Judge allows fees claim despite 'retrospectively created' client care letter

A West London firm claiming for unpaid fees has successfully argued that it was entitled to charge an hourly rate for litigation. But ruling in SZ Solicitors & ors v Bharj, His Honour Judge Monty KC also found that SZ Solicitors had ‘retrospectively created’ a client care letter in order to support its claim.

The court heard that much of the work in the underlying litigation had been done by Kiran Bharj, the daughter of the clients, who was employed under a training contract with SZ. The nature of that arrangement was also in dispute, but it appeared that Kiran Bharj had negotiated a costs settlement of £180,000 after the retainer between SZ and her parents had ended.

SZ sent a bill to the Bharjs in 2015, stating that £223,250 was still unpaid.

The court heard that the retainer had ended when SZ partner Raghwinder Siddhu met with Mr Bharj to discuss fees. He claimed that the client had become angry and aggressive, to the extent that police were called.

Siddhu denied a suggestion that the firm would prepare client care letters after the event. The judge said he treated Siddhu’s evidence with ‘some caution’ and that his answers about the failure to disclose the firm’s ledgers were unsatisfactory.

The firm’s senior fee-earner and senior managing partner Mohammed Zafar said there was no need for attendance notes in the litigation as Bharj attended the office so frequently. The judge noted there was no receipt for any transactions in the case and said it was ‘incumbent’ on solicitors to keep proper records.

The judge was concerned about how payments had been made to SZ and said Zafar’s evidence was ‘rather poor’ about the process for producing a costs bill.

The trial on unpaid fees was adjourned halfway through after it emerged that Bharj, whose first language is Punjabi, had produced a statement by drafting a handwritten note, telling his daughter what he wanted to say, for her to instruct counsel. The judge reminded the parties that the rules state witness statements by non-English speakers must be drafted in their preferred language and then translated in full.

Kiran Bharj was called as a witness and confirmed that Zafar, who was now suing her parents, was her supervising partner during her training years. She said the firm had a ‘very relaxed’ attitude to compliance and it was ‘very rare’ to come across a signed retainer letter. She recalled Zafar and Siddhu retrospectively preparing such letters ahead of Solicitors Regulation Authority inspections.

She also claimed that Zafar had told her to maximise the bill of costs by using his hourly rate where possible, even if she had done the work. The judge said this reflected ‘very badly’ on both Zafar and Kiran Bharj.

The judge accepted the defendants’ evidence that there was no client care letter and described Zafar’s explanations as ‘highly unconvincing’. But Monty said the clients had been wrong about the fixed fee agreement and said SZ was able to charge the hourly rate. He awarded recoverable costs of around £74,000 and ordered the defendants to pay £20,550 in costs.