WHEN THE FEE EARNER WITH CONDUCT OF A MATTER IS ALSO THE SOLE DIRECTOR OF THE CLIENT: UPPER TRIBUNAL AWARDS NO COSTS FOR THIS ASPECT OF THE CASE

There is a comment on costs in the judgment of  Judge Timothy Herrington in Financial Solutions (Euro) Limited -v- The Financial Conduct Authority [2020] UKUT 0243 (TCC) that has some wider implications, albeit that it is was a relatively unusual situation.

 

 

THE CASE

The judge was awarding costs against The Financial Conduct Authority on the grounds of its unreasonable decision making.   The judge was then assessing costs.  He was dealing with the unusual situation whereby the fee earner dealing with the matter at the solicitor’s firm was also the sole director of the applicant firm.

THE JUDGMENT: NO COSTS WHERE THE LAWYER IS ALSO THE CLIENT IN THESE CIRCUMSTANCES

“As far as the claim for Mr Markou’s time is concerned, as well as being director of FSE and its sole witness in the Tribunal proceedings, he is also an employee of the law firm engaged by FSE and his time costs are sought in the same fashion that the costs incurred by any litigant engaging the services of a firm would pay for a fee  earner’s time.
62. I question the appropriateness of a firm of solicitors allocating as a fee earner in respect of Tribunal proceedings a person who is also the principal witness in the proceedings. In my view that creates scope for significant conflicts of interest and the ability to draw the line between those costs that are properly characterised as fees  charged by the legal firm and costs which are not properly characterised because they
relate to the time spent by Mr Markou in his capacity as the person giving instructions to the legal firm and its Counsel on the matter. I therefore disallow the costs claimed.”