The £55 court fee that should have been £10,000

Fee: Court office was wrong

The fee to bring an unlimited additional claim should be £10,000, rather than the £55 the court office had advised one of the parties in bitter litigation involving two law firms, a judge has ruled.

His Honour Judge Pearce, sitting in the Business & Property Court in Manchester, was also highly critical of the conduct of the law firms in the litigation, including their “poor attention to procedural requirement”.

Walayat & Ors v Berkeley Solicitors Ltd [2021] EWHC 227 (Ch) arose from the claimants, who were at one time clients of the defendant law firm – trading as HST Solicitors and/or Truman Law Solicitors – transferring their business to the fourth party, Forseti Law.

Berkeley says those transfers involved breaches of the claimants’ contracts with it, that it was entitled to recover outstanding fees out of damages recovered by Forseti on behalf of the claimants; and that it has suffered loss as a result of the unlawful acts of former Berkeley director Mohammed Rafaqat Lal and Forseti director Shamikh Mohammed Mustasum in diverting the business to Forseti.

The hearing dealt with whether Berkeley paid the right court fee, £55, in issuing additional claims against Forseti and Mr Mustasum which did not state a limit to their value.

The firm was told by the court office that this was the fee in line with paragraph 1.6 of schedule 1 of the Civil Proceedings Fees Order 2008.

This says that, on filing proceedings against a party or parties not named in the proceedings, the fee is £55. The schedule goes on to state: “Fee 1.6 is payable by a defendant who adds or substitutes a party or parties to the proceedings or by a claimant who adds or substitutes a defendant or defendants.”

Rule 20 provides that an additional claim such as this is to be treated as a claim for the purposes of the CPR, HHJ Pearce held.

He said paragraph 1.6 was aimed at a different situation to what was happening here, namely where a new party was joined without new causes of action and/or claims being introduced, the position typically covered by an application under CPR 19.4.

“This would be consistent with the statement in the schedule that such fee is ‘payable by a defendant who adds or substitutes a party or parties to the proceedings or by a claimant who adds or substitutes a defendant or defendants’,” he said.

This would cover instances such as substituting personal representatives on the death of a party, the addition of a party who is argued to be liable in the same way as an existing party, or the substitution of a different party because a mistake had been made as to the identity of the party originally sued.

In such narrow circumstances, it was “easy to understand” why a lesser fee was charged.

HHJ Pearce continued: “In comparison, an additional claim almost by definition requires the court to look at new issues, just as a new counterclaim does.”

This meant the correct fee payable was that set out in paragraph 1.1 of the schedule, which says that on starting proceedings, where the sun claimed exceeds £200,000 or is not limited, the fee is £10,000.

He ordered Berkeley Solicitors to pay this as a condition of continuing to pursue the additional claims.

More broadly the judge said the litigation “has been conducted with extreme ill temper, poor attention to procedural requirements and an apparent desire to complicate rather than simplify the issues”.

He added: “I am unclear as to the extent to which the claimants truly have a financial interest in the outcome of this litigation.

“I suspect that, as claimants for damages for personal injuries who approached solicitors through a claims management company, they are at best bemused and at worst horrified by the fact that they have become embroiled in this dispute between solicitors.”

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