Gempride Ltd v Bamrah & Anor

Under CPR rule 44.11, a legal representative’s conduct may be unreasonable or improper without being dishonest. A solicitor who certifies a bill of costs must ensure that it complies with the indemnity principle. A legal representative remains responsible to the court and third parties for the conduct of an agent to whom litigation work is delegated, especially where the agent is not an authorised litigator.

Before-the-event insurance is available where it is in fact obtainable, even if the litigant elects not to use it because it does not fund the solicitor of choice. Once the threshold for misconduct is met, the court retains a discretion and must impose a proportionate sanction.

Gempride Ltd appealed from an order of His Honour Judge David Mitchell in the County Court at Central London. The judge had allowed Ms Bamrah’s appeal from Master Leonard and dismissed Gempride’s application for a sanction under CPR rule 44.11.

Ms Bamrah, a solicitor acting through her own firm in her personal-injury claim, certified a bill which claimed an hourly rate above the rate stated in her conditional fee agreement. She also approved a reply stating that before-the-event legal-expenses insurance was unavailable, although such insurance existed but did not fund her chosen firm. Independent costs draftsmen had prepared the bill and replies.

The central questions were whether Ms Bamrah was responsible for the draftsmen’s acts, whether dishonesty was necessary for CPR rule 44.11 misconduct, and what sanction was proportionate.

1. Appeal allowed. The judge erred by treating dishonesty or an intention to deceive as necessary before conduct could be unreasonable or improper under CPR rule 44.11. The rule adopts the narrow wasted-costs meanings explained in Ridehalgh v Horsefield [1994] Ch 205, but dishonesty and breach of a formal professional rule are not necessary ingredients.
2. Falcon Legal remained responsible for Lawlords’ conduct. Lawlords acted as its agents in the detailed assessment and were not authorised litigators in their own right. An authorised solicitor cannot avoid responsibility to the court or a paying party because a delegated agent acted outside instructions. That conclusion was reinforced by Crane v Canons Leisure Centre [2007] EWCA Civ 1352.
3. Ms Bamrah’s certification of the bill was unreasonable or improper. She knew the contractual hourly rate was £232 until June 2012, but certified a bill claiming £280 throughout. Even accepting that she honestly relied on Lawlords’ advice, no competent solicitor could reasonably certify a retrospective rate which breached the indemnity principle. The certificate was important because the court and paying party were entitled to rely on it, as recognised in Bailey v IBC Vehicles Ltd [1998] 3 All ER 570.
4. The reply that before-the-event insurance was unavailable was inaccurate. Insurance was available, although it did not fund the firm Ms Bamrah preferred. That choice did not entitle her to prevent Gempride from investigating whether the alternative funding should have been used.
5. Ms Bamrah could not recover her personal costs of attending the appeal below while represented by solicitors and counsel. The court also had power to revisit the costs order below as a consequence of allowing the substantive appeal.
6. The court quashed Judge Mitchell’s order and varied Master Leonard’s order. It disallowed one half of the profit costs otherwise payable in Part 1 of the bill under CPR rule 44.11. Total disallowance above the litigant-in-person rate would have been disproportionate, particularly because Ms Bamrah had not acted dishonestly.

1. Court of Appeal (Civil Division): Allowed Gempride’s appeal and substituted a CPR rule 44.11 sanction: one half of the otherwise assessable profit costs in Part 1 of the bill were disallowed. [2018] EWCA Civ 1367
2. County Court at Central London: Judge Mitchell allowed Ms Bamrah’s appeal from Master Leonard, dismissed Gempride’s CPR rule 44.11 application, and made costs orders in Ms Bamrah’s favour. That order was quashed.
3. Master Leonard, sitting as a Deputy District Judge: Found misconduct in the certification of the bill and the reply on alternative funding, and disallowed profit costs above the litigant-in-person rate. The sanction was varied by this court.