COST BITES 238: WHEN A CLIENT DISPUTES THE SOLICITOR’S COSTS: THE JUDGE’S VIEW ON MEMORY, WITNESSES AND STATEMENTS DRAFTED “WITH THE GUIDING HAND OF THE CLAIMANTS’ SOLICITOR”

Today we are looking at part of a judgment about costs.  Ten claimants had been selected (out of 223) to give evidence challenging a solicitor’s deduction of success fees. In fact only four of the claimants attended court to give evidence.   The judgment sets out the difficulties with recollection coupled with the fact that the documents that the claimants complained about had probably never been read by the claimants, not even when they came to preparing their witness statements in this action.  There are also observations about the “guiding hand” of the claimants’ solicitors being present in the drafting of some parts of the statements.

(The problem of trying to remember what was said in phone calls a long time ago…)

“The entirely natural desire of the witnesses not to resile from the evidence set out in their witness statements and /or said in evidence was met with print literally in black-and-white which caused some linguistic contortions in the witness box as a result. For the reasons expressed by Leggatt J regarding the production of witness statements and the refreshing of memories, I take the view that the witnesses’ recollections have evolved rather than that they were seeking to argue something which they knew not to be true. Generally, the outcome of being faced with contradictory documentation led to an acceptance (albeit sometimes reluctantly) that the witnesses’ belief might not have been entirely correct.”

KEY PRACTICE POINT

Witness recollection is not always accurate.  Care must be taken when preparing a witness statement, particularly when there is clear documentary evidence that contradicts the evidence in the statement being given. 

THE CASE

David Richardson & Ors v Slater & Gordon UK Limited [2025] EWHC 1220 (SCCO) Senior Costs Judge Rowley.

THE FACTS

224 claimants brought proceedings against the defendant seeking the recovery of fees deducted from damages. Ten claimants had been selected as test cases. Only nine of those claimants in fact participated in the preliminary issues. Of those only four attended trial to give evidence.

THE JUDGE’S ASSESSMENT OF THE EVIDENCE OF THE CLAIMANTS

The evidence of the Claimants

10. I should say at the outset that I considered all the witnesses to be attempting to assist the court when giving their evidence. Nevertheless, the events with which they were concerned were a considerable number of years ago. Indeed, the accidents about which they originally consulted the defendant were between six and eight years before they produced any witness statements in these proceedings. None of the witnesses had made any notes of the conversations with the defendant during the progress of the original claims and as such were reliant upon their recollection of events.

THE CLAIMANTS’ WITNESS STATEMENTS

12. Each claimant provided two witness statements. The main statement for each claimant is broken down into the following headings:

i) accident circumstances

ii) my initial contact with the solicitors

iii) the contract signing process

iv) after the event insurance policy

v) correspondence throughout the claim

vi) conclusion

13. There are additional headings in some cases, for example in respect of physiotherapy treatment for Mr Moult, but the witness statements follow the same basic structure. The second witness statement for each claimant contains five standard paragraphs before responding to the relevant passages of the witness statement of Ms Ryan served on behalf of the defendant.

14. The oral evidence of the four claimants who were called followed a similar path. They gave evidence confidently at the outset regarding the process of speaking to representatives of the defendant. They all had an element of the claim which they said they had not been told about – the 25% deduction from damages (Webber); the ATE premium (Moult); the recovery of costs from the opponent (Rabinovitch); a medical fee said to be charged twice (Gwilliams) – but their evidence became less certain when they were taken to documents that they had received and which, on the face of them, contradicted the statement that they had made early in their evidence about being unaware of the deduction, ATE premium et cetera.

15. The entirely natural desire of the witnesses not to resile from the evidence set out in their witness statements and /or said in evidence was met with print literally in black-and-white which caused some linguistic contortions in the witness box as a result. For the reasons expressed by Leggatt J regarding the production of witness statements and the refreshing of memories, I take the view that the witnesses’ recollections have evolved rather than that they were seeking to argue something which they knew not to be true. Generally, the outcome of being faced with contradictory documentation led to an acceptance (albeit sometimes reluctantly) that the witnesses’ belief might not have been entirely correct.

16. I give, as one example of this, the early evidence of Mr Rabinovitch. He said that after the onboarding call, he received an email containing the retainer documents and was asked whether he had read them. He responded positively and stated that he was “quite good like that” i.e. in reading documentation he had received.

17. However when Mr Marven took him to paragraph 32 of his first witness statement, Mr Rabinovitch was forced to face a statement that he had not considered it necessary to read through the documentation on the basis of an assurance he had received at the telephone that all agreements for personal injury claims were the same and so there was no point in going through the documentation at the time. Mr Rabinovitch attempted to steer a path through this apparent contradiction by suggesting that he looked through some of the documentation but not all of it. It did not seem to me that he was convinced by this argument and I am afraid that I was not convinced by it at all.

18. He suggested that he was particularly interested in checking the documentation to see where it stated that he would be paying no more than 25% of his damages by way of deduction to the solicitors. When taken to the first page of the Conditional Fee Agreement (“CFA”) he alighted on a paragraph stating that the solicitors “may deduct and retain up to 25% from any interim or final damages payments received.” That tied in with his evidence that, although it was his recollection that the 25% figure was fixed, he accepted that it might have been described as being “up to 25%” or some similar phrase.

19. He was then taken to the other instance of 25% set out on that page as part of the following passage:

“…if there is a shortfall between the fees recovered from Your Opponent and your Legal Costs the maximum you will be required to pay Us for our fees over and above any sum recovered from your Opponent shall not exceed a sum equivalent to 25% of the damages you have received. The cost of the insurance premium may be payable in addition.”

20. Mr Rabinovitch was forced to accept that the last sentence of this passage referred to the insurance premium being payable in addition to the 25% deduction. This did not tally with the evidence given at paragraphs 34 to 38 of his first witness statement which said that he had not received any information about the ATE policy in the original call and had only heard about it later when the policy had been taken out on his behalf, which he assumed he was required to do as part of his claim, and that the cost of such premium would form part of the 25% deduction.

21. Nor did this fit with Mr Rabinovitch’s most firmly held view regarding his complaint about the defendant’s charges, which was that he was not aware that they would be seeking costs from his opponent in addition to a percentage of his damages.

22. Mr Rabinovitch’s evidence seemed to me to be very clearly that he had no complaints about the way that the defendant had handled his case nor the 25% deduction from his damages. Even the ATE premium seemed to cause little angst notwithstanding the terms of his evidence. However, the receipt of an invoice at the end of the case which showed that the defendant had also received monies from the original tortfeasor, was something which caused profound dissatisfaction. He said that it was the reason that he went to his new solicitors and described the revelation that the defendant had obtained more by way of costs than he had understood to be “unfair.” Whilst he used that particular word repeatedly, it was not clear to me whether he considered the situation to be unfair to himself, to the tortfeasor or to some other person. It was put to him by Mr Marven that he received exactly the same amount of money as he was contracted to receive regardless of whether the solicitors obtained more money from the opponent. Whilst he accepted that to be the case, it did not shake his view that he should have been informed of the complete picture.

23. Similarly, Mr Marven pressed Mr Rabinovitch to accept that the partial picture he said he had was entirely a result of him not reading documentation that he had received. Mr Marven suggested that if he had read that documentation as he suggested he would have done at the beginning of his evidence, then he would have had the complete picture since a recovery was clearly envisaged in the documentation? Mr Rabinovitch agreed with this but said that, if he had known about the extra recovery, he would have looked to see if other firms might have taken on this case instead.

24. I have set out these elements of Mr Rabinovitch’s cross-examination because they illustrate a point which is generally applicable to all of the claimants’ witnesses. The onboarding pack, including the CFA, formed part of the disclosure provided by the defendant to the claimants prior to the drafting of their first witness statements. Given this disclosure, it was dispiriting to hear evidence that demonstrated the witnesses had clearly not read the CFA etc even when preparing their witness statements.

25. Having heard them give evidence, I have no doubt that they simply did not look at the documentation to any great extent when it was originally emailed to them following their telephone call with the defendant. It seems to me that this makes it difficult for the claimants to argue that if they had been provided with more information they would have done something else. It is abundantly clear that they did not engage to any great extent with the information they had been provided with in any event.

26. The resiling from initial comments point relates also to Ms Webber, in some respects. But it would be fair to say that she was more inclined to stand her ground on her recollections regarding certain points. As such, it is right that I set this out, albeit that it caused other issues with her evidence. In Ms Webber’s first witness statement, she said that she had not been advised (i) about the 25% deduction, (ii) the need to take out an ATE policy or (iii) that the defendant would recover costs from the opponent. She said she only became aware that an ATE policy had been taken out during the course of the claim and she only came across the 25% deduction when an offer from the opponent was made and she received advice in writing about this deduction. The existence of the additional costs recovered from the opponent only came to light recently when the statutory bill had been delivered. In her second statement, she repeated the points about not being told of the deduction, the ATE policy and the further recovery by the solicitors. Whilst she accepted that some of these issues were covered in the document pack, she reiterated that she had not been given time to read the documents before being required to sign the documents.

27. In the witness box, Ms Webber was asked about a previous claim she had made using other solicitors. She said that she had not paid their fees, although her claim was successful. When Mr Marven asked who had paid their fees? Ms Webber said that she did not think “they were doing it for nothing.” When pressed, she said she believed the other party’s insurers would be paying for them. In this respect, it seemed to me that she essentially resiled from her written evidence that she did not believe that the defendant would receive any costs from her opponent’s insurers.

28. In relation to the 25% deduction, however, Ms Webber described notification of the driver’s insurer’s offer to settle the claim for £10,000 received by her by telephone. She said that she was not told about the deduction and that it was only when she had told her mother about the settlement that her mother had queried whether the figure was correct. She then rang the solicitors and was told about the deduction which she felt she was forced to accept on the basis that she was told it was the best that she was going to get.

29. This does not entirely tally with her first witness statement in which Ms Webber simply recorded informing her mother of the settlement. In that statement, she said that she received a letter from the defendant which advised about the deduction from her compensation. As she could not understand where this deduction came from, she then called the solicitors and was given the advice that the 25% deduction would be made. The inconsistency in how the challenge to the deduction came about perhaps does not matter, although it does chime with the Gestmin guidance about firmly held views not necessarily being more persuasive than others.

30. More importantly, in my judgment, was the certainty with which she held views concerning the signing up process that were markedly different from the other claimants and their experience. She did not consider the explainer script bore any resemblance to the conversation she had with the person who sent her the documents. She said, as did Ms Gwilliams (below), that most of the conversation related to her accident. But Ms Webber’s call became two calls since she had to end the first call in order to be able to open the documents emailed to her on her phone. Accordingly, the explainer script would have represented the entirety of the second call and it is odd that Ms Webber did not recognise the contents. I note that there is nothing specific in her statement following this comment as to what she did think had been explained to her.

31. Ms Webber accepted that, although she would have expected to receive copy documents following the telephone call, not least because there was no way she could read all of the documentation within 10 minutes, she did not in fact look at the documents sent by email until she had instructed her solicitors in respect of this claim. She also did not recall seeing a number of other letters that had been sent to her by email during the course of the claim against the original tortfeasor. She did look at a letter which included notification that an ATE policy had been incepted and which Ms Webber did not challenge. Similarly, in Ms Webber’s description of becoming aware of the deduction at the time of settlement, she did not challenge it with any vehemence. Given how pleased she said she was at the offer of £10,000 compared with the valuation advice of roughly half that sum, it is also odd that she was prepared to agree to hand over half the difference simply because she was told that was the case.

32. There is no direct evidence to contradict Ms Webber’s version of events but, given the oddity of some of it, I tend to the view that it has been affected over time in the manner described in Gestmin so that its weight is more limited than might otherwise have been the case. I take the view that the onboarding conversation between the defendant’s representative and each claimant rather more closely followed the script as is borne out by the contemporaneous transcript of Ms Gwilliams’ call and the evidence of the other witnesses that I heard.

33. A repeated refrain from all of the witnesses was that since the information was coming from a solicitor at the telephone or via email, they could trust it and so did not have to check it. However, other elements of the witnesses’ evidence suggested that this was not always their stance. For example, Ms Webber acted upon her mother’s query about whether the figures were correct on the proposed settlement in order to make sure that the figures had not been miscalculated in some way. Mr Rabinovitch gave evidence that to me suggested that he checked every letter to ensure that the deduction from his damages would be no more than 25%. Neither of these instances suggests a trust in the solicitors which could possibly obviate any need to check the terms of the retainer.

34.All of the witnesses recalled being told that the way the defendant was describing the process of pursuing the claim was that it was the same as any other solicitor would do. The implication was therefore that there was no point in going anywhere else.

35. It seemed to me that the witnesses were not entirely clear as to the extent of the defendant’s representations about what other solicitors did and it was disputed by Ms Ryan and, in submissions, by Mr Marven that the statement about what all solicitors did had any bearing on the deduction from damages. Nevertheless, it was plain to me that the script used by the defendant’s representative was intended to convey a sense of the onboarding process being standard and likely to be replicated elsewhere. The comments were carefully drafted to be defended if necessary as obligations imposed by legislation. For example, the 25% deduction figure is a statutory cap and a reference to that being the most that any other solicitor could charge would be accurate. But the repeated reference to all firms having to do certain things in my view gave the impression that the whole process was a standard exercise

36. This leads me onto the opening and concluding paragraphs of each claimant’s first witness statement. It is plain that there are a number of initial paragraphs of the witness statements which are essentially identical in order to establish the purpose behind the statement and that seems to me to be entirely unobjectionable even if the statement is intended to be in each witness’s own words.

37. However, the final paragraphs of the witness statements are a different matter. They are not in exactly the same terms but there are a number of assertions made which, in my view, would be unlikely to be apparent in each witness statement without the guiding hand of the claimants’ lawyers. To that extent it is perhaps doubtful as to the extent to which these are the claimants’ words albeit that they rejected Mr Marven’s suggestions that the paragraphs only appeared as a result of “closed” questions posed by the claimants’ solicitors.

38. For example, the statements repeatedly indicate that the claimant “now understand[s] that not all solicitors automatically deduct 25% of compensation at the end of the claim to pay for their costs.” As a result of that understanding, the claimant says that they would have shopped around to see if another solicitor could have been obtained who would charge less money.

39. The concluding paragraphs also generally reiterate a suggestion that the claimant felt pressured into signing documents with the solicitors’ representative. In the witness box, it was Mr Moult whose evidence was the most stark to my mind. He told me that he feared that he would miss out on an entitlement to claim if he did not sign up there and then. This conversation was taking place only days after his accident. Whilst he might not be expected to understand about limitation periods, there was no suggestion from him that he aired this concern at any point with the defendant’s representative. To my mind none of the witnesses were convincing in suggesting that they felt under pressure to sign. I got the distinct impression that the claimants were keen to get to the end of the process on the call but were given time to look at things if they wanted to do so. They were not pressured to complete the process.

40. Indeed, it is notable that the one claimant who did not state at the end of her witness statement that she felt pressured into signing the agreement during the call is Chelsea Gwilliams. The only transcript of any of the “onboarding calls” where the claimants and a representative of the defendant discussed the retainer documents involves Ms Gwilliams and I turn to that call now.

The transcript / onboarding

41. A verbatim transcript of the call was provided to the court along with the recording itself. The transcript runs to 25 pages and the first 20 or so pages deal with the circumstances of the accident, the claimant’s injuries, insurance details et cetera. At the end of that part of the conversation, the defendant’s representative, described as “Shane” in the transcript, indicated that the defendant would like to represent the claimant and he wished to send documents through to Ms Gwilliams in order to “explain the key points” of those documents before proceeding. On being asked how long the explanation would take, Shane said that “it shouldn’t take any longer than 10 minutes of your time.”

42. Ms Gwilliams considered that to be acceptable and so Shane sent an email containing a pack of documents whilst Ms Gwilliams remained on the call. She was able to see the documents being described to her. These involved a covering letter, a document concerning the insurance product and the CFA. In respect of the last of these documents the explanation went as follows:

“S[hane]: Okay, right so if I can just direct you to the page with the pink border, it should say the Conditional Fee Agreement.

CG: Yes.

S: Okay, now this is a standard form of agreement used by solicitors in England and Wales in personal injury and litigation cases and this document simply confirms that we will be working on a “no win no fee” basis which actually means two things. So firstly it means that if we don’t win, you will not be required to pay anything out of your own pocket and secondly, but more importantly, for you as the client, under this agreement if we fail to get you compensation then we do not get paid our basic costs. Now the Conditional Fee Agreement also outlines the success fee which is not an additional fee but it is included within the maximum 25% deduction and this is also where I need to make you aware that if any of the information you have provided is misrepresented, you dis-instruct us without our agreement or you fail to accept our advice, then you may become liable for our fees, costs and disbursements. As I’m sure you can appreciate we must make sure that we protect ourselves in these scenarios. Are you happy with that?

CG: Yep, yes that’s fine.”

43.Shane then moved on to the form of authority and signature elements of the pack. The time between the pack being emailed to Ms Gwillaims and her signing the documents electronically was 5 minutes and 7 seconds.

44.Exhibited to the witness statement of Jade Ryan were three “Explainer” scripts from 2018, 2019 and 2020. They were the prompts used when taking new clients through the pack of documents. Ms Ryan joined the defendant in April 2020 and therefore she had no first-hand knowledge of the scripts for the period before she began her role as a team leader for the customer onboarding team. She had managed to locate the scripts for 2018 and 2019 in order to exhibit them to her witness statement. There were no scripts available prior to 2018 and obviously Ms Ryan had no first-hand knowledge before that date and which was the period during which at least some of the claimants had become clients of the defendant (the earliest being 2016).

45.Ms Gwilliams’ accident occurred in April 2020 and therefore the explainer script that was meant to be followed could be compared with the telephone call recorded with Ms Gwilliams. In particular, the CFA explanation given by Shane was more or less word for word the script for 2020. The same wording in respect of the CFA applied for the explainer script for 2019. In 2018, the phrase “the CFA also outlines the ‘success fee’ which is not an additional fee, but is included within the maximum 25% deduction” was a lengthier version as follows:

“What I would like to do now is to explain to you in a little bit more detail, the costs involved in actually running your claim for compensation…

If you could please look under the heading on the right-hand side titled ‘Success Fee’.

The Success Fee is a % that we add onto our basic charges in the event the case is successful. The amount of the success fee in any particular case is based on a number of risk factors involved in pursuing a claim for compensation, such as the prospects of success, the strength of the evidence in support of your claim and the length of time the case may take to complete.

So just to be clear Mr/Mrs…this success fee is charged by us to you in a successful case but this fee is included within [the] 25% deduction from the final settlement.”