The Court of Appeal has overturned a judge’s self-confessed ‘draconian’ decision to reject a firm’s costs bill on the basis of alleged fraud.
Lord Justice Vos (pictured) said the costs claim from south London firm Alpha Rocks Solicitors in Alpha Rocks Solicitors v Alade was wrongly struck out after its clients insisted the figures were exaggerated.
The firm had put in a bill for £131,514 in costs for one case which took 115 hours to prepare – including 107.5 hours on perusing and preparing trial bundles.
Mr Kevin Prosser QC, sitting as a deputy judge of the Chancery Division, ruled last December that the figures provided for hours spent were ‘simply false’.
In another case, Prosser concluded a costs bill for £43,732 was ‘drawn up knowing it to be inaccurate in a number of respects’.
Prosser struck out claims for fees in both cases and said Alpha Rocks should pay 75% of the client’s costs of bringing the strike-out claim.
Prosser acknowledged his ruling was ‘draconian’ but said the ‘abuses’ identified had been a ‘serious misuse of the court’s procedure’.
But the firm contested Prosser's ruling on the basis of an abuse of process, arguing that Prosser had conducted a ‘mini-trial’ and that his order was disproportionate.
The billed client, Benjamin Alade, insisted the order was proportionate and that ‘massive court resources’ would be required to resolve what, if anything, was due.
Vos ruled that, in general, litigants should not be deprived of their claims unless the abuse relied upon has been clearly established.
He said that in this case that Prosser ‘forgot his own repeated warnings to himself about not conducting a mini-trial and about the draconian nature of what he was contemplating doing’.
Whatever the merits of the case against the solicitors, he said it was not appropriate to say that the larger bill was fraudulently exaggerated without directing cross-examination.
‘I do not think the judge can properly have been satisfied that the solicitors were guilty of misconduct in relation to these proceedings which was so serious that it was an affront to the court to permit them to continue to prosecute their claims.’
He invited the law firm to reduce the bills if it wanted to and, if it refuses, the basis of the claims will be heard in the courts in the standard way.