Robinson v EMW Law LLP, Court of Appeal - Chancery Division, July 10, 2018, [2018] EWHC 1757 (Ch)

Resolution Date:July 10, 2018
Issuing Organization:Chancery Division
Actores:Robinson v EMW Law LLP
 
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Neutral Citation Number: [2018] EWHC 1757 (Ch)

Case No: CH-2017-000210

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

ON APPEAL FROM MASTER JAMES IN THE SENIOR COSTS OFFICE

Rolls Building, 7 Rolls Buildings

Fetter Lane, London EC4A 1NL

Date: 10/07/2018

Before :

MR JUSTICE ROTH

with MASTER HAWORTH sitting as an Assessor

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Between :

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Joshua Munro (instructed by Fidelity Law Ltd) for the Appellant

Shaman Kapoor (instructed by EMW Law LLP) for the Respondent

Hearing date: 11 June 2018

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Mr Justice Roth :

Introduction

  1. This is an appeal, with permission granted by Marcus Smith J, from the decision of Master James of 25 May 2017 ruling on preliminary issues in a detailed costs assessment, whereby she held that all costs for work done by Fidelity Law Ltd (``Fidelity'') for the Appellant, Mr Robinson, were disallowed save for those after 1 May 2015, and all costs for work done by Mr Robinson as a solicitor in his own cause were disallowed. I heard the appeal with the benefit of Master Haworth as an Assessor, although the decision is mine alone.

  2. The background to this matter concerns proceedings before the High Court in bankruptcy, commenced by Mr Robinson against EMW Law LLP (``EMWL''). EMWL are a firm of solicitors in which Mr Robinson was previously a partner. Those proceedings were started following a letter to Mr Robinson from EMWL dated 7 October 2014 demanding payment of a little over £85,000 plus interest on the basis that he was in breach of an Individual Voluntary Arrangement entered into with EMWL and other creditors, and threatening bankruptcy proceedings against him. On 17 October 2014, Mr Robinson obtained an interim injunction against EMWL restraining the presentation of a bankruptcy petition. The proceedings were finally settled by a consent order dated 21 May 2015, whereby the interim injunction was made permanent, Mr Robinson was released from the cross-undertakings he gave upon obtaining the interim injunction, and EMWL were ordered to pay 80% of Mr Robinson's costs. It is those costs which are the subject of the assessment.

  3. It is not disputed that Fidelity were on the record and acted as solicitors for Mr Robinson in conducting those proceedings, and indeed for the purpose of obtaining the injunction they instructed Counsel who appeared on his behalf. It is also not disputed that Mr Robinson remains in practice as a solicitor and has throughout the relevant time acted as a consultant to Fidelity, and that he did a considerable amount of work, but not all the work, in his own case.

    The costs proceedings

  4. The costs proceedings below have a singularly unfortunate history. The case was initially placed in the so-called `block' or `group' list, intended for simpler costs disputes that would be concluded in less than a day, and came on before Master James on that basis on 6 June 2016. As a result, the costs judge had not had an opportunity to pre-read the papers. When it became evident that the matter could not be concluded that day, the preliminary points concerning the existence of a retainer, the application of the indemnity principle and the right to charge for Mr Robinson's time, were adjourned on the basis that Master James would read through the file to see whether it was clear that there was an agreement between Fidelity and Mr Robinson that they would not charge for his case, and that if she remained unclear as to the position she would direct further evidence and a further hearing.

  5. There was then a delay until 2 February 2017, when Master James wrote a very full email to both sides, explaining that she had been through the file and found nothing in writing to suggest that there was ever an agreement that Mr Robinson would not be charged for the work done on his behalf, or that he was working for no fee. She said that she was inclined to the view that it was not contrary to the indemnity principle for Fidelity to charge for the time spent by the partner in the firm, but that she was in some doubt whether the charge set out in the Bill of Costs for Mr Robinson's own time was recoverable prior to a retainer letter of 1 May 2015 (and thus virtually all his time prior to the Consent Order). However, Master James emphasised that this was only a provisional view, and stated:

    ``I appreciate this letter is couched in somewhat equivocal terms and that is for one very good reason; given the length of time since the previous Hearing, I wish to give the parties the opportunity to make further brief submissions before I finally rule upon these points and move on with the remainder of the Assessment. That can be done in writing, if they wish me to conclude the Assessment on paper, or at the beginning of the further Hearing date if they wish to continue at a live Hearing.''

  6. The parties understandably did wish to make further submissions, and on 11 May 2017 Master James made an order directing that final written submissions should be filed by 19 May 2017, ``in order for the court then to give Judgment on the preliminary issue by 23 May 2017''; and further that in the light of that the adjourned detailed assessment would continue on 25 May.

  7. Both parties duly filed written submissions but by error the submissions on behalf of Mr Robinson were not brought to the attention of the costs judge. She proceeded to deliver a reasoned written judgment on 23 May 2017, unaware of the submissions filed for Mr Robinson. As a result, when the hearing resumed on 25 May 2017, Master James recognised that her judgment could not stand and gave both sides the opportunity to make oral submissions. Counsel for both sides then presented oral argument, following which the costs judge gave a short, unreserved judgment. It is accordingly that judgment which is challenged on this appeal, although for EMWL it is submitted that this judgment should be considered in the light of the written judgment issued two days before.

    The factual background

  8. Mr Robinson instructed Fidelity to act for him following receipt of the letter from EMWL dated 7 October 2014. On 9 October 2014, Mr Richard Brown, the director of Fidelity, emailed Mr Robinson about the case and stated: ``... we need to agree a way of funding this work....'' However, no specific agreement was then entered into. Only at the start of May, 2015, after the matter had been listed for trial (due to take place in October 2015), did Mr Brown and Mr Robinson turn their minds to the terms of Mr Robinson's engagement of Fidelity.

  9. On 1 May 2015, after the parties had held one `without prejudice' meeting to discuss potential settlement and were considering another, Mr Brown sent an email to Mr Robinson, which included the following:

    ``In terms of the costs:

    a. I think we can say (if there is a meeting) that we have operated to date on my standard ts and cs, of which you are of course aware. However, I attach a draft engagement letter which I think we should finalise. As indicated yesterday, I don't think that we need to make express reference to your time in this, but would be grateful for your thoughts.

    b. Obviously, we are only going to provide costs information if they have agreed in principle to make a contribution towards the costs and, even if I had a `print out', I would not provide this to them.

    c. I have spoken briefly to a costs lawyer about the claim for your time. She agreed that, absent the consultancy agreement, these would not be recoverable but, as you are a consultant she would not be embarrassed to claim them - but could not say whether they would be recovered....''

  10. Mr Robinson responded, saying:

    ``I've made some suggestions on the client care letter, as attached. From the date it is obvious that we have done this specially, so we may as well draft it so as to address the points that have been raised. I know we discussed fees and rates, and I thought there was at least one email, but I couldn't find it. Do you have an email or file note? ...''

  11. No earlier email or file note was discovered, so the position is that the first written agreement was the letter dated 1 May 2015, of which the final form reads in material part as follows:

    ``Dear Chris

    Confirmation of Instructions

    EMW

    Thank you for instructing Fidelity Law on this matter. I will be dealing with this matter...

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