The High Court has effectively halted an acrimonious dispute between law firms amid accusations of sham acquisitions and dishonest conduct.
His Honour Judge Cawson KC, sitting in JMW Solicitors LLP & Ors v Injury Lawyers 4U Limited & Ors, ruled in favour of the defendants last year but gave permission to the claimants to apply to amend their case. However following a two-day hearing in March, the judge has now ruled that the application should be refused. The judge granted summary judgment for the defendants, who included Express Solicitors directors James Maxey and Daniel Slade.
The dispute arose when founding shareholders of a claims management venture, claimant firms JMW, Ralli Limited and Howe & Co Solicitors, objected to the service charge on newer shareholders for a slot for the allocation of cases managed by Injury Lawyers 4U. (Howe & Co had discontinued the claim). The original members had paid £10,000 for a certain number of slots whereas later members, including Express Solicitors), paid £15,000. However the price differential was removed in 2023.
Injury Lawyers 4U had been set up by partners of personal injury firm Amelans in 2002, which was bought by Express Solicitors in 2023.
In their proposed amendments, the claimants sought to challenge the removal of the slot price differential on a number of grounds. It was alleged that the appointment of Maxey and Slade as partners of Amelans was a sham and of no effect. The judge ruled this allegation was ‘founded simply on assertion and micawberism rather than reality’, and the pleadings fell well short of demonstrating that a case of sham stood any real prospect of success.
The judge said an allegation of sham was a serious matter as it involved a degree of dishonesty, but he concluded the facts pleaded were insufficient to show dishonesty or other bad faith conduct.
The fact that Express stood to benefit from removing the slot price differential, and there might have been a conflict of interest between Maxey and Slade’s position as directors of Express and Injury Lawyers 4U, did not in itself mean they acted in a commercially unacceptable way.
The judge added: ‘No facts are pleaded in support of this assertion supporting a case of dishonesty or of commercially unacceptable behaviour falling short of dishonesty, other than the fact of the conflict of interest and the fact that Express stood to benefit. However, this cannot, as I see it, be enough.
‘In the absence of properly reasoned criticism of the commercial rationale provided as to the benefits of removing the slot price differential, it is, as I see it, impossible to conclude that a case of bad faith involving commercially unacceptable behaviour on the part of Mr Maxey and Mr Slade stands any real prospect of success.’
No comments yet