Westlaw Services Ltd and Another v Boddy

JurisdictionEngland & Wales
JudgeLORD JUSTICE ETHERTON,LORD JUSTICE GROSS,LORD JUSTICE RIX
Judgment Date30 July 2010
Neutral Citation[2010] EWCA Civ 929
Docket NumberCase No: A2/2009/1496
CourtCourt of Appeal (Civil Division)
Date30 July 2010

[2010] EWCA Civ 929

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

LEEDS DISTRICT REGISTRY

Before: Lord Justice Rix

Lord Justice Etherton

Lord Justice Gross

Case No: A2/2009/1496

Between
(1) Westlaw Services Limited
Appellants
(2) Tahir Khan
and
(1) Lisa Ann Boddy (Executrix to the Estate of Peter Boddy)
Respondents
(2) Solicitors Regulation Authority (intervening as an Interested Party)

Mr Robert Englehart QC (instructed by Carter Fox) for the First Appellant

Mr Kevin Metzger (instructed by Carter Fox) for the Second Appellant

Mr William Buck (instructed by Close Thornton) for the First Respondent

James McClelland (instructed by Russell Cooke) Second Respondent

Hearing dates: 9th July 2010

LORD JUSTICE ETHERTON

Introduction

1

This is an appeal from an order on 22 June 2009 of His Honour Judge Langan QC, sitting as a High Court judge, by which he dismissed the claim of the First Appellant, Westlaw Services Limited (“Westlaw”), pursuant to CPR 3.4, and he dismissed the claim of the Second Appellant, Tahir Khan (“Mr Khan”), pursuant to CPR 3.4 and CPR Part 24. Westlaw claimed as assignee of Kush Verma (“Mr Verma”). The claims were for payment for services provided by Mr Verma and Mr Khan to Peter Boddy (“Mr Boddy”), a solicitor, who died on 19 February 2004. The claims were against Mr Boddy's widow, Lisa Ann Boddy, as executrix of her husband's estate. She is the First Respondent to these appeals. The essence of the reasoning of the Judge was that the alleged agreements between Mr Verma and Mr Khan with Mr Boddy were unlawful agreements to share fees, in breach of Rule 7(1) (“Rule 7(1)”) of the Solicitors’ Practice Rules (“the SPR”) 1990, and so were void and unenforceable.

2

The Second Respondent is the Solicitors Regulation Authority (“the SRA”), which has intervened in the appeals as an interested party.

Rule 7(1)

3

At the date of the alleged agreements with Mr Boddy Rule 7(1) was as follows:

“(1) (Fee sharing – the general rule)

A solicitor shall not share or agree to share his or her professional fess with any person except:

(a) a practising solicitor;

(b) a practising lawyer of another jurisdiction (other than a lawyer who has been struck off the register of foreign lawyers or the register of European lawyers, or whose registration has been suspended);

(ba) a non-registered European lawyer partner in a partnership permitted by paragraph (6)(c) of this rule;

(bb) a body corporate wholly owned and controlled, for the purpose of practising law, by lawyers within sub-paragraph (b) above, but without the involvement of registered European lawyers or registered foreign lawyers practising as such as directors, members or owners of shares;

(bc) a body corporate permitted under Rule 9(1)(a) of the Solicitors’ Overseas Practice Rules;

(c) the solicitor's bona fide employee, which provision shall not permit under the cloak of employment a partnership prohibited by paragraph (6) of this rule; or

(d) the retired partner or predecessor of the solicitor or the dependants or personal representatives of a deceased partner or predecessor; or

(e) a charity (as defined in Rule 18(2)(aa) of these rules) …”

4

A new Rule 7(1A) was introduced from about March 2004, which provided an exception for a third party “fee sharer” if the purpose of the fee sharing arrangement was solely to facilitate the provision of services to a practice. It was as follows:

(1A) (Fee sharing – exception for introducing capital or providing services)

Notwithstanding paragraph (1) of this rule a solicitor may share his or her professional fees with a third party (“the fee sharer”) provided that:

(a) the purpose of the fee sharing arrangement is solely to facilitate the introduction of capital and/or the provision of services to a practice;

(b) neither the fee sharing agreement between the solicitor and a fee sharer, nor the extent of the fees the solicitor shares with fee sharers, permits any fee sharer to influence or constrain the solicitor's professional judgment in relation to the advice given to any client;

(c) the operation of the agreement does not result in a partnership prohibited by paragraph (6) of this rule;

(d) if requested by the Law Society to do so, the solicitor supplies details of all agreements between the solicitor and fee sharers and the percentage of the annual gross fees of the practice which has been paid to each fee sharer; and

(e) the fee sharing agreement does not involve a breach of the Solicitors’ Introduction and Referral Code.

‘Fee sharer’ means a person who or which shares a solicitor's fees in reliance on the exception contained in this paragraph, and the expression includes any person connected to or associated with the fee sharer.”

Background

5

Mr Boddy was a solicitor practising as a sole practitioner under the name “Peter Boddy Solicitors”. His practice was in the conduct of criminal litigation, all or most of which was publicly funded. Prior to 2002 he mostly handled work in the magistrates’ courts. In 2002, with a view to expanding his work in the Crown Court, he entered into agreements with Mr Verma, who carried on business under the name Westlaw Services, and Mr Khan. Mr Verma was, at that time, a law graduate. He has now qualified as a solicitor. Mr Khan was not legally qualified in any way. They were very successful in the pursuit of Crown Court work for the firm.

6

In their amended Particulars of Claim Westlaw and Mr Khan allege that at all material times Mr Verma and Mr Khan were “legal consultants”, and that Mr Boddy separately agreed with each of them that, in return for them assisting him with the work required for him to represent clients charged with criminal offences, he would pay them a percentage of the money received from the Legal Services Commission (“the LSC”) for representing those clients. They allege that Mr Boddy agreed to pay to Mr Verma 75 per cent of the net fee received from the LSC for the work done by him; and that he would pay Mr Khan 50 per cent of the net fee received from the LSC for the particular case in question, less VAT and disbursements; and that Mr Boddy would reimburse disbursements incurred by Mr Verma and Mr Khan in the course of their work for him once payment was received from the LSC; and that, where both Mr Verma and Mr Khan worked on the same case at Mr Boddy's request, the payment to Mr Verma was treated as a disbursement when calculating the total fee for the purpose of paying Mr Khan.

7

The amended Particulars of Claim allege that clients were introduced by Mr Verma and Mr Khan to Mr Boddy, who then acted for those clients; that they carried out “legal work” to assist Mr Boddy as requested by him, and thereby became entitled to the payment agreed with Mr Boddy. The amended Particulars of Claim allege that, to the best of the knowledge and belief of Westlaw and Mr Khan, all the cases in which Mr Verma and Mr Khan assisted Mr Boddy have been paid by the LSC, but, in breach of contract, Mr Boddy did not pay them, and Mrs Boddy has not yet paid them, the sums due pursuant to their agreements with Mr Boddy. In particular, it is alleged that Westlaw, as assignee of Mr Verma, is entitled to £207,617.20, being 75 per cent of the net sum paid in respect of hours worked by him in cases in which he assisted Mr Boddy; and that Mr Khan is entitled to £169,656.33, being 50 per cent of the gross sum of £398,692.37 paid in respect of cases in which he assisted Mr Boddy, less the VAT, disbursements and payments to Mr Verma in respect of those cases. Westlaw and Mr Khan also claim that, to the best of their knowledge and belief, the total disbursements incurred by Mr Verma and Mr Khan amount to £28,092.52, which ought to be reimbursed. Westlaw and Mr Khan claim that, by reason of breach of the agreements between Mr Verma and Mr Khan and Mr Boddy, Mr Verma and Mr Khan have suffered loss and damage in the sum of at least £378,142.80, being the total of the sums mentioned.

8

A deed of assignment dated 4 April 2008 (“the Assignment”) provided that Mr Verma:

“… formerly trading as Westlaw do assign all rights arising in respect of my contract with the late Mr Peter Boddy (Solicitor) for services performed for the late Mr Peter Boddy (Solicitor) to Westlaw Services Limited”.

The proceedings

9

Westlaw issued its claim form on 25 April 2008, as assignee of Mr Verma pursuant to the Assignment.

10

Mr Khan issued his claim form on 16 May 2008.

11

Defences were served by Mrs Boddy to both sets of proceedings.

12

By order dated 11 December 2008 the Judge ordered that the two sets of proceedings be consolidated. The amended Particulars of Claim, to which I have already referred, were served in the consolidated proceedings, purportedly replacing Westlaw, as one of the claimants in the title to the proceedings, with “Kush Verma (Trading as Westlaw Services)”. It was acknowledged by counsel for Westlaw before the Judge, as before us, that this was an error, and that Westlaw has remained one of the two claimants throughout. Further Defences were served by Mrs Boddy. A Reply was served by Westlaw, and a Reply and Defence to Counterclaim were served by Mr Khan.

13

On 28 April 2009 Mrs Boddy issued applications to strike out Westlaw's claim and to strike out or alternatively obtain summary judgment in respect of Mr Khan's claim.

14

The applications were heard by the Judge on 22 June 2009. The basis of the application in respect of Mr Khan's claim was that the agreement between him and Mr Boddy was illegal because it was in breach of Rule 7(1). So far as...

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4 cases
  • Solicitors Regulation Authority v Martyn Jeremy Day
    • United Kingdom
    • Queen's Bench Division (Administrative Court)
    • 19 October 2018
    ...The majority recorded these matters in para. 147.32 of the judgment. Accordingly, policy concerns of the kind set out in Westlaw Services Ltd v Boddy [2010] EWCA Civ 929 at [45] do not arise in the present case. 204 There is, in our judgment, no legal objection to the parties agreeing to in......
  • Litkraft Ltd v Simon Cottrell
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 3 March 2023
    ...or agree to share his or her professional fees with any person except …” made such an agreement illegal (and unenforceable — see Westlaw Service v Boddy [2010] EWCA Civ 929) save in specified circumstances. However, those rules were long since revoked, and the regulatory code for solicitor......
  • Israel Bruce Claimant v Wilwia Black-Williams Clifford Williams Defendants
    • St Vincent
    • High Court (Saint Vincent)
    • 13 July 2015
    ...is contractual, quasi contractual or 'restitutionary' appears unsettled. Etherton L.J inWestlaw Services Ltd. and another v Boddy [2010] EWCA Civ 92917 noted that 'there is considerable scope for argument'18 whether the claim for reasonable remuneration is a contractual one rather than a 'r......
  • Tse Chun Wai v Leung Kwok Kin Joseph T/a Joseph Leung & Associates
    • Hong Kong
    • High Court (Hong Kong)
    • 16 August 2017
    ...claim. 39. The other case that Mr Pang had relied on was Westlaw Services Ltd v Boddy (Solicitors Regulation Authority, Interveners) [2010] EWCA Civ 929, [2011] PNLR 4. 40. In Westlaw Services Ltd v Boddy,the plaintiff claimed against the estate of a solicitor and sole practitioner Mr Boddy......

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