High Court upholds judgment on law firms’ unpaid fees

Waksman: No suggestion of overcharging

The High Court has rejected a challenge to a judgment in default obtained by two law firms whose retainers were terminated by a Swiss company, leaving Carpmaels & Raynsford with unpaid fees of €201,000 (£172,000) and Collyer Bristow with £320,000.

Mr Justice Waksman said there was “no suggestion that there was any overcharge” by the law firms in the work they did on patent infringement and described the challenge by Regen Lab as “nothing but technical manoeuvring”.

Applying the third element of the Denton test to the defendant’s application to set aside the judgment in default, which involves looking at “all the circumstances”, Waksman J said: “The evidence is that while the solicitors were undertaking the work and before the retainer was terminated, the fees up to a point had been paid regularly.

“There were some compliments about its service and there was no suggestion that there was any overcharge. Even now, there is no suggestion of an overcharge.”

Waksman J said counsel for Regen argued that one of the bills was excessive but there was “absolutely no evidence” about that.

“There is not one invoice with its supporting schedules that has been engaged with, apart from to take some technical points about the format, to say this charge or that charge is unreasonable or excessive. In other words, there is nothing by way of an underlying challenge.

“It has not, even now, said what points could be taken by way of an assessment. In other words, this is, in my judgment, nothing but technical manoeuvring to avoid the enforcement of a judgment which the defendant let go in default.”

Delivering judgment in Carpmaels & Raynsford and another v Regen Lab SA [2021] EWHC 845 (Comm), Waksman J said the defendant client was “no stranger to serious and significant litigation around the world in order to protect its patent interests”.

The judge said the litigation that the law firms were due to be engaged in resulted in “almost complete victory” for the defendant, in the sense that the other side was found guilty of “patent infringement in every respect”, but its claim was barred “because of the conduct of Regens’ own director” in publishing relevant information ahead of time.

Judgment in default was entered after Regen failed to serve a defence to the firms’ fees claim but the company applied to set it aside.

Waksman J referred to the comments of Lord Justice Floyd that Regen had a “history of procedural wrongdoing”, and that the breach here was “serious and significant”.

Considering whether there had been ‘good reason’ for the breach, the judge said there was “hardly any real evidence there at all” except that “it is said on a hearsay basis that someone at the defendant’s, who has its own director of legal affairs, understood the filing of an acknowledgement of service prevented judgment in default being entered”.

Waksman J said the acknowledgement of service made it “absolutely plain” that judgment may be entered if a defence was not filed within the requisite period or an application made to contest jurisdiction.

“The notion that this is some unsophisticated overseas party is hopeless in the light of the extensive experience for the protection of its own interests in which this defendant has engaged.”

Waksman J said there was “plainly no good reason” for the breach having taken place and, looking at all the circumstances, “everything runs against the defendant”.

The judge said it was “impossible” to see how relief from sanctions could be granted because each of the three Denton considerations fell “very heavily” against the defendant.

“That, in fact, is the end of the matter because without any relief, the judgment must stand.”

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