Claims firm referred to SRA after costs cut by 99%

A judge has ordered that a firm be referred to the SRA after 99% of the costs it had claimed for were disallowed.

Deputy District Judge Harrison, sitting in Chelmsford County Court (pictured), said claimed costs of £14,000 by Manchester firm Optimal Solicitors should be reduced to just £68 for its work on a personal injury claim. The firm’s former client and paying party, Dariusz Glab, had challenged certain elements of the bill prepared by Optimal after he entered into a conditional fee agreement for his claim. 

In a draft order seen by the Gazette, Harrison said the 100% success fee charged by the firm was ‘troubling’ and the hourly rate of £400 per hour for both Grade A and Grade D fee earners was ‘unrecoverable as it was unusual in amount’. Profit costs were reduced by 99% as the firm ‘had failed to perform its retainer appropriately’.

Optimal was also ordered to pay the client’s costs of the assessment proceedings assessed on the indemnity basis for £9,440.

The judge ordered that a transcript of last month’s hearing be produced and sent to the SRA, along with a letter from the firm explaining what had happened and a copy of the unassessed bill of costs.

The Gazettte has attempted to contact Optimal for comment but has yet to receive a response.

Costs firm Kain Knight, which represented Glab in the dispute, posted details of the outcome on its website along with commentary of the case.

Alistair Merchant, senior costs lawyer at Kain Knight, said it was ‘clear’ that Optimal had costed the case with ‘significant errors’, including the 100% success fee and the £400 hourly rates for ‘underqualified’ fee earners. Barrister Daniel Laking, of 39 Essex Chambers, said there had been a ‘litany of mishaps’ which caused the bill to be reduced by so much.

Kain Knight said Glab had been given no information and had not consented to the amounts being incurred.

It said: ‘There was nothing in the CFA that explained the rates charged as against the experience of those charging them. Had [Glab] had it explained to him that he was being charged £400ph for an unqualified fee earner, he would not have agreed.’