EMW Law LLP v Mr Scott Halborg
| Jurisdiction | England & Wales |
| Judge | Judge Purle QC |
| Judgment Date | 22 May 2015 |
| Neutral Citation | [2015] EWHC 2005 (Ch) |
| Date | 22 May 2015 |
| Court | Chancery Division |
| Docket Number | Case No: CH/2014/614 |
[2015] EWHC 2005 (CH)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ON APPEAL FROM THE SENIOR COURTS COSTS OFFICE
(Master Campbell)
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
His Honour Judge Purle QC (sitting as a High Court Judge)
Case No: CH/2014/614
Mr Vikram Sachdeva QC (instructed by EMW Law LLP) appeared on behalf of the Respondent
Mr Robert Marven (instructed by Deals & Disputes Solicitors LLP) appeared on behalf of the Appellant
(As Approved)
Transcript of Merrill Legal Solutions A Merrill Corporation Company 165 Fleet Street, London EC4A 2DY Tel No: 020 7404 1400. Email: mlstape@merrillcorp. com (Official Shorthand Writers to the Court)
There are 2 appeals from 2 Orders dated 24 October and 24 November 2014 respectively. The first raises familiar issues of practice and pleading. The second raises a novel point concerning the assessment of solicitors' costs of considerable significance and importance. Permission to appeal has been granted by Nugee J, in the case of the first appeal on limited grounds only.
The Claimant ("EMW") is a Limited Liability Partnership, consisting of practising solicitors. They are represented by themselves and by Counsel, Mr Vikram Sachdeva QC.
The Defendant ("Mr Halborg") is another solicitor, who retained EMW as agent, under a conditional fee agreement ("CFA") between himself and EMW, in litigation brought by him as a solicitor for his parents and a family company, who were the lay clients. Thus, Mr Halborg was the solicitor on the record. He is represented in these proceedings by Deals & Disputes LLP, of which he is a member, and Mr Robert Marven of Counsel. As Deals & Disputes LLP has a separate legal personality (unlike unincorporated partnerships) he is not treated as acting for himself, though, colloquially speaking, he is.
The earlier litigation was compromised by a substantial payment to the lay clients, with costs to be assessed. The condition for payment of EMW's costs under its CFA was (broadly) recovery from the losing party.
A bill was prepared by a costs draftsman retained by Mr Halborg and submitted to the losing party. That bill contained a certificate (presumably signed by Mr Halborg, though I have not seen a copy of the bill as delivered) that the costs claimed in the bill, which included charges for EMW's labours, did not exceed the costs which the clients were required to pay Mr Halborg. EMW had previously made its time records and other material available to the costs draftsman. I was also told during the hearing that there was correspondence between EMW and Mr Halborg prior to preparation of that bill including the submission of figures for inclusion within the bill. However, no reliance is presently placed on that earlier correspondence.
The costs liability in the earlier proceedings (or part of that liability) has apparently been dealt with in some way, as between Mr Halborg and the losing party, on undisclosed terms which have not resulted in payment to EMW of any costs.
The proceedings before me ("the SCCO claim") are brought under CPR Part 67, as they relate to the remuneration of solicitors. EMW seeks an assessment of its costs under section 70 of the Solicitors Act 1974 ("the 1974 Act"). Though started, as the rules require, as a Part 8 claim, pleadings have subsequently been served. The rationale behind the SCCO claim appears to be that either the condition under EMW's CFA with Mr Halborg has been satisfied or, if it has not, EMW can nevertheless proceed to an assessment because the breaches of contract and other matters alleged against Mr Halborg mean that he has prevented the condition from being met.
There are also pending proceedings subsequently issued in the Chancery Division ("the Chancery claim") for damages for breach of contract. At least part of the motivation for the Chancery claim is the availability of disclosure. The relief claimed is different, there being no claim under section 70 of the 1974 Act. The claim is for damages for breach of contract. The thinking is that if the breaches are established, they may be said to have prevented the collection of EMW's costs, sounding in damages.
It is said by Mr Marven that the SCCO proceedings should be struck out as embarrassing. It is not clear, he says, whether damages for breach of contract are sought or merely an assessment. Moreover, the pleading as a whole is vague and unclear. The Part 8 procedure is in any event unsuitable, as are proceedings in the SCCO. He acknowledges that these later objections could be dealt with by directing that the proceedings continue as a Part 7 claim, and/or by directing the SCCO claim to continue in the Chancery Division. He says I should not countenance that, as the existing Chancery claim overlaps. Those proceedings do not however claim an assessment under section 70 of the 1974 Act.
Master Campbell declined to strike out the claim and in my judgment he was right (or at least entitled) not to. The SCCO claim could certainly be better pleaded, but it is intelligible (and has been pleaded to) albeit difficult to follow in parts, and ambitiously pleaded (and in some respects inaccurate) in other parts. The cumulative effect does not however justify a strike-out of the whole of the pleading on this ground. Moreover, whilst there is obvious overlap between the 2 claims, it is clear to me that the SCCO proceedings do not claim damages for breach of contract, and the Chancery proceedings do not claim an assessment under section 70 of the 1974 Act.
A separate point is taken on section 70 of the 1974 Act. It is said that the cause of action is flawed as there was no bill of any kind, still less one which complied with section 69 of the 1974 Act, delivered by EMW to Mr Halborg, and still there is not. (I mention parenthetically that there is also an issue as to whether a valid bill was delivered later. Master Campbell declined to grant summary judgment in favour of Mr Halborg on this ground and permission to appeal this ruling has not been given.)
The bill which was prepared for the claim against the losing party in the earlier litigation was not a bill delivered by EMW to Mr Halborg. This was Mr Halborg's bill, which included and claimed from the losing party everything which EMW now claims from Mr Halborg.
Section 70 must be read in conjunction with section 69 of the 1974 Act. Section 69(1) in general precludes an action for recovery of costs before the expiration of one month of delivery of a bill complying with the conditions of subsection (2). Section 70(2) also reads as if the delivery of a bill is a pre-condition to any application by a solicitor for the assessment of costs.
It is well settled that, despite the requirement for a bill, a solicitor's cause of action arises when the work is done: see Edginton v Sekon [2012] EWCA Civ 1812, applying Coburn v Colledge [1897] 1 QB 702, a case on one of the 1974 Act's predecessors, section 37 of the Solicitors Act 1843. Sections 69 and 70 are merely procedural requirements, not a pre-condition of the cause of action's existence. That being so, it must (at least arguably) follow that proceedings can be started, for recovery or assessment, even before a bill is delivered, though they might be stayed, or not finally concluded, until a proper bill is delivered.
It cannot be said, therefore, that EMW does not have a realistically arguable cause of action in the present case.
I was referred to a number of cases concerning (primarily) defective bills. It is well established that, in special circumstances, a defective bill may be withdrawn and substituted by a new bill. It seems to me that the position is no different in principle between a defective bill and no bill and that the requirement of a section 69-compliant bill is not a pre-condition of the right to commence proceedings in either case. The point is at least arguable with a realistic chance of success and unsuitable for determination at the summary judgment stage.
The present circumstances are also, at least arguably, exceptional. EMW merely wishes to claim that part of Mr Halborg's own bill of costs which exactly reflects EMW's own input, and which Mr Halborg certified as not exceeding the amount due from the clients. It is perhaps surprising that there could be any argument over the quantum of the bill. Certainly, Mr Halborg cannot claim to be surprised by the bill. It was also redelivered in February 2014, limited to the part containing EMW's charges alone.
A separate attack is made on parts of the pleadings relating to implied terms. A number of implied terms are pleaded. The main ground of attack against those parts of the pleading is that they contradict the express terms. The relevant part of the CFA stipulated as follows:
"If the clients win their claim, the Solicitors' agents will be entitled to be paid by the Solicitors our basic charges, our disbursements and a success fee provided the same has first been recovered in full from the Opponents by the clients and/or the Solicitors; and without limitation it is a condition precedent to our receiving any payment pursuant to this Agreement that the clients and/or the Solicitors have first received payment in full from the Opponents in respect of any specific fees and/or disbursements of the Solicitors' agents."
In the Particulars of Claim, the claim was made against 4 defendants. The first 3 defendants were the ultimate lay clients,...
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Emw Law LLP (Respondent/Claimant) v Mr Scott Halborg
...Court, concluded that Master Campbell had been "right (or at least entitled) not to" strike out the claim as against Mr Halborg (see EMW Law LLP v Halborg [2015] EWHC 2005 (Ch), [2015] 4 Costs LO 427, at paragraph 10). Mr Halborg has appealed to the Court of Appeal against a finding by Mast......