Costs News

20 December 2017
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Costs judge rejects ex-clients’ bid for copies of documents that belong to firm

A costs judge has refused an application by a law firm’s former clients for copies of documents that belonged to the firm so that they could bring a Solicitors Act assessment, finding that the claimant was not entitled, as of right, to receive copies.

Master Leonard said the Senior Courts Costs Office has, over the past year, received an increasing number of such applications.

“For that reason, I propose to address the issues in some detail in the hope that doing so may help to reduce the scope of future disputes.”

Green & Ors v SGI Legal LLP [2017] EWHC B27 (Costs) concerned four applications for delivery up of papers under section 68(1) of the Solicitors Act 1974 by former SGI clients so their new firm, JG Solicitors, could consider the viability of a section 70 assessment of their bills.

It was common ground that in all four cases, the application was issued some months after SGI supplied, in accordance with published Law Society guidance, all of the documents which belonged to each claimant. But SGI refused to supply copies of documents which it owned.

The claimants sought an order for delivery of copies of certain of those documents in return for paying the “reasonable costs” of providing them, which they put at 15p per copy.

Having originally sought a broad range of documents, at the hearing counsel for the claimants limited the applications to copies of funding documents, all correspondence sent to the claimants, and all invoices created during the currency of the retainer.

Master Leonard said it was for the claimants to show that they were entitled, as of right, “to receive copies of another person's property, even on agreeing to pay the proper cost of supplying it”.

He continued: “If one person writes a letter to another, keeping a copy, it is not self-evident that the recipient can require another copy on demand, even on agreeing to pay for it. The mere fact that the defendants were formerly the claimants' solicitors does not seem to me to change that. Nor does the fact that such letters are, by definition, not confidential as between the parties…

“The question is to my mind not whether there is authority to the effect that the claimants are not entitled to receive copies of the defendant's property, but whether there is authority to the effect that they are.”

The claimants conceded, on the authority of Leicestershire County Council v Michael Faraday & Partners [1941] 2 KB 205, that they had no right to require that the defendants supplied, for example, copies of file notes or ledger entries that remained their property, on payment or otherwise.

But they sought to distinguish this case by reference to the fact that they had limited their claim to copies of three categories of documents, all of which they said were created for their benefit. They also argued that paragraph 6.4 of practice direction 46, which requires various supporting documents to go in with an application for detailed assessment, that the client should be able to obtain them from the solicitor.

Master Leonard said: “I am unable to agree. The purpose of creating documents for the client's benefit is fulfilled when those documents are given to the client. Supplying extra copies is another matter.

“A client who wishes to challenge a solicitor's charges, but who has nonetheless lost or destroyed the key documents upon which that challenge is based, will obviously be at a disadvantage. It does not follow that the solicitor has any obligation to compensate for that.

“Nor will a client's inability to supply the required documents with an application for detailed assessment in itself invalidate the application. CPR 3.10 makes that clear, and a practice direction, whilst important, is not a rule. The court has a degree of discretion, to be exercised in accordance with the overriding objective. In practice such problems do arise, and they can generally be managed.

“The suggestion that the client should be entitled to copies of the defendant's entire file in order to obtain advice on applying for detailed assessment is consistent with the line taken by the claimants prior to the hearing of the application, but is fatally undermined by their concession (to my mind both proper and correct) that they are not so entitled.”

He said the proposition was in any event inconsistent with settled law as to what a client needed in order to consider whether to challenge a solicitor's bill. “Ralph Hume Garry (a firm) v Gwillim [2002] EWCA Civ 1500 established that a bill delivered by a solicitor must (judged in the context of the information already known to the client) contain sufficient information to allow the client to understand what is being charged for and whether it would be appropriate to take advice about challenging it.

“If the bill does not meet that standard, it will not be compliant with the 1974 Act. It will be unenforceable, and the statutory time limits within which the client must apply for detailed assessment will not start to run. That does not fit with the proposition that there is any additional need for, or right to, copies from the solicitor's file.”

The master also suggested that the claimants' claim to a freestanding right to obtain copies of the defendant's property attempted to bypass the pre-action disclosure provisions at CPR 31.16.

“Finally, bearing in mind that the application has been narrowed down to incorporate only copies of documents which in the normal course of dealings will already have been supplied to the claimants, I do have concerns about the fact that I have seen no evidence that any consideration has been given as to the extent to which those documents are already in the claimants' possession…

“It does not seem to me to be appropriate that the parties should incur substantial costs on a demand for documents where that need has not been properly considered and clearly established.”

As a result, Master Leonard dismissed the applications.

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