Firm wins £2.5m claim after client assigns loan to pay outstanding fees

Anderson: Solicitors Act point not relevant

A London law firm that took an assignment of nearly £2.5m owed to a client to pay its fees has been granted summary judgment by the High Court.

Lesley Anderson KC, sitting as a deputy High Court judge, found that the defendants did not have a real prospect of establishing at trial any of the 10 grounds on which they sought to defend the claim.

Gray’s Inn firm Richard Slade & Co (RSC) has acted over several years for British Virgin Islands-registered company Grenda Investments and several other entities in litigation and arbitration proceedings.

“[They] are said to be indebted to Richard Slade for a substantial sum in respect of the work done on their behalves,” the judge recounted.

In 2018, Grenda assigned to RSC by way of an equitable charge the whole of its interest in a bridging loan made to the defendants as security for the law firm’s fees. Four years later, RSC gave notice to the defendants of the assignment and demanded payment of the £2.46m owed under the loan.

One of the defences was that the firm’s retainers were contentious business agreements under the Solicitors Act 1974 and so it was debarred from bringing the claim.

While Judge Anderson could not say for sure whether the retainers were contentious business agreements, she noted that the action was not based on them.

In any event, “the essential purpose” of the contentious business agreements provisions in the Act was to protect the lay client – the defendants had “simply failed” to show why they would be entitled to such protection, given that they were not RSC’s clients.

The defendants did not admit that RSC provided any legal services to Grenda or that it was owed anything, despite the eponymous Richard Slade verifying the particulars of claim with a statement of truth.

Judge Anderson said: “A non-admission is just that, a putting of the other side to proof but on an application such as this, in circumstances where the particulars of claim has been duly verified, the burden is on the defendants to prove that the particular defence has some real prospect of success or that there is some other reason for trial.

“The defendants have adduced no evidence to undermine the claimants’ case on this point.

“In any event, I agree with counsel for the claimants that the points are not relevant in circumstances where, pursuant to the equitable charge, Richard Slade is suing as the assignee of the right to recover the debt.

“The state of the account between it and Grenda is irrelevant, not least because [the defendants] are strangers to the assignment affected by the equitable charge.”

Judge Anderson refused permission to the defendants to amend their defence, struck out the defence and entered judgment for RSC.

Earlier this year, RSC acquired

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