Raydens Ltd v Ms Julie Cole
| Jurisdiction | England & Wales |
| Judge | Leonard |
| Judgment Date | 30 July 2021 |
| Neutral Citation | [2021] EWHC B14 (Costs) |
| Docket Number | Case No: F5QZ77FA |
| Court | Senior Court Costs Office |
[2021] EWHC B14 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
FROM THE COUNTY COURT AT LUTON
Thomas More Building
Royal Courts of Justice
Strand, London WC2A 2LL
COSTS JUDGE Leonard
Case No: F5QZ77FA
SCCO Reference: SC-2020-APP-000788
Martyn Griffiths (instructed by Keidan Harrison) for the Claimant
Simon Teasdale (instructed by Railton Law) for the Defendant
Hearing date: 28 May 2021
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
COSTS JUDGE Leonard
The Claimant solicitors acted for the Defendant in matrimonial proceedings between November 2013 and September 2018. The conducting solicitor was Mr Julian Bremner, a partner, assisted by solicitor Che Meakins.
The substantive proceedings included a divorce suit, ancillary relief and Family Law Act non-molestation and occupation order applications (the FLA proceedings were themselves listed for a two-day hearing). The proceedings concluded, in the course of an ancillary relief hearing listed for four days, with an order of District Judge Gibson dated 25 May 2017, which incorporated agreed terms of settlement.
The order provided, among other things, for the Defendant's ex-husband (“the Respondent”) to pay to the Defendant a lump sum of £800,000. Of that sum £290,000 was to be paid by 19 July 2017, to be applied in the first instance to clearing the Defendant's incurred costs, defined so as to include loan liabilities to litigation funder Novitas and to meet the Claimant's fees and disbursements insofar as not already paid through that loan. Payment was not however made until 28 September 2018.
Over the period between November 2013 and September 2018 the Claimant rendered bills totalling (inclusive of VAT) £263,426.11, of which £44,298.02, excluding any claim to interest, is outstanding. Had the payment ordered on 27 May 2017 been made in time, I understand that it would have discharged all liabilities with a surplus payable to the Defendant, but the need to pay additional interest accruing on the Novitas loan during the period of delay resulted in a shortfall.
Costs Disputes and Recovery Proceedings
The communications to which I am about to refer followed a long history of protracted, difficult litigation, mounting costs and funding difficulties. I am focusing upon them because they incorporate the Defendant's complaints to the Claimant about costs, and they offer some insight into the Defendant's state of mind at the time.
On 25 April 2018, during the long wait for the Respondent to meet his payment obligations under the order of 25 May 2017, the Defendant sent an email to the Claimant:
“As previously mentioned to you, I feel like I have had the worst divorce in history and felt very let down after the final hearing back in May last year. I felt that the court case just went ahead so that a settlement could be reached and everyone could get paid.
The failure to finalise the agreement when I was going to buy the house in Lytton Avenue, has cost me so much. I had come to you for professional advice, and felt every confidence that you would give it to me.
The best divorce settlement, was probably the offer on the table for the purchase of Lytton Ave at £800,000 and monthly payments of £2,300 per month and my fees at that point stood at £39,000.
Unfortunately the deal collapsed, and 3 years later I settled for monthly payments of £3,250 and a balance of £500,000 when Nick can afford to pay me, which probably won't even buy me a small house, let alone 4 bedrooms so that I can offer my children a home.
The net result is that I am out of pocket £290,000 plus the inflation on house prices. The fact that Novitas wouldn't lend me any more money to pay your fees forced me I feel to settle with unfavourable terms.
My divorce should not have cost this much and your fees are nearly half of my divorce settlement. I always knew that getting divorced would be difficult and I feel that the law has not protected me and has been merely a vehicle for your company to earn huge fees.
I am still suffering from depression and I can't hold a job down. I have no money and I am stuck in a house which isn't mine and I can't afford to run and quite frankly I don't think there is anything good about my life at present.
My friends are very concerned about me and think I am heading for a breakdown. It is 5 years since I first asked for a divorce and I can't help feeling that things would have been very different if the Lytton Avenue deal had gone through.
My main concern as you know, is that Nick has to give me the money to pay my fees and feels that I was given bad advice and not happy about me taking out the loan agreement with Novitas. He says my depression meant that I wasn't able to think clearly and make rational decisions. I am beginning to think he is not all together wrong, though I hate to admit it, as I recently started a new job and they let me go after two weeks because they didn't have any confidence in me.
My divorce has gone on for so long and I can no longer function and I need to rebuild my life. The only way I will can even start to do this is if my debts are settled and not playing constantly on my mind. The only possible way that I can do this is to get a reduction in the fees to placate Nick and then he will pay them as soon as possible I am therefore asking if you would cap your fees at £170,000. I will pay the disbursements, Counsel and expert fees, plus the VAT. I realise that this is a huge fee write off, but it will still have cost me nearly £200,000 plus the interest, to get divorced….”
Mr Bremner, having consulted Novitas and reviewed his files, replied on 8 May 2018. His response was detailed and I will not reproduce it in full. In essence his key points were that the case had been one of the most problematic he had dealt with in many years of practice; that costs had been increased by a seeming desire on the part of the Respondent and his solicitors to make things as difficult as possible, probably in the early stages exacerbated by a desire on the Respondent's part to force the Defendant to return to him; that the available assets had been adversely affected by attempts on the Respondent's part to depress the value of Benchmark Fabrications Ltd (the business at the heart of the family finances) which had triggered a real crisis; that the proposed “Lytton Avenue” settlement had failed due to the Respondent's refusal either to enter into binding heads of agreement or to make necessary commitments without court orders, and unrealistic expectations on the part of his solicitors as to when that could be achieved; that the settlement finally reached provided the Defendant with spousal maintenance on a joint lifetime basis, in respect of which the Defendant could apply for an increase and which had not been a feature of the “Lytton Avenue” proposal, which incorporated no spousal maintenance and minimum child support; and that the litigation difficulties, and the Defendant's own depressed state of mind, had been exacerbated by her refusal to enforce orders such as an occupation order preventing the Respondent visiting the Defendant's home without her agreement.
Whilst accepting that one of the problems was the refusal of Novitas to provide further funding at a crucial juncture, Mr Bremner also said that the Claimant had departed from its normal policy in continuing to act for the Defendant without payment, the Defendant being only the second client for whom he had ever done that; that the settlement achieved on 27 May 2018 had been freely entered into by the Defendant without undue pressure, her advisers being ready to proceed to the conclusion of the hearing; that the aims of that settlement had been undermined by the Respondent's failure to pay £290,000 within the agreed time; and that the Defendant had already advised the Claimant to the effect that she could take steps against the Respondent to require him to make up the losses caused by his delay.
Mr Bremner advised the Defendant that if he were to render a bill at that time, there would be an outstanding balance of £28,307.49, of which all but just over £10,000 could be recovered from the Respondent, should the Defendant choose to act. He concluded:
“Julie, it troubles me greatly that you find yourself writing to me in the manner in which you do. For my part, I strongly believe that you have received the best possible advice you could have as each and every incident has arisen over the long running course of this matter.
I also think you have been fully supported by this firm at a time when it did not need to (and perhaps should not have) in continuing to work for you on the transparent fee estimates provided to you throughout these proceedings. You could have, upon receipt of these monthly advices (or interim month when needed) or other key letters setting out your costs asked this firm to stop work at any time. Knowing the costs that we were asking you to pay, you continued to instruct us. This was in the knowledge of the financial landscape at the time and in the context of the cost benefit analysis to you being explored in correspondence and in conference with Counsel.
I have spoken to Katherine Rayden, who as managing partner in charge of the firms finances, is not prepared to offer a discount on the firms fees; this is on the basis that we offered to work for you without payment until your received funds. The firm adhered to its agreement with you. However, the firm will not charge interest on late payments of existing debts.
If you would like to meet with me and, perhaps, Nadia Biles-Davis, who is the firms' client complaint handling partner, then I...
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