storage company supported by an utterly unarguable schedule which denotes, in my view, more that incompetence but actual dishonesty on the part of MRH Solicitors.”
  1. They also object to what was said at [7] in connection with something found in Mr Yousaf’s witness statement suggesting that he was aware he was liable for the hire charges irrespective of whether they were recovered, but of which he said he was unaware when he gave his oral evidence,
“A sentence patently planted in his statement by MRH Solicitors to explain that it is meant to be a serious credit hire contract, but which, he, again, denied having knowledge about … Patently again this is planted in this man’s witness statement in the lawyers’ language …”
  1. We well understand how the Recorder’s suspicions were aroused. However, in the absence of good reason a Judge ought to be extremely cautious before making conclusive findings of fraud unless the person concerned has at least had the opportunity to give evidence to rebut the allegations. This is a matter of elementary fairness. In Vogon International Ltd v the Serious Fraud Office [2004] EWCA Civ 104 at [29] May LJ (with whom Lord Phillips MR and Jonathan Parker LJ agreed) said,
“It is, I regret to say, elementary common fairness that neither parties to the litigation, their counsel nor judges should make serious imputations or findings in any litigation when the person concerned against whom such imputations or findings are made have not been given a proper opportunity of dealing with the imputations and defending themselves.”
  1. This is not only required because of fairness to the party affected but also to avoid the Court falling into error – see for instance Co-operative Group (CWS) Ltd v International Computers [2003] EWCA Civ 1955 at [ 38]. As Megarry J memorably said in John v Rees [1970] CH 345, 402,
As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were answered; of inexplicable conduct , which was fully explained…Nor are those with any knowledge of human nature who pause to think for a moment likely to underestimate the feelings of resentment of those who find that a decision against them has been made without their being afforded any opportunity to influence the course of events”.
  1. This was not a case where it could be said that MRH had had an opportunity to give evidence to rebut the allegation of fraud or dishonesty, that they had failed to take it and some kind of adverse inference could therefore be drawn from their silence. Mr Knowles drew attention to the fact that there was no pleading that MRH had been dishonest or fraudulent. On the contrary in the passage which we have quoted from Ms Mason’s Defence, such an allegation was expressly disavowed. Mr Toft repeated that position when he gave evidence. In closing submissions, counsel for Ms Mason (who would, of course, have been professionally instructed by Mr Toft) again repeated her position: fraud by the solicitors, the car hire or storage companies was not alleged. We agree that this assists Mr Knowles’ case on fairness. If a case of fraud had been alleged against MRH, they would have had to consider whether they should continue to act for Mr Yousaf. They may also have wished to apply to be joined as a Defendant to the action so that they could defend themselves (although even in those circumstances, the precise effect of legal professional privilege might have to be considered). Since fraud by MRH had not been pleaded, their omission to take any of these steps was of no significance.
  2. Mr Knowles also drew attention to the principle of pleading, namely, that allegations of fraud or dishonesty must be made clearly and with proper particulars. He argued that, absent a pleading of dishonesty by MRH, the Recorder was simply disentitled to investigate the matter at all. So far as this was an argument independent of fairness, we have some doubts as to its merit. After all, the purpose of the rules of pleading is so that theparties know the issues on which they must adduce evidence. It is the parties to the litigation who may have a legitimate grievance if the Court travels beyond the pleadings in making its orders or in reaching its findings of fact. In this case that would be Mr Yousaf or Mr Ahmed, but neither of them has appealed against the decision of the Recorder, perhaps because they considered that, even setting aside what the Recorder had to say about MRH, his dismissal of their claims was unassailable.
  3. Mr Knowles accepted that the Recorder would have been entitled (if he thought the evidence called for it) to voice his suspicions or concerns as to the conduct of MRH, but noting that he had not heard anyone from MRH give evidence. Any judge would be concerned if evidence heard in a trial cast real doubt on the integrity of solicitors as officers of the court. This may or may not have led the defendants in the County Court to seek a wasted costs order against MRH. What Mr Knowles submitted he should not have done in fairness to MRH was to make positive and unqualified findings that the solicitors had been fraudulent and dishonest.
  4. We agree.”


The Administrative Court held that it was possible for the applicants to have applied to be joined as parties to the county court litigation in order that they could be heard and then, if necessary appeal.  For that reason the application for costs was dismissed. It set out a route for matters if such events should happen in the future.
  1. In the unlikely event that something similar to this should happen in the future, in our view the right course would be for the third party who believes they have been unfairly criticised in a judgment to apply to be joined as a party. We emphasise that we are not saying that a third party who is criticised will necessarily be entitled to be joined as a party. There are many cases heard in the civil courts (and also family and criminal courts) where the conduct of an absent person falls to be considered. For example, in a conspiracy case not all the alleged conspirators may be before the court as parties or witnesses. In complex commercial frauds it may well be part of the case that an absent person or institution was party to dishonest conduct somewhere in the chain. Everything will depend on the facts of the individual case. The facts of this case are unusual. The solicitors stigmatised as party to fraud were in court acting for one of the parties. Apex and Pennington were, as the Recorder robustly observed, the real substantial beneficiaries of the litigation. Apex had provided evidence in the form of a statement from a witness who in the event was unwell and did not attend court. His statement was read. In this case it was a procedural step which was open to consideration.
  2. So far as the Recorder thought that he had no power to change a transcript which accurately recorded what he had said in his ex tempore judgment we disagree. There may be a confusion here. The trial and judgment of this road traffic claim all took place in open court. The public were free to attend and such hearings are to be treated as public whether or not anyone was present other than those immediately involved with the case. Subject to immaterial statutory exceptions or contrary orders of the Court, what takes place in open court can be freely reported. In a sense, therefore, the Recorder was right that this genie could not be put back in the bottle.
  3. However, it is common practice for a Judge who gives an oral ex tempore judgment to refine it when asked to approve a transcript. Ordinarily, this is limited to tidying up the language, but in principle we see no reason why it may not include more significant changes. In Day v Harris [2014] Ch 211 CA, for instance a judge added a passage to the transcript which had not been included in his oral judgment. The Court of Appeal described this as “unfortunate” because the addition was made long after the trial and it added a finding of fact on a controversial issue. The Court did not suggest that the Judge was disempowered from changing his oral judgment and there would have been no comparable objection to an alteration in the present case. If, as in this case, the order of the Court consequent on the judgment has been sealed, the changes cannot usually alter that order. Otherwise, though, it is a matter for the Judge’s discretion as to what changes are appropriate.
  4. This is not to say that the Judge can behave arbitrarily. Like any discretion, it must be exercised judicially. However, if MRH, Apex and Pennington had become parties to the County Court action and if the Recorder had persisted in his refusal to change the judgment, they could, in principle at least, have appealed that decision.
  5. It is axiomatic that appeals are brought against orders, not the reasons for the orders or (in this sense) judgments – see e.g. Lake v Lake [1955] P 336 CA, but in the scenario which we are considering, MRH/Apex/Pennington would have had an order against which they could appeal, namely the Recorder’s refusal to vary the terms of the written transcript of the judgment. Once again, we emphasise that we are not saying that any third party who is unhappy about criticism of them in a judgment can expect to have the judgment changed either by going back to the Judge or by appealing. It will all depend on the circumstances and it is likely to be rare that the Judge’s discretionary refusal will be amenable to appeal. In principle though, if MRH/Apex/Pennington had become parties, had applied for the judgment to be altered and had been refused, they could have advanced the same objections by way of an appeal which they now make by judicial review.
  6. This course would have a further advantage. It would not be dependent on such a hypothetical future scenario taking place in the County Court. Although the destination of any appeal might be different, it is a procedure which could be followed if complaint was made about an ex temporeHigh Court judgment (unlike an application for judicial review which cannot be brought in relation to a High Court judgment). It would be wrong to assume that High Court Judges are immune from such errors as are alleged to have occurred here, see for instance Secretary of State for Trade and Industry v Rogers [1996] 1 WLR 1569 CA.
  7. We have considered whether this alternative remedy should mean that we decline in our discretion to entertain these applications for judicial review. We have decided that that would not be right. A finding of fraud (if that is what it was) is particularly serious. The error alleged by the present Claimants of unfair treatment is particularly egregious. MRH acted swiftly once they became aware of the parts of the oral judgment which had been critical of them. They tried, without success, to persuade the Recorder to change his judgment. While we have identified a potential procedural route by which they might have had access to an appellate court, we do not think it would be right to shut the judicial review door because the Claimants in these proceedings did not follow it.
  8. Accordingly, we accept that we have jurisdiction and we agree that we should not refuse to hear the claims because of a (theoretical) alternative remedy.


i) Ms Mason’s application against MRH was based (as Mr Toft’s witness statement in support made clear) on the Recorder’s findings that they had behaved fraudulently and dishonestly. We have made clear that the Recorder ought not to have made such findings in the conclusive terms that he did. Ms Mason will need to consider whether she wishes to pursue her application in the light of our judgment and, if so, how it should be amended.
ii) Ms Mason’s application against Apex and Pennington may also need to be reconsidered, although she may consider that the Recorder’s findings concerning the beneficiaries of the Claimant’s claim (which have not been challenged) put this aspect of her application in a different light.
iii) The Recorder will need to consider the request that he recuse himself and vary his order that the outstanding costs issues are reserved to him. Ordinarily, of course, the trial judge would deal with such outstanding matters (see for instance Okritie International Investment Management Ltd. v Urumov [2014] EWCA Civ 1315), but there may be exceptional circumstances where that is inappropriate. One of those is where a fair-minded and informed observer would regard the judge as having pre-determined the matter (the apparent bias test). That can be the case where the judge has already expressed views that are more than provisional but firm and conclusory – see Mengiste v Endowment Fund for the Rehabilitation of Tigray[2013] EWCA Civ 1003 at [58] and [59]. In this case the Recorder made findings of dishonesty which he should not have made and which were not open to him, for the reasons we have given. In our judgment the inevitable result is that the test for apparent bias is satisfied and it would be wrong for him to determine the outstanding costs applications.