Legal Cost Specialists

Another one bites the dust

By on Oct 30, 2020 | 0 comments

The wheels of justice turn slowly at the best of times but one would hope the regulatory authorities would act with a degree of alacrity.

Many readers will recall the case of GSD Law Ltd v Wardman & Ors [2017] EWCA Civ 2144.  This case concerned a number of personal injury claims where GSD Law acted for the claimants.

At the subsequent detailed assessment of the costs of those claims in 2014, the paying parties’ insurer alleged systematic fraud and misconduct against GSD Law, including claiming for hourly rates in excess of the retainer rates, claims for senior lawyers’ rates for work done by junior fee-earners, and claims for work that had simply not been done.

At first instance, Regional Costs Judge Neaves found GSD Law’s principal, Kirna Madhas, to be “a wholly unreliable witness” and that her evidence was “not only evasive and inconsistent, but dishonest”.

He held all the allegations made against GSD Law proved and that the extent of the conduct and dishonesty of GSD Law was at the most serious end of the scale. This included submitting a forged conditional fee agreement to the court.

He concluded: “The conduct of the receiving party’s solicitor is sufficiently egregious as to make the only appropriate sanction the disallowance of all costs on the sample files. The receiving party will also pay the costs of the assessment proceedings including the preliminary issues.”

The Court of Appeal rejected GSD Law’s subsequent appeal.

One of the most striking features about the case (as if forging a CFA were not bad enough) is that during the detailed assessment proceedings Ms Madhas admitted making false allegations to the Costs Lawyer Standards Board about the conduct of the insurer’s Costs Lawyer, Jon Williams of Williams Associates Costs Lawyers.  This was clearly a blatant attempt to undermine the proper challenges that had been made to her fraudulent claim for costs.  Jon Williams is one of the country’s most highly respected Costs Lawyers and, even at the time, this act alone appeared to be adequate reason for Ms Madhas to be struck off.

The original decision was in 2014 and the Court of Appeal decision was in December 2017.  The relevant authorities do not appear to have taken immediate action against GSD Law and Ms Madhas after either of those hearings.

Apparently, it was not until August 2019 that the SDT intervened in her firm (now practising under a new name following the shame of the Court of Appeal decision) with her practising certificate suspended.

The Solicitors Disciplinary Tribunal (SDT) has finally struck off Ms Madhas.  The list of sins for which the SDT struck her off included:

  • Producing dishonest costs schedules and false documents to the court.
  • Failing to inform clients of adverse costs orders, so they only found out when pursued for payment by defendants.
  • Failing to inform a client of a court hearing date or the outcome of her case.
  • Failing to notify after-the-event insurers of advice from counsel that personal injury claims may well not succeed.
  • The fact Ms Madhas’s motivation was a “nakedly financial one and greed was at the heart of this matter”.
  • The making of “unfounded and malicious complaints” against Mr Williams which were “disgraceful and outrageous”.
  • Between February 2016 and November 2017 the Legal Ombudsman made awards against Ms Madhas for inadequate professional service in respect of eight clients, which were never paid.
  • Failure to provide the SRA with access to all the files for which they had issued a production notice.
  • Failure to provide files to clients who had requested them.
  • Submitting a proposal to a professional indemnity insurer which said the firm had not been the subject to LeO rulings or an SRA investigation in the previous decade, both of which were false.

Given the findings of fact made by Regional Costs Judge Neaves in 2014, and Ms Madhas’s own admission during that hearing that she made false allegations to the Costs Lawyer Standards Board, one does have to wonder why she was not immediately suspended.

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