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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10915
Experience:  Solicitor with 5+ years experience
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I was involved in some very serious litigation which involved

Customer Question

I was involved in some very serious litigation which involved me being subject to a worldwide freezing order. The Claimants also successfully applied for my wife to be joined into the proceedings as a Chabra Defendant. I instructed Firm (a) to act on my behalf and they agreed to do so knowing I didn't have access to my funds because of the freezing order. Similarly they acted for my wife to resist the application to join her into the proceedings as a chabra defendant. Firm (a) also acted for a number of offshore companies in which various members of my family were discretionary beneficiaries. A few months later I wasn't happy with Firm (a) so transferred to Firm (b). The offshore companies continued having Firm (a) represent them and my wife didn't feel she needed to transfer anywhere because her role as a Chabra Defendant was, by definition, a passive one. the new firm I instructed, Firm (b), subsequently worked alongside Firm (a) to bring all parties to the table to mediate and ultimately a "without prejudice" settlement was achieved. Both firms understood my financial position and were happy to act on the basis that they would have to wait to get paid their fees. At mediation they also knew, and indeed recommended, settlement terms which would leave me with insufficient funds to pay the lawyers fees but both said they would not be beating my door down etc etc. I took their advice and settled the claim on a WP basis. Now 18 months later I am being pursued by another creditor whose claim I am resisting but it is a large amount. They have issued a Stat Demand and I am thinking I should apply to set it aside. However I am now also being chased by both Firm (a) and Firm (b) for their outstanding fees, despite them promising they would not be knocking my door down. I do not have sufficient funds available to meet all these liabilities and I'm about to take insolvency advice with a view to entering an IVA or bankruptcy. I'm resigned to having to go down that path but Firm (a), who I have told of my predicament, have said that not only do they believe I woe their fees for before I sacked them and moved to Firm (b) but also for the fees incurred after that until the case settled (they increased by 300% after I sacked them)because they continued to act for the offshore companies which various members of my family held a discretionary beneficial interest in. That in itself doesn't affect me much but the key issue for me now is that Firm (a) say that if I don't settle their fees with a reasonable offer then they would go after my wife. I have pointed out they only ever acted for my wife at the application hearing to join her as a Chabra defendant and they have had no contact with her since re the main litigation. They argue that we are jointly and severally liable for their fees despite us never having signed anything to agree to such a joint and several liability. I sacked them because I felt they were incompetent and my wife didn't feel the need to sack them because they weren't doing anything for her, i.e. her role as a chakra defendant was a passive one, so she was never involved in the main litigation. I therefore seek an opinion as to whether Firm (a) could realistically stake any claim for costs against my wife even though she never signed a client retainer letter for anything beyond Firm (a) representing her for the Chabra Application where the estimated fees were circa £15k, which she's happy to pay. Firm (a) have never provided updated advice on costs accruing and it's now 18 months since the settlement was reached and they still haven't submitted a formal bill because they don't want the vat liability. I feel they are using the threat of going after my wife as a stick to beat me with and don't believe they would have any grounds whatsoever to pursue my wife but before I start challenging them and deciding upon the best form of insolvency arrangement for myself I would like some advice on whether or not my wife would still be exposed to such a claim (which runs to a sum just in excess of £1m). I thought law firms had to adhere to strict guidelines to claim their costs, including outlining what these were likely to be from the onset, ongoing updates of costs accrued and agreement as to how such costs might be paid. My wife has never received any of these beyond the fees relating to the Chabra application. Firm (a) will not be able to produce any records of letters or calls to my wife after that application hearing as they simply don't exist. I can't afford to go and see a lawyer to get advice hence this approach to you. I hope you can provide some guidance
Submitted: 8 months ago.
Category: Law
Expert:  Ash replied 8 months ago.

Hello my name is ***** ***** I will help you.

What is the nature of the proceedings generally, ie the substantive claim?
Alex

Customer: replied 8 months ago.
The substantive claim was a high value claim in the High Court brought on behalf of the receiver of a fund which collapsed in the Cayman Islands for which I was the CEO of the Investment Management Company. They made allegations of fraud amongst many other allegations but as I have outlined earlier, those proceedings have been "settled" on a Without Prejudice and confidential basis
Expert:  Ash replied 8 months ago.

Ok - I assume this is a UK law question?

Customer: replied 8 months ago.
Expert:  Ash replied 8 months ago.

Did you sign any terms and conditions with A ? Did your wife sign conditions with A? Was anything signed to say you would be liable for wife's fees?

Customer: replied 8 months ago.
Firm (a) acted for me on a couple of different matters before the litigation I referred to and so I'm unsure that I ever signed a retainer letter specifically for that, though I may have done. I have no copy records so it's difficult to be precise. I never signed anything to agree to be liable for my wifes fees. That's not really what I'm concerned about to be honest. My main concern is for my wife and to be sure she can't be pursued by Firm (a) in the event of me going into some form of insolvency arrangement . She never signed anything with Firm (a) to act for her in any capacity other than for the application to join her as a Chabra Defendant, nor has she ever signed anything to say she would agree to pay my fees.
Customer: replied 8 months ago.
Firm (a) also seem to be relying on the fact that my wife was a "Discretionary Beneficiary" of the offshore companies which Firm (a) continued to act for and therefore they were acting in her interests. Again my wife never agreed to this and those offshore companies, managed by a Professional Services UK based Services company, gave direct instructions to Firm (a) and retained Firm (a) independently from my wife or myself.
Expert:  Ash replied 8 months ago.

Ok - unless there is anything to the contrary then she would NOT be joint and severally liable for your debt. This would be highly unusual in any event and could be subject to challenge on a term for fairness. I cant see how they make the link for the offshore company because YOU instructed them.

So no, I dont think your wife is liable.

But given the value of the debt I would consider an IVA or bankruptcy.

Can I clarify anything for you about this today please?
Alex

Customer: replied 8 months ago.
ok thanks for the opinion. Am I correct in believing that in order for a solicitors firm to pursue a claim for costs against a client they would need to produce evidence of the following:-
1. A signed Client Retainer letter outlining specifically the scope of the firms engagement and estimated costs
2. Evidence that the firm have regularly updated the client as to the costs accrued and if in excess of the original estimate that the firm have sought confirmation of agreement from the client
3. Evidence of how the firm and client have agreed how costs would be paid
4. submission of the bill of costs within a reasonable time (Firm a still haven't formally submitted a bill because they don't want to trigger a VAT liability, and it's now 18 months since the case settled - is this a reasonable time ?)
5. Evidence that my wife has formally agreed to pay any part of my fees or those of the offshore companiesIf they did pursue a costs claim against my wife I believe I could provide evidence that they have only chosen to do so because I'm about to go into an insolvency arrangement and they want their fees from elsewhere. Does this demonstrate bad conduct on their part which could be subject to a formal complaint by myself and/or my wife to the SRA
Expert:  Ash replied 8 months ago.

Correct. It could be subject to the SRA AND Legal Ombudsman - http://www.legalombudsman.org.uk/

Does that clarify?
Alex

Customer: replied 8 months ago.
when you refer to the SRA and Legal Ombudsman are you relating to the issue of costs or the potential complaint of misconduct or both ?
Expert:  Ash replied 8 months ago.

Both. Any costs can be referred to the Court for assessment anyway.

Does that clarify?
Alex

Customer: replied 8 months ago.
ok thanks. One final question. I have looked on google but struggling to find anything that provides clear guidance on what a solicitor "must" provide to their clients re costs information or in order to legitimise the retainer. Can you point me in any direction on this just so that I can refer to it if Firm (a) start getting heavy-handed
Expert:  Ash replied 8 months ago.

Yes its under the SRA rules in code of conduct.

http://www.sra.org.uk/solicitors/handbook/code/part2/rule1/content.page

Does that clarify?
Alex

Customer: replied 7 months ago.
Hi Alex, following on from the above I just want to clarify one of your replies which reads as follows:- 'Ok - unless there is anything to the contrary then she would NOT be joint and severally liable for your debt. This would be highly unusual in any event and could be subject to challenge on a term for fairness. I cant see how they make the link for the offshore company because YOU instructed them.So no, I dont think your wife is liable.But given the value of the debt I would consider an IVA or bankruptcy.Can you clarify that you are suggesting that I consider an IVA or bankruptcy or my wife or both. It would be strange if you were suggesting my wife if your advice is, as you suggest, that she cannot be liable for the debt ?
Expert:  Ash replied 7 months ago.

Yes, you consider IVA or bankruptcy, NOT our wife.

Does that clarify? Alex

Expert:  Ash replied 7 months ago.

If I could invite you to rate my answer before you go today please, otherwise the site does not credit me for the time spent with you today. Thanks and good luck. Alex

Ash, Solicitor
Category: Law
Satisfied Customers: 10915
Experience: Solicitor with 5+ years experience
Ash and other Law Specialists are ready to help you
Customer: replied 4 months ago.
Hi Ash, you mentioned in your answer above that I should consider an IVA or bankruptcy. I just thought I would update you and also ask a follow-up question. I was served with a bankruptcy petition last week by a Process Server outside the flat I have been staying at in Kendal. The hearing has been scheduled for the 14th October 2016.I am still undecided about whether to go to the trouble of an IVA but have a question for you in this regard. I have read through a brochure issued by “The Insolvency service” called a “Guide To Bankruptcy”. Within that document at Section 4 on Page 6 it details “Where is the Bankruptcy Oder Made”. The 2nd para of that section states clearly that :-'if you now normally live or work in another EU country it is unlikely that you can be made bankrupt in England and Wales, even if you have had residential or business connections here within the last 3 years……..’I believe that my circumstances are such that the above applies to me. As you know I had been living abroad for a few months prior to my accident at the beginning of May when I had returned to the UK to see my daughters and deal with some old matters that required my attention. I had been staying with my daughter who has one of the 3 flats which my ex-wife owns on Stramongate in Kendal. Since the accident I have been convalescing at my daughters home until I felt able to return to France, which is imminent. I don’t have any residential or business address in the UK and am now officially divorced from my ex-wife. The petitioners are the Solicitors Regulatory Authority “SRA” who still insist on putting my address down as Headley House, Joss Lane in Sedbergh despite me not having lived there for 3 years, it is solely in my ex-wifes name, and I notified the SRA and their lawyers of my address in France some time ago, a fact they acknowledged by e-mail and told me they would amend their records. I think the reason they traced me down to Stramongate in Kendal is because when they issued the Stat Demand I informed them and the court that although I was currently residing in France, as a result of the accident I was involved in and injuries I sustained, I could be contacted at my daughters address in Kendal.My question is do you think that the above exemption would apply to me and if so how would I go about asking the court not to grant the order based on such an exemption ?As far as an update on my now ex-wifes position we have recently received the sealed the clean-break order but the old lawyers are still making threats to pursue her directly. She has engaged her own lawyers who are corresponding with Warrens who seem to be avoiding answering anything at this point !!!
Expert:  Jamie-Law replied 4 months ago.

Once you are aware of proceedings you simply defend them. You are likely to have to send a representative to argue it for you. But you have a chance.

Customer: replied 4 months ago.
I'm sorry but that's not particularly helpful. You have provided an extremely general response which applies to anything where proceedings may be issued and you have to defend them and you have a chance !!. What I was asking an opinion on was do you believe my circumstances fit the exemption criteria I have outlined above ?
Customer: replied 4 months ago.
how do I set about arguing the point ?. Do I need to make a formal application to the court beforehand to dismiss the petition or simply attend the petition hearing ?. My difficulty with that is that it is still over a month away and I was planning to return to my residence in France well beforehand and can't afford a representative - any ideas ?
Expert:  Jamie-Law replied 4 months ago.

Yes in my view I think your circumstances fit. You defend on the basis when you get the petition, it will be listed for hearing. Then and only then can you defend it.

You should be served a statutory demand before any petition and again the you can apply to set aside on the basis of your defence above.

But there will be a hearing and either you or legal representative needs to attend. It can't and won't be decided on the papers.

Can I clairfy anything for you about this today please?

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