A recent ruling from the Central London County Court has spotlighted concerning practices in a law firm’s management of client-care letters. Despite these concerns, the firm secured its claim for unpaid fees.
His Honour Judge Monty KC scrutinised the conduct of SZ Solicitors, a West London firm, in a case involving unpaid legal fees. The judge discovered that client-care letters presented by the solicitors were “retrospectively created” to bolster their case.
The court rejected the defence by Aswant Singh Bharj and Amrik Kaur Bharj, a married couple, who argued that fixed fees were agreed upon and settled with SZ Solicitors. The case primarily revolved around a substantial bill related to litigation over a Sikh temple’s ownership and occupation, the Gurdwara Miripiri Sahib, where the Bharjs were defendants.
Judge Monty expressed skepticism regarding the evidence provided by SZ Solicitors’ partners, Mr. Raghwinder Singh Siddhu and Mr. Mohammad Saeed Zafar. The judge pointed out inconsistencies and inadequacies in their testimonies, including issues with disclosing firm ledgers and the lack of attendance notes.
Mr. Zafar’s handling of payments from Mr. Bharj was of particular concern, with significant transactions made without proper receipts or clear records of payees. Although Mr. Bharj claimed to have paid around £150,000, neither party could provide comprehensive documentation.
Judge Monty highlighted the firm’s failure to maintain proper financial records, which is essential for solicitors. Despite receiving payments, SZ had insufficient evidence to support their claim fully.
A notable aspect of the judgment was the mismanagement of an account intended for expenses related to the temple litigation. Payments were made from this account without proper authorization, which should not have occurred for costs involving the Bharjs as defendants.
Ultimately, the judge concluded that the purported client-care letter dated June 2012 never existed and was indeed created later to support SZ’s current claim. However, he determined that there was no fixed fee agreement as claimed by Mr. Bharj, who had misconstrued ad-hoc payments for disbursements as such agreements.
Judge Monty ruled that SZ Solicitors were entitled to charge on an hourly basis and sought costs limited to £180,000, reflecting the maximum recoverable from the opposing party. The firm was ultimately awarded £62,600 for the principal claim, with an additional £24,800 awarded for other matters.
Additionally, the firm was entitled to its costs for the legal claim, albeit restricted due to non-compliance with procedural requirements. SZ Solicitors were awarded £20,500 in costs from the adjournment caused by the defendants’ procedural lapses regarding evidence translation.
The case underscores the critical importance of maintaining accurate and contemporaneous client-care documentation and financial records within legal practice. The ruling serves as a potent reminder of a solicitor’s duty to uphold transparency and integrity in financial and client interactions.
