£258,583.78 Bill of Costs assessed at £0 for misconduct

The recent decision of Costs Judge James in Kapoor v Johal, Johal & Johal [2024] EWHC 2853 (SCCO) is a relatively rare example of the Court not only exercising its powers under CPR 44.11, but this resulting in a complete disallowance of all costs claimed within the Bill of Costs. The £258,583.78 Bill was assessed at £0 and the receiving party (RP) was ordered to pay the paying party’s (PP) costs of assessment on the indemnity basis, which were allowed in full. The solicitor for the RP will also be referred to the Solicitors Regulation Authority by the Court.

CPR 44.11 provides:

“Court’s powers in relation to misconduct

(1) The court may make an order under this rule where –

(a) a party or that party’s legal representative, in connection with a summary or detailed assessment, fails to comply with a rule, practice direction or court order; or

(b) it appears to the court that the conduct of a party or that party’s legal representative, before or during the proceedings or in the assessment proceedings, was unreasonable or improper.

(2) Where paragraph (1) applies, the court may –

(a) disallow all or part of the costs which are being assessed; or

(b) order the party at fault or that party’s legal representative to pay costs which that party or legal representative has caused any other party to incur.”

The underlying litigation concerned a protracted boundary dispute. So far as relevant, various adverse costs orders were made against the Claimant and the detailed assessment concerned those costs. The Defendants had been represented at various times by three different firms of solicitors. The majority of work was undertaken by the final firm, RH Solicitors Ltd, a Southall based law firm whose sole practitioner Ms Multani had handled the matter.

There were numerous problems with the way the Bill had been drafted. To begin with:

1. The case had been ongoing for so long it spanned the Jackson reforms. As such, the Bill should have been split (PD 47 para5.8(7)) to show the work undertaken pre and post 1 April 2013. It was not so split.
2. The Bill should have contained a note of any order for costs that had been made (PD 47 para.5.16(2). It did not. This was significant here as there had been numerous hearings including ones where there was no order for costs or where the costs had already been summarily assessed.
3. A significant element of the costs contained within the Bill related to the costs of a failed appeal on one aspect of the case. Confusingly, there was no attempt to separately identify these costs from the other costs that were being incurred during the same period in relation to the ongoing litigation itself. This would not have been a serious problem but for the fact that the relevant costs order in the appeal was, itself, overturned on appeal after the detailed assessment proceedings had been commenced. There was therefore no way to properly determine what costs would now no longer be recoverable. Despite Supplemental Points of Dispute being served highlighting this fact and inviting the RP to amend the Bill, no attempt was made to do this and the, now defective, Bill was the one lodged with the Court for assessment.

In terms of these preliminary matters, Costs Judge James concluded that she would not, in isolation, have taken any one of those problems as being sufficiently serious to merit a CPR 44.11 sanction. However:

“In my view Points 1, 2 and 3 would, taken together, warrant a sanction under CPR Part 44.11. The cumulative effect of all three of the errors in the Bill challenged in those Points of Dispute, would have taken a considerable amount of scarce Court resources to resolve. Whilst RP is not obliged to file and serve Replies to Points of Dispute, to ignore Points 1, 2 and 3 when they clearly warranted attention (and a redrawn Bill) was unreasonable.”

If that was not bad enough, the real problems for the RP came with what was claimed within the body of the Bill. Costs Judge James, both during the hearing itself and afterwards, undertook a forensic examination of the papers and, to put it mildly, was not impressed. Among her extensive findings were, and these are no more than examples:

• In relation to an interim hearing where the RP was awarded costs which were summarily assessed at £950, costs of at least £5,435 were claimed within the Bill. “That is … a very serious matter; for one thing, given that these costs were summarily assessed at £950.00 on 1 May 2015, none of this should be in the Bill at all. For another, the total costs of Bana Vaid Solicitors (the firm with conduct at the time of this Hearing) were included in the 5 February 2022 Statement of Costs. In that document, Ms Multani stated that Bana Vaid’s total charges, inclusive of disbursements and VAT, were £4,068.00. How Part 2 of the Bill has been drafted in such a way that this single Hearing alone is being claimed against PP at more than Bana Vaid’s total charges to RP inclusive of disbursements and VAT, is unclear, but is clearly both unreasonable and improper”.
• In relation to an interim hearing where the corresponding costs order was “No Order as to Costs”’, the Bill claimed costs of at least £2,225.00. “That is again very serious, firstly because, with no Order as to costs, none of this should even be in the Bill. Secondly, in the 5 February 2022 Statement of Costs, Ms Multani stated that M and S Solicitors’ fees inclusive of disbursements and VAT, were £2,500.00. How Part 1 of the Bill has been drafted in such a way that this single Hearing alone is being claimed against PP at almost as much as M and S Solicitors’ total charges to RP inclusive of disbursements and VAT, is unclear, but is again clearly both unreasonable and improper.”
• The various interim invoices rendered to the RP were not included within the papers lodged with the Court in advance of the detailed assessment hearing. Some of the invoices were produced on the second day of the hearing. “Filleting the Invoices out of the file before lodging it at Court is a serious matter in itself. However, upon reviewing the partial set of Ms Multani’s Invoices on day two of the Hearing, their contents were of grave concern and indicated serious misconduct on a number of issues, which I addressed during the Hearing.”
• The Costs Judge undertook a detailed analysis of the amounts invoiced to the RP compared to the amounts claimed within the Bill. In relation to Part 3 of the Bill, the RP had been invoiced £12,682.50 for the corresponding period. The Bill claimed £35,670 for this same period. “Thus, the sum claimed in Part 3 of the Bill is almost three times the amount invoiced to RP. That is significant because, by operation of the indemnity principle, RP is only entitled to recoup from PP what has been paid to Ms Multani’s firm.” In respect of Part 4 of the Bill, the RP had been invoiced £8,292.50 for the corresponding period. The Bill claimed £30,381 for this same period.
• Part 1 of the Bill claimed the costs in respect of the first firm of solicitors. Those costs were claimed at £16,706. In an earlier Statement of Costs, Ms Multani stated that this firm’s fees were £2,500. “Hence Part 1 of the Bill seeks from PP almost 7 times what RP apparently paid. Bearing in mind M and S Solicitors ceased to act for RP in August 2013, there is no realistic prospect of them coming to RP for any more money 11 years later, which begs the question of where the extra £14,206.00 was destined to go.”
• Part 2 of the Bill claimed the costs in respect of the second firm of solicitors. Those costs were claimed at £18,613. In an earlier Statement of Costs, Ms Multani stated that this firm’s fees were £4,068. “Hence Part 2 of the Bill seeks from PP almost four and-a-half times what RP apparently paid. Putting it another way, the Bill is £14,545.00 higher than the charges levied by Bana Vaid; as they ceased acting in February 2016, there is no prospect of them coming to RP for any more money nearly 9 years later, not least given a letter dated 11 February 2016 from Kelly Harwood thanking RP for payment of their Bill. That begs the question of where the extra £14,545.00 (or £28,751.00 across Parts 1 and 2) was destined to go.”
• “…if (having signed the Bill and asserted that the costs claimed in the Bill do not exceed the costs which RP is liable to pay in respect of the work which this statement covers) the Bill in fact claims more than RP is liable to pay, it is a serious disciplinary matter. The Bill claims approximately three times the amount that RP was invoiced, and the reasons for that are serious issues and not (in my view) mere ‘mistakes’.”
• “None of the Invoices numbered 1 to 7 above (and 8 to 19 below) claims VAT on Ms Multani’s costs, and there is no VAT number on those Invoices either. … Yet in the Bill, VAT is claimed on Ms Multani’s costs throughout. In Part 3 (covering the work in Invoices 1 to 7 above) VAT is claimed at 20% i.e. £7,134.00, but if VAT was not invoiced to RP in 2016/2017, why is PP being Billed for it now? … I did not spot the VAT issue during the Hearing, and I had not factored it into the Judgment that I gave at the Hearing on day two (15 October 2024). It has been included here as it is clearly serious, but it is for the SRA and/or HMRC to consider whether the Bill claiming in 2024, VAT that was not invoiced to RP back in 2016/2017, is problematic. It certainly seems so to me.”
• There were various claims within the Bill for Ms Multani’s time for preparing for and attending four interim hearings. This time was variously claimed at £1,425 plus VAT, £1,125 plus VAT, £1,125 plus VAT and £900 plus VAT. However, the Costs Judge concluded that Ms Multani had not attended any of these hearings. A clerk had been sent instead. Further, the RP had been charged a fixed fee of £150 (with no VAT) for each of these hearings. “That is not only extremely serious in terms of the breach of the indemnity principle, but also in terms of numerous attendance notes having been placed or annotated on the file, as I find to be the case, at a much later date, claiming Grade A Solicitor attendances that never happened. This was not an isolated incident, either, as shown below. … It is clearly both unreasonable and improper to have claimed Ms Multani’s attendance at Court on multiple dates when she was not there.”
• There were numerous attendance notes within the file that appeared to support the work claimed within the Bill. However, these were contradicted by the invoices and other contemporaneous evidence within the file. The Costs Judge concluded these additional attendance notes were not contemporaneous. “The complete file has been retained at the SCCO as evidence should the SRA wish to see it. … There are scores if not hundreds of non-contemporaneous serif attendance notes across the files of all three firms of Solicitors who acted in this matter; the notes all look the same as to font, font size and layout, and they do not look like the other (contemporaneous) attendance notes on the files of papers. I find that they were added at a much later date. That is a matter of the gravest seriousness.”
• One invoice to the RP included an attendance upon RP claimed at 15 minutes. In the Bill, that had been claimed at 1 hour and 30 minutes. The same invoice included a claim for 1 hour reviewing the file of papers received from the previous solicitors. That appeared in the Bill, as two separate tranches of 3 hours and 30 minutes each, totalling 7 hours.
• Another invoice included an attendance upon RP claimed at 10 minutes. That appeared in the Bill as a claim for 2 hours.
• Another invoice included two attendances upon RP claimed at 10 minutes and 15 minutes respectively. That appeared in the Bill as a claim for 30 minutes and 1 hour respectively.
• Another invoice included a charge of 10 minutes at £150 per hour (with no VAT) for an attendance on RP. The Bill claimed this time as 40 minutes at £250 per hour plus VAT.
• Another invoice claimed a fixed fee of £500 (with no VAT) for attendance at Court by Ms Multani. This was claimed in the Bill as 5 hours at £250 per hour plus VAT (i.e. a total of £1,500).
• And so on, with endless discrepancies between the amounts invoiced to the RP, the amounts shown in various Form N260’s served in the matter and the amounts now claimed within the Bill.
• “Regrettably I find that the claim for 12 hours to put together this amount of documentation is substantially fabricated.”
• “I have found the Bill to be riddled with claims that (regrettably) I find dishonest, and unreasonable and improper”.
• “… the Certificate on the Bill asserting that ‘This Bill is both accurate and complete and that in relation to each and every item included in parts 3 – 5 of the Bill do not exceed the costs which the Receiving Party is/are liable to pay to this firm’ is untrue. As shown above, with few exceptions, the amounts claimed in Parts 3 to 5 of the Bill are substantially more than RP was liable (and indeed was billed and has – mostly – paid, for Ms Multani’s services). I found during the Hearing that Invoices 1 through 19 (and 20 although I have not considered Invoice 20 in detail) were interim statute Invoices and nothing I have seen on the files since the Hearing has contradicted that finding. Ms Multani has no basis (and clearly from the files never had any agreement) to reopen historic Invoices sent to RP and paid by him, mostly at £150 per hour with no VAT, years ago. As such, following Bailey v IBC Vehicles Ltd, Ms Multani’s signature below the – clearly untrue – Certificate, is a serious disciplinary issue.”

The fact the Bill had been drafted by an external costs draftsman, Mr Kumar of Nathan Associates, was of no assistance to the RP or solicitor:

“Per Gempride Limited v Bamrah Ms Multani cannot shift responsibility for signing the Certificate to Parts 3 to 5, onto Mr Kumar. Nor can RP do so in respect of Parts 1 and 2. The Misconduct in doing so is their own, and the Court’s power to reduce the Bill accordingly under CPR Part 44.11, could not be more clearly indicated. This is the worst example of tampering with a file of papers that I have ever encountered and the fact that the files of Ms Multani’s two predecessor firms have also had the same treatment, is even more extraordinary.”