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Scheme to under-pay court fees was an “abuse of process”

8th Jan 2016

The High Court has told a firm that it was an abuse of process to run a scheme to avoid paying the correct fees at the outset of a claim against another law firm.

Newcastle firm Robinson Murphy issued claim forms for small, invoking smaller fees, only to submit letters of claim four months later claiming much larger amounts. Only then were the full fees paid.

The 31 claims were against law firm Ward Hadaway over its knowledge of deposits paid in buy-to-let property deals. The total amount claimed was for £9m.

Sitting in the High Court, Mr John Male QC said the claimants’ solicitors “deliberately underestimated” claims at the outset, knowing they intended to amend the claim by hundreds of thousands of pounds.

Male said the claimants had deprived the court system of fees which should have been paid at the outset and also involved the court in additional work in considering and processing amended forms, and stated that their actions constituted an abuse of process.

The claimants had argued that a party is permitted to limit his claim to less than he considers its full worth, and said their behaviour was at the “acceptable conduct end” of the spectrum. Male said the opposite, noting that Robinson Murphy informed neither the defendant’s representative DAC Beachcroft nor the court what they were intending to do.

Male stated that “The claimants did not do all that was in their power to set the wheels of justice in motion,” and that “It was within the power of the claimants to conduct themselves in a manner which was not an abuse of process.”

The judge opted not to strike out the claims, but gave summary judgment for Ward Hadaway as the correct fees were not paid and the actions were statute barred.