Gempride Ltd v Bamrah & Anor  EWCA Civ 1367
In June 2018, the Court of Appeal issued what has been called a “watershed” decision in relation to misconduct in Detailed Assessment proceedings. The Court issued a penalty which saw the successful claimant lose 50% of their profit costs for claiming an inflated hourly rate. A stern warning was also issued stating that solicitors who instructed cost draftsmen and other subcontractors “remain ultimately responsible for the acts and omissions of those to whom they delegate parts of the conduct of litigation, particularly when those to whom such work is delegated are not authorised”.
The facts of the case
The background to this case is very unusual. The claimant, a sole practitioner, set up her firm on 3 July 2009, and her first client, who appeared a week later, was herself. She made a claim in personal injury on the grounds she tripped over the doorstep of the defendant’s flat when she was visiting a client.
She sent the defendant a Letter of Claim, and two months later, the insurer, Axa, admitted liability.
In the interim, the claimant contacted her own insurers. She had the benefit of a Before The Event (BTE) insurance policy under which a panel solicitor would act at a predetermined rate of £135. The claimant made it clear that she wanted to conduct her own claim at her own rate which was £232. The insurers explained that this was unacceptable. However, the claimant rejected the cover and purported to enter into a CFA with herself, a void agreement as she could not be both parties to the contract.
The claim was ultimately settled for £50,000 after being transferred to another firm.
Costs now had to be determined, and the claimant sought her charges for work that she had performed from inception through to the point where a new firm took over conduct. The cost’s firm, Lawlords, drew a bill claiming £280 throughout despite a retainer set at £232.
The certification, which read, “I certify that this bill is both accurate and complete and…in respect of Part 1 of the bill the costs claimed herein do not exceed the costs which the receiving party is required to pay me/my firm”, was signed by the claimant on behalf of Falcon Legal.
The rate of £280 was challenged by the defendant, who also stated the claimant had misled them, falsely stating she did not have BTE insurance, when in fact she did, and if it had been utilised would have led to cheaper legal costs.
At first instance, Costs Master Leonard awarded the claimant costs as if she were a litigant in person. This was reversed by the High Court on the grounds the claimant had relied upon experts to draw up the bill, and she should not suffer for their mistake.
The Court of Appeal’s Decision
On appeal, the Court held that the claimant had not acted dishonestly. However, it was held her conduct in signing off the inflated costs was ‘unreasonable and improper’.
According to a report in the Law Society Gazette, Lord Justice Hickinbottom said the claimant had shown ‘essential recklessness’ by signing off the inaccurate bill, and her acceptance of the defendant’s costs offer was “incapable of any sensible explanation”.
The judge stated, “it seems to me to be an important matter of principle that solicitors on the record – and other authorised litigators and ‘legal representatives’ for the purposes of the [civil procedure rules] – understand that they remain ultimately responsible for the acts and omissions of those to whom they delegate parts of the conduct of litigation”.
The claimant plans to appeal to the Supreme Court, telling the Gazette:
“The Court of Appeal has held me liable for shortcomings in the conduct of costs draftsmen instructed by me to deal with the relevant detailed assessment proceedings, and upon whom I relied. As a result of advice from my legal advisers that I have valid grounds for appealing, and that this case raises points of law, and of practice and principle, which are points of general public importance, especially to the solicitors’ profession, costs lawyers, and costs draftsmen”.
What this case means
The result of the Court of Appeal decision meant the successful claimant saw her Assessment Costs halved. The appeal outcome will be watched with interest, but it is crucial for all Solicitors to take ultimate responsibility for any work performed by a subcontractor. And it is important to note that although it was not open to the Court to make a finding of dishonesty because the finding of facts in the lower court held, it would be open for a Court in another similar situation to make a finding of dishonesty.
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