A small East London law firm has scored a hat-trick of successful appeals against sanctions after overturning a wasted costs order at the Employment Appeal Tribunal (EAT), following challenges to the Legal Ombudsman and Solicitors Regulation Authority.
Mr Justice Langstaff, president of the EAT, said the employment judge who imposed the order on Hafiz & Haque had indulged in “impermissible speculation” that the firm had misled a claimant.
Langstaff J said there was no “particular reason” why the firm, a general civil practice with three partners, should have been any more likely than the claimant to have attributed an “unrealistic value” to an employment claim.
“A client who regards his claim as being very substantial when an experienced lawyer would not is a figure well known in legal circles,” Langstaff J said.
He said it was “not inconceivable” that the claimant might be such a case.
“The judge’s conclusion that the claimant was misled into thinking his claim was worth more than it was is one which simply cannot be sustained without there being speculation.
“It can be founded on no documented evidence, for privilege precluded it. He may well have been advised and ignored the advice.”
Delivering judgment in Hafiz & Haque Solicitors v Mullick and another (UKEAT/0356/14/DA), Langstaff J said Mr Mullick’s claims that he had been discriminated against on the grounds of race, and unfairly and wrongfully dismissed were rejected by an employment tribunal in 2013.
The tribunal found that Mr Mullick’s schedule of loss was “grossly exaggerated”, coming as it did to over £89,000. On the basis that the claim had been “overinflated”, the tribunal ordered him to pay £4,900 towards the other side’s costs.
Langstaff J said that, after paying the money, Mr Mullick pursued the claimant’s solicitors for a wasted costs order, which was granted by employment judge Goodman.
However Mr Justice Langstaff found that she “did not apply a sufficiently rigorous test” and the tribunal “found itself speculating to an extent which, on appeal, the court must regard as impermissible”.
Langstaff J allowed the law firm’s appeal and awarded it £400 towards its costs.
Earlier this year, in what is believed to be the first appeal against a Solicitors Regulation Authority sanction, the Solicitors Disciplinary Tribunal revoked the decision to rebuke Hafiz & Haque over alleged failures to nominate compliance officers in time and disclose a suitability issue.
The previous year the law firm won another victory on appeal, this time in the High Court, where an “unlawful and irrational” Legal Ombudsman decision to reduce its fees and compensate a client for distress was struck down.