Proceedings – Strike out – Abuse of process – Claimant solicitors proceeding against defendant former client for unpaid fees and costs – Defendant applying to strike out of claim as abuse of process – Whether claimant failing to comply with court orders – Application granted in part
The claimant was the defendant’s former solicitor. It issued a claim against the defendant for the sum of £193,918.06 allegedly owed in respect of unpaid fees and costs arising out of four pieces of litigation; the Rufus claim, the freezing injunction claim, the Catherine claim and the landlord claim. The defendant had apparently paid £22,210, leaving a balance of £171,708.06.
The defendant applied to strike out all or parts of the claim. He contended, among other things, that: (i) the claimant had not delivered bills complying with section 69 of the Solicitors Act 1974; (ii) the entire claim, alternatively the Rufus, Catherine and landlord claims, should be struck out as an abuse of process; and (iii) the entire claim should be struck out because of the claimant’s repeated failure to comply with court orders..
The claimant contends that the defendant’s application was itself an abuse of process and a vexatious application, because it was aimed at prejudicing the ongoing costs assessment; that since the issues raised in the application were related to the claimant’s costs, the Senior Costs Office should be allowed to complete its assessment and therefore there was no justification for the application; that most of the issues had been raised at the hearing before the master and conclusively dealt with; and that, in any event, it was too late for the defendant to challenge the Rufus claim, given that an interim payment order had been made and the defendant had not appealed against it.
Held: The application was granted in part.
(1) Section 69 of the Solicitors Act 1974 provided that no action should be brought to recover costs due to a solicitor before the expiration of one month from the date on which a bill of those costs, signed by the solicitor or on his behalf by an authorised employee or enclosed in or accompanied by a latter so signed, was delivered to the client. However, the fact that a bill of costs failed to comply with one or more of those requirements did not mean that it necessarily had to be struck out without consideration of the merits. The court had jurisdiction to allow the solicitor in special circumstances to withdraw a defective bill and re-serve it: In the present case, the master had ordered the claimant to deliver bills complying with section 69, without any apparent objection from the defendant. In those circumstances, if there were no question of recent creation of documents or other abuse of process, the court would refuse to strike out on the ground that the bills had not been delivered before the claim was brought: see Chappell v Mehta [1981] 1 All ER 349; Alceo Zuliani v Vernon S. Veira Co [1994] 1 WLR 1149 and Hakendorf v Vyvian [2004] EWHC 2821.
(2) The task of the Senior Courts Costs Office was to enquire as to what sums were due to the claimant for services rendered. The court’s task was the very different one of determining whether the claim should be struck out; if or insofar as it should, the claimant should not be put to the time and trouble of a detailed assessment. None of the issues before the court had been considered, let alone dealt with, by the master. As for the interim payment order, the master had not given the claimant summary judgment on the Rufus claim, and in any event no question of fabrication of documents or deliberate exaggeration of fees had arisen at that stage. Accordingly, the making of the interim payment order did not preclude the court from considering those issues. On the other hand, in considering the application the court had to avoid a mini-trial or a lengthy and detailed examination of the facts. It also had to be aware of the dangers of coming to factual conclusions without the benefit of disclosure and oral evidence where the credibility of witnesses was at stake, and in particular where, as here, serious allegations of deliberate over-inflation were being made. However, that did not mean that the court had necessarily to take at face value and without analysis everything that was said in witness statements.
(3) On the evidence, the claimant had been guilty of abuse of process in bringing the Rufus claim in reliance on deliberately exaggerated fees, and in bringing the Catherine claim in reliance on fabricated documents and on a bill of costs which had been drawn up knowing it to be inaccurate. The abuses involved a serious misuse of the court’s procedure. Further, they rendered further proceedings thoroughly unsatisfactory and created a serious risk that a fair trial of the claims would be impossible. In addition, it would be unfair on the defendant to subject him to the time and cost involved in a detailed assessment of the claims. However, it would be disproportionate and unfair on the claimant to strike out the freezing injunction and landlord claims merely because they had been brought together with the Rufus and Catherine claims. Although it appeared that the claimant had failed from time to time to comply with timetables, practice directions and court orders it would be disproportionate to strike out any of the claims on that ground.
In all the circumstances, the Rufus and Catherine claims would be struck out but the freezing injunction and landlord claims would not be struck out.
Oluwole Ogunbiyi (instructed by Alpha Rocks Solicitors) appeared for the claimant; Robert-Jan Temmink (instructed by Teacher Stern LLP) appeared for the defendant.
Eileen O’Grady, barrister
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