SOLICITOR'S BILL OF COSTS STRUCK OUT BECAUSE CLAIM WAS EXAGGERATED AND (IN PART) FALSE

November 11, 2014 · by · in Applications, Civil Procedure, Costs, Striking out

In Alpha Rocks Solicitors -v- Alade [2014] EWHC 3606 (Ch) Kevin Prosser Q.C., sitting as a judge of the High Court, struck out part of the solicitor’s bill as an abuse of process. The case makes instructive reading.  It involved a claim brought by the  solicitors for their own costs against the defendant who was their former client.

NB. Note that this decision was subsequently overturned by the Court of Appeal see the Court of Appeal decision here.

THE CASE

The claimant solicitors had issued proceedings for £171,708.85 arising out of several pieces of litigation conducted on behalf of the defendant. The claimant applied summary judgment and the court made an order for an interim payment of £131.514.56. The defendant did not pay that sum. There were issues with the bills of costs.

  • Some were unsigned.
  • There was no proof of delivery.

A Master ordered that the claimant serve statutory bills with a view to detailed assessment.  The claimant applied to set aside that order on the grounds that statutory bills had already been served.

THE DEFENDANT’S ARGUMENTS

The defendant argued that:

  • Statutory bills had not been served when proceedings were issued.
  • The action should be struck out as an abuse of process on the grounds that the invoices were of recent creation; the bills of costs were deliberately exaggerated and the bill falsely stated that leading counsel had been paid in full when he had not been so paid.

THE JUDGE’S FINDINGS: SOME OF THE DOCUMENTS WERE UNTRUE

The judge described some of the claimant’s solicitors as “odd”. A six page bill of costs supposedly sent with a letter dated 16th 2012 January referred, explicitly, to post 16th January events. Consequently it was clear that the work had not been concluded by the 16th January  and the claimant was not in a position to issue an invoice.

The judge found that it was an inevitable conclusion that the letter and bill of costs, and the witness statement served by the claimant asserting that these documents had been served on the defendant, were untrue.

DELIBERATE EXAGGERATION OF FEES

The judge found that the fees were exaggerated.

  • He rejected arguments that the claimant had prepared trial bundles for the litigation. He regarded an argument that “parallel bundles” had been prepared as “wholly unconvincing”.
  • He regarded some of the evidence put forward by the claimant as untrue.
  • There was a claim for 115 hours spent on trial bundles. The judge found that this claim was false.
  • “I cannot avoid the conclusion that the exaggeration is deliberate”.

A second bill of costs was also inaccurate.

  • The claimant’s own evidence showed the bill of costs to be wholly inaccurate.
  • Further when the bill of costs was drawn up it was drawn up by someone who knew it was inaccurate.
  • By way of example the claimant had been put in funds to pay leading counsel’s fees. The bill claimed those fees had been paid. In fact the had only been paid in part.

STRIKING OUT FOR ABUSE OF PROCESS

The judge struck out two of the claimant’s bills. One on the grounds that it was exaggerated; the other on the grounds that it was drawn up relying upon fabricated documents and in the knowledge that it was inaccurate.

He found he had power to strike out the bills.

  • Both involved a serious misuse of the court’s procedure.
  • They rendered future proceedings thoroughly unsatisfactory.
  • A fair trial of the claims would be impossible.
  • It would be unfair on the defendant to subject him to a detailed assessment of the claims

Certain other claims, which were the subject of different issues in relation to the defendant’s liability,were not struck out.

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