27 May 2022

Julie Meyer contempt appeal fails

American venture capitalist and founder of Ariadne Capital, Julie Meyer has lost her appeal against a contempt finding and suspended prison sentence.

In January, Meyer (who has been involved in a dispute with Farrer & Co over unpaid fees) was given a suspended prison sentence over her failure to attend court for debtor questioning and provide documents. The judge stated that Meyer had shown herself to have been 'selfish and untrustworthy' and someone who's word counted for nothing. When she failed to attend a later hearing a warrant was issued for her arrest.

Meyer appealed the contempt finding arguing that the judge had no jurisdiction owing to Farrer & Co not complying with some procedural requirements, and that the sentence itself was excessive. That argument was rejected by the Court of Appeal with Lord Justice Males stating that the complaints regarding the procedural requirements were entirely technical and that Meyer had not argued that she had relied on the procedural deficiencies, or that she had suffered any prejudice as a result.

Dismissing the appeal the court stated that the original judge rightly concluded that this was a 'deliberate and cynical breach of the order' which would remain in place until it was obeyed.

23 May 2022

Proposals for fixed costs 'may not be workable'

Sir Bob Neil MP, the chairman of the justice select committee, has voiced his reservations about the proposed fixed costs regime for small value clinical negligence cases.

Speaking at the Society for Clinical Injury Lawyers Sir Bob voiced concerns about the limited impact assessment that had taken place and the possibility of unregulated firms entering the market. It is widely anticipated that lawyers will be driven out of the market for small claims if the proposals go ahead.

The government published its consultation document on fixed costs at the end of January (much along the lines of Sir Rupert Jackson's 2018 report) setting out proposals to 'streamline' claims with a value below £25,000. It also published a draft set of procedural rules that would apply to such cases.

In April this year the Association of Costs Lawyers expressed its own concerns regarding the proposals, arguing that the proposed new streamlined track alone would reduce costs and should be introduced without a fixed costs regime.

Meanwhile the date proposed for implementing the fixed costs regime has now been put back to April 2023.

7 April 2022

£1,131 per hour? 'Clear and compelling justification' required to recover above guideline says Court of Appeal

In a one-day appeal concerning the appropriate forum for trial, US law firm Cleary Gottlieb Steen & Hamilton LLP had their costs reduced from £72,800 to £55,000.

The highest rate claimed in the schedule of costs was £1,131.75 per hour for a grade A fee earner, converted from a rate of $1,475.75 and up to £704 per hour for grade C.

Accepting that the rates it was seeking were above the guidelines, CGS&H pointed out that this was almost always the case in competition litigation and that, where possible, they had delegated and allocated work to more junior team members.

Lord Justice Males said that although he recognised that in substantial and complex litigation an hourly rate in excess of the guideline figure may sometimes be appropriate, it was important to have in mind the fact that the guideline rates for London already assume that the work is 'very heavy commercial work'. It was not enough to say that the case was a 'commercial case, or a competition case, or that it has an international element, unless there is something about these factors in the case in question which justifies exceeding the guideline rate' and that there was nothing in the appeal that justified exceeding the guideline rate. The case was not document heavy and the amount claimed at £900,00 was modest by the standards of commercial cases.

4 January 2022

Solicitors lose £36k plus costs in client dispute

London law firm Richard Slade & Co (RS) has lost its appeal against a decision of Master Haworth who had held that it had terminated its retainer with its client without good cause or reasonable notice.

James Murray v Richard Slade & Co [2021] EWHC 3383 (QB) concerned a solicitor client dispute where RS were instructed by Mr Murray in a professional negligence claim. The outstanding fees in dispute amounted to £16,200. Additionally, RS also sought counsel's fees of £20,000.03, relating to a separate but substantial declaratory relief claim where RS had acted for Mr Murray's parents. A claim of £6,000 was made for costs.

RS relied upon a letter of complaint from Mr Murray, which was treated by them as terminating a CFA and, in their view, amounting to repudiatory breach. The Master had found that, contrary to what was asserted by RS, the CFA retainer had not been terminated and disallowed the £16,200 fees. He also awarded £21,000 costs of the preliminary issues hearing to Mr Murray.

On the second bill for counsel's fees, Master Haworth held that counsel had been instructed without the client's authority and the fee was unusual. Firstly, the fee did not include a refresher fee and secondly it exceeded the budget for the trial. This was not explained to the client.

Dismissing the appeal, Sir Andrew Nichol stated that:

'In modern times, solicitors have to accept that complaints (whether of poor service or as to fees) go with the territory of professional practice'

Afqar Dean is an expert in solicitor client disputes and legal costs. He can be contacted on 020 3633 6827

25 November 2021

Master criticises 50k costs in 3k data claim

Master Thornett has criticised the level of costs in a 'very modest' data breach claim. In Johnson v Eastlight Community Homes Ltd [2021] EWHC 3069 (QB), the Claimant had sought over £50,000 including £15,000 of incurred costs and had suggested a two-day trial in the case where it is also making additional claims for alleged breaches under Article 8 ECHR, GDPR, the Data Protection Act as well as injunctive relief, the latter of which the master described as 'misconceived'
In his judgment, Master Thornett said the claim was factually straightforward. The Claimant is a tenant of the Defendant who requested her rent statement, which was inadvertently circulated to one-third party, who immediately notified the Defendant, and the emails were deleted. The Defendant admitted the breach, apologised, and reported the matter to the Information Commissioners Office.
The suggestion by the Claimant that this was a developing area of the law was dismissed by the master, who said he saw no basis for issuing such a claim that comes nowhere close to the £100,000 plus High Court value requirement under PD7A paragraph 2.1. He went on to say:

'Everything about this case has all of the hallmarks of a Small Claim Track claim that should have been issued in the County Court and so allocated. The suggestion that this is a developing area of law or where, even if the principle is established, requires an elaborate and complex legal argument is unrealistic if not, at least arguably, opportunistic.
Countless examples could be found daily in virtually every County Court in this jurisdiction where limited time and resources and the requirements of the overriding objective combine to oblige the pragmatic and proportionate application of the legal principle. The lure of adopting a more elaborate and expensive approach just because the subject matter can so permit is simply unacceptable. Put bluntly, the garment must be cut according to the cloth. So, accordingly, is potentially complex law applied proportionately in lower value claims in a way compatible to the limited resources those cases justify.
The only reason why the claim has been subject to a detailed legal argument is because the Defendant is appropriately concerned to defend resolutely a claim brought in the High Court where the future costs and time to be incurred by a social housing client would always be grossly in excess of the matter in dispute and with little clear prospect of recovery even if successful. Clearly, the Defendant in raising such a challenge, also has to act proportionately. However, the Claimant can hardly complain if the Defendant's response has been contextually proportionate to the very venue chosen by the Claimant in which to litigate.'

The Claimant's solicitors, Pure Legal went into administration on 2 November 2021.

19 November 2021

SRA proposes changes in power to fine

The SRA has opened a consultation that could lead to a shake-up of its powers to fine law firms for lower-level offences. The body oversees some 10,000 law firms and under the proposals, the income of the firms would be considered with fines up to a maximum of up to 5% of annual turnover being proposed for larger firms.

Other proposals include introducing a schedule of penalties from £800 up to £1,500 for offences such as failing to respond to the Anti Money Laundering risk assessment declaration. The aim is to speed up and streamline the process, which can often become administratively cumbersome.