A costs judge has criticised the spending of more than £28,000 trying to secure documents to challenge the recovery of an after-the-event insurance premium worth less than £400.
The former client of personal injury firm Nicholson Jones Sutton Solicitors had sought details of communications with the insurer and a third party over potential commissions that might have been paid. They also wanted recordings of telephone calls concerning their initial claim as well as financial records.
The application followed directions from the Sheffield District Registry in 2020 for disclosure of the firm’s full file of papers. The claimant challenging the payment of the ATE premium said these directions had not been complied with.
But ruling in Bendriss v Nicholson Jones Sutton Solicitors Ltd, Costs Judge Rowley said the claimant’s entitlement to receive documents depended on whether they were kept on file. ‘I do not think realistically that any firm of solicitors would keep the sort of accounting and regulatory records sought by the claimant in their file of papers,’ said Rowley.
The court heard that the claimant’s schedule of costs for the application came to £28,535. The defendant’s comparable costs were for less than £5,500. The claimant had been represented by AH Christie LLP, trading as checkmylegalfees.com.
Asked to explain whether such a sum was proportionate, claimant counsel Roger Mallalieu KC said there had been a lack of alternative options. He pointed out the use of the Legal Ombudsman scheme, as suggested by master of the rolls Sir Geoffrey Vos in another costs challenge case, was not always possible.
Rowley also accepted the point that the ‘disclosure hare was set running’ by the firm stating in its initial response that an insurance intermediary ‘may well have received a commission’. The intermediary and the firm of solicitors had ‘common owners’, the court heard.
Mallalieu submitted that, in the absence of the disclosure sought, the claimant was left with the ‘unpalatable choice’ of giving up on the commission challenge or accruing costs which appeared to be disproportionate.
Rowley said the size of the sum being challenged ‘must have an impact on how unpalatable the choice before her might be’. He added: ‘It is difficult to see how the claimant here could have thought it appropriate to instruct her solicitors to spend the sums incurred in this application over a premium of this size.’
Rowley said the claimant already had an indication that a commission was ‘probably paid’ and added that an argument could be made on that basis about whether fiduciary duties were breached. This could be dealt with separately, and for now he dismissed the claimant’s specific applications for disclosure of ATE documents and call meeting logs.
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