Kerry Underwood

UNASSESSED INTERVENTION COSTS ARE LIQUIDATED SUM FOR INSOLVENCY PURPOSES

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Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

The Law Society (Acting Through the Solicitors Regulation Authority) v Blavo [2018] EWCA Civ 2250

the Court of Appeal held that unassessed costs of an SRA intervention constitute a debt for a liquidated sum under section 267(2)(b) of the Insolvency Act 1986.

Applying the approach adopted in

McGuinness v Norwich and Peterborough Building Society [2011] EWCA Civ 1286 (09 November 2011)

the Court Appeal held that Paragraph 13, Part II, Schedule 1 to the Solicitors Act 1974, which permits recovery of intervention costs as a statutory debt, creates a pre-ascertained liability.

The fact that the liability is in relation to solicitors’ fees does not bring into play the general principle that a solicitor’s claim for remuneration is an unliquidated sum, being a reasonable and fair amount for the work done.

An SRA intervention agent’s costs required no further act under the Solicitors Act 1974.

Paragraph 13 provided the mechanism for determining the amount.

Consequently the costs were a debt for a liquidated sum and the High Court should not have set aside the statutory demands under rule 6.5(4)(b) of the Insolvency Rules 1986.

Postscript

In a separate High Court judgment on 21 December 2018 John Blavo was ordered to pay the government £22.1 million after the court found it more likely than not that systemic fraud had taken place in legal aid claims, and that there was an endemic culture of dishonesty.

An audit by the Legal Aid Agency in 2015 showed claims for representation in mental health hearings in 24,658 cases, but only 1,485 actual hearings.

See –

 The Lord Chancellor v Blavo & Co Solictors Ltd & Anor [2018] EWHC 3556 (QB) (21 December 2018)

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Written by kerryunderwood

March 8, 2019 at 6:54 am

Posted in Uncategorized

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