Costs judge calls for “authoritative guidance” on applications by former clients for their files

Documents: Argument over disclosure

Authoritative guidance on whether clients can demand their full files from previous solicitors would help the Senior Courts Costs Office deal with the large number of applications it is facing, a costs judge has said.

Master Brown’s comment came in a decision in which he granted such an application, brought again by Leeds firm JG Solicitors, in the wake of recent rulings by two of his fellow judges that went the other way.

He said: “A large number of similar applications have been made in the SCCO. As I understand it, whilst many are substantially resolved by the parties, there are significant differences in approach to the issue of the court’s jurisdiction to make the orders sought.

“Although I have set out my views on this issue (at greater length than I had intended), it does seem to me that authoritative guidance on the point may assist.”

In Swain v JC & A Ltd [2018] EWHC B3 (Costs), the claimant’s personal injury action settled for £2,807, from which the solicitors deducted £891. It is the deduction that the claimant is considering whether to challenge.

The defendant firm initially sought to deal directly with their former client instead of his new solicitors, and on the day he issued proceedings, it sent him what it said was a statute bill for £2,634. This gave credit for sums already paid but asserted that a further £927 was due.

It was “substantially redacted”, with the fee-earner’s details removed, and claimed an hourly rate of £250. The after-the-event premium was £198.75.

The claim before Master Brown ultimately focused on the disclosure of four schedules referred to in the disclosed part of the conditional fee agreement, and any other documents in the firm’s client-care pack that had not been disclosed.

Master Brown said section 68 of the Solicitors Act 1974 gave the court the discretion to order the provision of copies of the documents sought, “whether or not a proprietary right in the relevant documents has been established”.

Further, “it would be appropriate in this case for that discretion to be exercised in the claimant’s favour”.

The claimant said he had never received a signed copy of the CFA, and in any case the judge said he doubted whether many clients, particularly those bringing relatively low-value personal injury claims, “would appreciate the need to retain documents they had been provided with in the course of a claim for any length of time.

“Indeed, I would expect many clients to assume that if they were to lose or mislay the papers for any reason, their solicitor would provide them copies on request.”

It was reasonable for the claimant to seek the documents “as he is at a substantial disadvantage without them”.

He added: “Section 6.4 of Practice Direction 46 provides that if any application for an assessment concerns a conditional fee agreement, a copy of that conditional fee agreement must accompany the claim form.

“Whether or not the court might issue proceedings notwithstanding a failure to append such an agreement to the claim form, the practice direction clearly acknowledges the importance of considering such an agreement in advance of an application for an assessment.

“Further, quite apart from any concern as to the reasonableness of the fees generally and the necessity of expenses claimed in the bills in this case, it seems to me that there is a particular need to consider the status of the fee-earner and the rates that were agreed for the fee-earners.”

The claimant had been told a legal executive would be handling his claim, and the judge said “the rate of £250 per hour is perhaps a rate one would normally associate with a substantially higher-grade fee-earner in a matter of significantly greater complexity and value.

“I would expect details as to the charging arrangements to be set out in the schedules to the CFA and I think it would be necessary to consider these prior to an application for an assessment in the context of a general consideration of the reasonableness of the funding arrangements and the charges.”

There was also confusion about whether a success fee was provided for, which the schedules would clear up.

Master Brown acknowledged the “substantial and legitimate concerns about the proportionality of costs incurred in applications of this sort, and as to the prospect that allowing the production of copies of documents might encourage ‘satellite’ litigation”.

But he said: “In this case the costs that would be at stake on an application for assessment are potentially significant in proportion to the damages received such that the matter is likely to be of importance to the claimant, particularly given the recent demand for payment by the defendant.

“Indeed I do not think that these two concerns should weigh against making an order which I otherwise consider to be correct; if the sums involved are modest in proportion to the costs that would be incurred in pursuing a section 70 assessment, that might be said to be a factor which weighs in favour of giving the disclosure sought now, not against.

“Further, if the exercise of providing copies or inspection of documents is at the claimant’s expense this should deter frivolous requests; the costs involved in this application will reflect the issues arising, including issues as to proprietary interests, and thus may be higher than might otherwise be the case.

“In addition, the ‘one fifth rule’ is statutory protection against frivolous or unsubstantiated applications for assessment. Moreover, in the spirit of CPR 31.16, there is, it seems to me, at least a reasonable basis for thinking that transparency will improve the prospect that any dispute as to the defendant’s costs can be resolved without the need for the court’s further intervention.”