A Leeds firm denied the costs of personal injury work on the basis it had misled the defendant has been told it cannot challenge the court’s decision. 

The Supreme Court this month confirmed it had refused permission to appeal the ruling in GSD Law Ltd v Wardman & Ors, which had seen a district judge find costs had been unjustifiably inflated. 

The UK’s highest court said the appeal was refused ‘because the application does not raise an arguable point of law of general public importance which ought to be considered at this time bearing in mind that the case has already been subject of judicial decision and reviewed on appeal’. 

The decision was made by Lord Kerr, Lord Lloyd-Jones and Lord Briggs. 

Refusal to allow the appeal could now embolden defendants in personal injury cases to pursue challenges against costs claims where they suspect the figures have been unfairly increased. 

In the original ruling from 2014, District Judge Neaves, sitting at Leeds County Court, had described evidence from the firm’s sole principal Kirna Madhas as ‘not only evasive and inconsistent, but dishonest’ and upheld a number of allegations of misconduct. 

Last year, Lord Justice Newey agreed the court should entertain the application to disallow costs and said the procedure was not unfair. 

The paying parties’ insurer, Allianz, said hourly rates had been inflated and it had been misled as to the status of the people carrying out the work, with senior lawyers’ rates applied to junior fee earners’ work. 

Lawyers for GSD argued that the proper procedure was for Allianz to advance a complaint, founded on allegedly dishonest costs claims, through an ordinary civil action. 

Following last year’s Court of Appeal ruling, the firm said judges had given no clear guidance as to how to deal with misconduct allegations in the context of costs. 

Its statement added: ‘This case raised important matters of principle relating to the costs regime and to the administration of justice as recognised by the lower court. Unfortunately the appeal judges did not take that opportunity and did not give that clear guidance. They were not prepared to look beyond the issues in this case.  

’In the current political costs climate and the might of the resourceful paying parties, it is only a question of time before the same issues will soon come before the appellate courts.’