The High Court has issued a second judgment in quick succession around file disclosure in a bid to stem the flow of satellite litigation against law firms.
Senior Courts Costs Office judge Master Jennifer James said the courts were seeing an increasing number of former clients coming back to their firms to query historic bills.
The problem stems from 2013 when reforms authorised the deduction of costs to a maximum of 25% of the damages recovered and the development of new business models by solicitor firms.
James said claimants who were previously represented under a conditional fee agreement had seen their damages ‘depleted’ and are now taking issue with deductions, in some cases encouraged by legal advice that they may have a case.
The costs court last month ruled that former clients of a Liverpool firm could not gain access to copies of documents on their file in order to establish whether they could challenge a costs bill.
This time, in Hanley v JC & A Solicitors Limited, Master James refused an attempt at forcing disclosure from a firm to challenge a bill issued two years after the first one. Represented now by Leeds firm JG Solicitors Limited, the claimant sought delivery of copies of some parts of the files over which he did not have proprietary rights. Hanley had settled for £3,500 in general damages for a road traffic accident, out of which north west firm JC & A Solicitors had deducted £1,086.
In her ruling, Master James said she was ‘concerned by the floodgates that would likely be opened’ by a ruling that solicitors can be ordered to hand over their complete file. ‘Such a move would foreseeably instil considerable satellite litigation and I am not persuaded that this would be a positive step,’ she added. ’I am not persuaded that I should order production of documents that do not belong to the claimant.’
Master James said both the defendant law firm and Hanley had pitched their projected costs of disclosure ‘unrealistically’ low and high. The former client offered to compensate JC & A Solicitors at 25p per sheet copied, while the firm suggested four hours of Grade C time at £161 to go through the file.
Hanley’s lawyers argued for a change in the status quo and said in the days of paperless offices there was no practical reason why files could not be copied.
JC & A Solicitors said any suggestion the claimant was being ‘kept out’ of his right to an assessment was wrong, and he had left with his damages and ‘without a backward glance’ at costs. It was only, the firm argued, when Hanley was contacted as part of a ‘marketing push’ by JG Solicitors that he became concerned at what had happened.
This article was amended at 1100 on 4 January to correct the gender of Costs Master James.