The High Court has told a firm it was an abuse of process to run a scheme to avoid paying the correct fees at the outset of the claim against another law firm.
Newcastle firm Robinson Murphy issued claim forms for small claims - and therefore invoking smaller fees - only to submit letters of claim four months later claiming much larger amounts. Only then were the full fees paid.
The 31 claims were against law firm Ward Hadaway over its knowledge of deposits paid in buy-to-let property deals. The total amount claimed was for £9m.
Sitting in the High Court (Chancery Division), Mr John Male QC (pictured) said the claimants’ solicitors ‘deliberately underestimated’ claims at the outset knowing they intended to amend the claim by hundreds of thousands of pounds.
Male said the claimants had deprived the court system of fees which should have been paid at the outset and also involved the court in additional work in considering and processing amended forms. He explained this ‘dance’ constituted an abuse of process.
‘There is a public interest in claimants not behaving in this way in that they should pay the fees due for their claim at the time of issuing their claim,’ said Male in Lewis & Ors v Ward Hadaway.
‘If I was to condone Robinson Murphy’s conduct then their system would very likely be adopted by other claimants and their solicitors to the detriment of the flow of court fees.’
The claimants had argued that a party is permitted to limit his claim to less than he considers its full worth – for example if there was no disbursement funding in place to pay a larger fee.
They said their behaviour was at the ‘acceptable conduct end’ of the spectrum, but Male said the opposite, noting that Robinson Murphy informed neither the defendant’s representative DAC Beachcroft nor the court what they were intending to do.
‘The claimants did not do all that was in their power to set the wheels of justice in motion,’ added Male.
‘It was within the power of the claimants to conduct themselves in a manner which was not an abuse of process.’
The judge opted not to strike out the claims but gave summary judgment for Ward Hadaway because the correct fees were not paid and the actions were statute barred.