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Due to the determination of the date of the termination of the retainer the Claimant’s claim was found, pursuant to the Limitation Act 1980, to be statute barred and no costs recovered.

Ram Narayanasamy v. Mr Rahman Karim (1) and Ms Shanara Begum (2) [2020] EWHC B22 (Costs) Master Leonard considered two different preliminary issues following a Part 8 claim by the Claimant, being (i) whether the Claimant’s right to apply for detailed assessment was statute barred and (ii) whether any underlying claim to payment by the Defendant was statute barred. The decision fell to the determination of the date when the retainer had come to an end.

The Claimant, Mr Narayanasamy, had been one of two partners of a firm trading as Dotcom Solicitors. He had entered into a Conditional Fee Agreement and letter of retainer, dated 25th November 2009. Legal services were supplied to two Defendants who were involved in a partnership dispute with Mr Gulam Khan. The Claimant became a sole practitioner of Dotcom Solicitors and the business of Dotcom Solicitors was changed to a limited company. The limited company was registered on 5th November 2012, obtaining SRA approval on 1 April 2013. The Defendants were notified that the terms of the retainer would not change except that the contractual relationship would be with Dotcom Solicitors Limited and that Dotcom Solicitors had assigned to Dotcom Solicitors Limited its right to be paid for work done prior to 1st April 2013.

A bill was sent by Dotcom Solicitors Limited to the Defendants for the legal services. The Defendants denied liability to pay. On 10th February 2018, the Senior Court Costs Office sealed a CPR Part 8 Claim Form seeking an order against the Defendants. This Part 8 claim was dismissed on the basis that Dotcom Solicitors Limited were unable to show that there had been any agreement between Dotcom Solicitors Limited and the Claimant, Mr Narayanasamy, to effect the transfer of his rights and obligations under the retainer dated 25th November 2009. Additionally, as the bill had been delivered by Dotcom Services Limited, rather than by the Claimant, there was no basis for Mr. Narayanasamy to be joined as a Claimant. Mr. Narayanasamy, thereafter, submitted a bill to the Defendants in his own name. The court sealed a CPR Part 8 claim by the Claimant against the Defendants on 10th September 2019.

It was the Defendant’s position that any retainer between them and the Claimant had been terminated on 26th April 2012 (when the case against Mr Kahn was found in the Defendants favour), or at the latest the 1st April 2013. Master Leonard affirmed that if he had had to establish the date of termination of the retainer, he would have found it to be the 14th January 2014, the date when Mr Narayanasamy (as a then director of Dotcom) determined that a relationship could not continue with the Defendants due to lack of instructions.

The question actually posed was, however, when the contract of retainer between the Claimant and the Defendants came to an end. Master Leonard concluded that it must be the case that the Claimant himself terminated the retainer with effect from 1st April 2013, when he ceased to practice in his own name.

As it was determined that the 1st April 2013 was the date when the retainer was terminated, the consequence was that any right to take legal action for payment of legal services had been statute barred since the beginning of April 2019 (Section 5 of the Limitation Act 1980). No decision as to whether the Claimant’s right to apply for detailed assessment of his bill under section 70(2) of the Solicitors Act 1974 was required, on the basis that this was a discretionary remedy. As Master Leonard concluded – it would be wrong to exercise the court’s discretion to put the solicitor in a better position than any other person who has failed to take effective action to recover a debt before the expiry of the limitation period.

Contact A & M Bacon Limited for advice upon any costs related issue.

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