CIVIL CASE OF THE YEAR? AN OPEN LETTER TO ALL THOSE WHO ASSERT THAT "LITIGATION IS VERY MUCH AN OPTIONAL ACTIVITY"
There are many candidates for civil case of the year. I have chosen one that has not made new law or set out any major principles. However it is a case that is symptomatic of the major mistakes made when court fees were vastly increased. It belies, totally, the assertion made in the House of Lords’ debate that “litigation is very much an optional activity”.
INTERCITY TELECOM -v- SOLANKI
In Intercom Telecom Limited -v- Solanki  EWHC B3(Mercantile) the claimant brought an action because the defendant’s activities threatened its very survival.
The defendant was an ex-employee of the claimants. Upon leaving he had taken (illegally) details of the claimants’ clients and clients were being lost.
THE EVIDENCE: FORENSIC EXAMINATION LOOKING BEYOND THE OBVIOUS
Judge Simon Brown QC observed:
“The defendant disclosed a memory stick which was said to contain only Bollywood music. On initial examination this was correct. However close forensic examination was necessary.
t. Upon initial inspection, Mr Solanki’s claim appeared to be correct – the USB stick did contain just Bollywood music files. However, further review demonstrated that the date of creation of these files was 11 September 2014 at a time between 12:57pm and 12:59pm. Significantly, this post-dated the date upon which the Defendant learnt that the Claimants had discovered the existence of the additional memory sticks, i.e. 4 September 2014 when they made their application and before a court hearing.
u. The Claimants sent the memory stick to Mr Birch, a forensic analyst, for review. He discovered that the SanDisk memory stick had contained various emails that had been extracted by the Defendant during his work for the Claimants. Moreover, the memory stick was shown to have previously contained a spreadsheet with details of thousands of the Claimants’ customers; that file was created on 26 January 2014 and modified on 13 March 2014. Of utmost concern to the Claimants, the database had entries highlighted as “completed”and these included a number of accounts which the Claimants had mystifyingly lost. It was therefore clear that Mr Solanki had been wrong when he said in his Third Affidavit that the SanDisk Memory Stick was the device he had used to store music. Moreover, it was apparent that Mr Solanki had been untruthful to the Court when he said that the memory stick contained mere music files. The Third Affidavit also stated that “no documents in [Mr Solanki’s] possession after 14 May 2014 and covered by paragraph 3 of [the Undertaking] have been destroyed, removed, disposed of and/or edited.” This was wrong too because the list of files and directories that had been stored on the SanDisk Memory Stick included files that were not on the memory stick at the time that they were delivered-up to the Claimants. Such deleted files and directories included: (i) a document relating to HCL (one of the Claimants’ most biggest customers) which was last accessed in September 2014 and which was in existence prior to May 2014; and (ii) a directory entitled ‘Phonestall’ (last accessed on 1 June 2014) – contrary to Mr Solanki’s defence claims that he didn’t have “any form of business contact with ASB Utilities Limited, Salts Healthcare Limited and Phonestall.com Limited, and others” .
In my judgment, there has been deliberate and calculated spoliation and manipulation of critical evidence in this case by the Defendant both before and during the time it has been before the court. The electronic evidence that has been recovered by the Claimant is of a damning nature to the Defendant’s case, as the Defendant well knew and is wholly supportive of the Claimants case. His sworn statements in his Defence and affidavits have been demonstrated to be untrue. I draw adverse inferences against the Defendant in terms of his credibility and of his case and in instances where documents are missing. I find him to be untruthful, unreliable and evasive. The documents speak for themselves as a contemporaneous log of the Defendant’s illegal activities.
SO DID THE CLAIMANTS HAVE A CHOICE?
This case belies the assertion that litigation is “not compulsory”.
- The claimants could have done nothing and had their business stolen.
- The claimants would have lost legitimate work for illegitimate reasons.
- The claimants could have gone out of business.
It is worth noting that the claimants had done everything they could to avoid litigation
“Moreover, The Claimants offered a ‘Without Prejudice save as to Costs’ offer on 19th May 2014 at the outset of these proceedings to settle the case on an undertakings basis only; this was spurned”
The claimants’ “choice” appears to have been to litigate or do nothing and have their business stolen. Innocent people would have lost their jobs as the result of unlawful conduct.
THE IMPACT OF COURT FEES
It is worth noting that the total costs of that case (a pre-court fee rise) case amounted to £68,959.25. Additional court fees would have have led to a substantial increase.
WELL THE ERRANT DEFENDANT WILL PAY THEM!
In many cases such as this the Defendant won’t pay because they have no assets. The money judgment is (to all and intents and purposes) worthless. The important thing is to protect the client database. Increased court fees is, in essence, a form of taxation on legitimate businesses pursuing legitimate cases.
THE HOUSE OF LORDS DEBATE ON COURT FEES: VERY MUCH WORTH A READ
For instance Lord Markes of Henley-on-Thames
“Small and medium-sized companies will be deterred from bringing claims to recover sums due to them because they are unable to afford the substantial upfront fees, often when that inability is brought about by the very debtors that they would wish to pursue. Individuals will be unable to afford to bring claims that they would have otherwise brought, particularly in personal injury cases. A further problem that has been mentioned and which I should have thought was obvious is that the proposals that involve charging the maximum fee to any claimant who cannot specify the value of his claim are completely unfair to personal injury claimants, who often cannot specify the value of their claim when they bring it. Moreover, any decrease in claims numbers will make it far more difficult for small solicitors firms in particular to survive in the current difficult, largely post-legal aid climate, in which they are already struggling.”
“The Government have suggested that court fees will be a small fraction of the legal expenses which a claimant will incur, but many claimants will not have to pay their legal expenses at the outset of proceedings. They will not have such a substantial sum of money available at the outset of the case, or they may be able to pay these court fees only by doing without competent legal representation. The deterrent effect on litigation will, I think, make it most unlikely that the increased charges will produce the anticipated £120 million which the Government hope to produce by this order.”
The order will have further damaging consequences. Unscrupulous debtors will be far less likely to pay up if they suspect that their creditor cannot afford the court fees.
“The Minister mentioned the consultation and the strong views in response. On 19 December 2014, the Lord Chief Justice of England and Wales, the noble and learned Lord, Lord Thomas, responded to the consultation on behalf of the senior judiciary—that is,himself; the Master of the Rolls, Lord Dyson; the President of the Queen’s Bench Division; the President of the Family Division; the Chancellor of the High Court; and the deputy head of civil justice. They all know a thing or two about access to justice and litigation. They explained their “deep concerns” about this dramatic increase in court fees. I cannot recall seeing a letter from the senior judiciary expressed in such scathing terms in response to a consultation about a proposed government policy. The noble and learned Lord, Lord Thomas, said that the Government’s impact assessment for these proposals,
“makes some very sweeping and, in our view, unduly complacent assumptions about the likely effect on the volume of court claims issued and access to justice of the proposed fee increases”.
“the research evidence base for these proposals is far too insubstantial for reforms and increases of this level”.
“there are fears that the increase in fees could trigger commercial work moving elsewhere”.”
IT IS A PROBLEM ACROSS THE BOARD
I have chosen a commercial case because it is the best example of the increase causing (irreparable) damages to the economy of the country. I have heard of numerous cases where small businesses are deterred from pursing claims (proper and legitimate claims) because of the amount of the court fees.
The fees will be virtually irrelevant to the consideration of large multi-national companines. However they are significant sums to most businesses and virtually every individual.
I have heard of solicitors delaying serious personal injury claims and fatal claims because of the expense involved in issuing.
The increase in court fees is a prime example of poorly researched decisions made in circumstances where the litigation process is simply not understood by those implementing them.
The prime motivation was said to be the public purse and the needs of the economy. The reality is that the infrastructure of the economy is harmed if legitimate businesses cannot pursue legitimate claims.
That holds true, of course, across the board for all types of litigation. Civil society depends on litigation. If individuals cannot settle their disputes amicably then the courts, where matters are heard fairly and independently, are essential. A business cannot mediate with a crook who is stealing their business. People would lose their jobs and the fraudsters thrive.
Meanwhile the Ministry of Justice espoused view is that for those businesses litigation is an optional activity.
The best response, comes, again from Lord Pannick
“The Minister described litigation—I wrote this down, because it was a very striking phrase—as an “optional activity”, like a skiing holiday or a visit to a three-starred Michelin restaurant. As the Minister well knows from his experience as a very successful barrister, for many people—those suing for debts or to recover compensation for personal injury—litigation is often a necessity to keep your business alive or to maintain any quality of life. The Minister is absolutely right that there are already many impediments to access to justice. That is surely no justification—no excuse—for the state to erect further high barriers.”