News focus: End ‘fishing expeditions’ on fees

In the aftermath of its victory against costs chasers checkmylegalfees.com last week, national firm Slater and Gordon asked for what it called these ‘fishing expeditions’ to stop.

To use a well-worn phrase, they have two hopes: no hope and Bob Hope. Personal injury firms may well have celebrated winning this battle, but the war, it would appear, is far from over.

Victory for Slater and Gordon in Raubenheimer last week was straightforward: the claimant, a former client, had sought via a Part 18 request to compel the firm to answer questions about any undisclosed commissions or other financial rewards received from deductions from his compensation. The client had effectively paid £254 from his damages for an ATE premium, but when his insurer went bust, administrators appeared to confirm that a payment had been made to a subsidiary of Slater and Gordon.

The ruling of costs judge Rowley was that he did not have jurisdiction to compel Slater and Gordon to answer any Part 18 questions, and there was ‘simply no room’ for the court in a Solicitors Act assessment to consider the composition of an insurance premium.

Costs recovery firms are unbowed. Mark Carlisle, founder of checkmylegalfees.com, said: ‘These claims will now be pursued in any event. It is merely a question of forum, and one way or another Slater and Gordon will, as Master Rowley has indicated, need to explain why Elite’s administrators are wrong to say that Elite were paying a substantial portion of the “premium” over to a Slater and Gordon subsidiary.’

Looking at wider issues, the judge said the claimant appeared to have ‘sufficient evidence’ with which to bring separate proceedings and which would require Slater and Gordon to set out its case why the claim was wrong.

He added: ‘Having not answered the question in these proceedings, it is difficult to see that a claimant would be criticised for bringing other proceedings even if there is a cast-iron answer to the claimant’s challenge. As such, the claimant might be proceeding in a costs free environment at least until the defendant had placed its cards on the table.’

Slater and Gordon, which is estimated to have spent more than £20,000 defending this case alone, has called for the barrage of claims from former clients to stop. With Raubenheimer thought to be one of 140 cases for claimants represented by checkmylegalfees.com, this is unlikely.

A sign of the firm’s exasperation with this campaign came in the lengthy statement released following Rowley’s ruling, which dealt not just with the ATE issue but the wider point of past clients being encouraged to sue.

A spokesperson for the firm said: ‘Our primary concern in these cases [is] our former clients – those who are now being targeted (without any basis) by claims recovery firms. These individuals, who are often vulnerable and whom we have supported through a difficult period of their lives, should not have to go through this unnecessarily adversarial and costly process.

‘We have complete confidence in our retainers and our customers are at the centre of everything we do. As a business we are focused on providing clients with the best service possible, which includes being fair, clear and open about our fees.’

Slater and Gordon added that the Part 18 application had no merit and was ‘a fishing expedition’.

Is it the end for these claims? Hardly. If anything, Rowley’s judgment has merely convinced such costs recovery outfits that they are on to something.

Ultimately, this application was a bit of a side issue compared to the main event, which is Belsner v CAM Legal Services. That case, where the High Court ruled that a former PI client had not given informed consent to the deduction from her damages, is going before the Court of Appeal next year. Mr Justice Lavender ruled last October that a solicitor should not only have a written agreement but must also show that their client gave informed consent and that ‘sufficient disclosure’ was made.

The outcome of the appeal could either kill off this burgeoning industry of clawing back costs, or breath new life into it. All those involved in Raubenheimer will dust themselves down and prepare for a bigger fight – one that will surely be the defining moment in this increasingly bitter battle.