Judge rejects recusal in fees case involving firm that owes him money

Sims: No real danger of bias

A QC has rejected an application recuse himself from sitting as a deputy High Court judge in a case involving a law firm suing for unpaid fees that itself owes him fees.

Mr Hugh Sims QC said the £7,700 he was owed by listed law firm Ince represented only around 1% of his outstanding debt.

He was hearing an application to set aside a $1.4m default judgment that Ince obtained against its former client, Mellitah Oil & Gas (MOG), for unpaid fees.

In his ruling, he recounted how, when reading into the papers the day before the hearing, he noticed that the solicitor who was originally handling the matter for the law firm, before it was handed over to fellow City firm RPC, was Nicholas Yapp.

Mr Sims wrote to the parties to explain that Mr Yapp, then of predecessor firm Gordon Dadds, instructed him in a number of connected matters which ran between 2014 and 2018.

The judge stressed that there was no ongoing instruction in those or any other cases involving either Mr Yapp or Ince as a firm.

But he asked his clerks at Guildhall Chambers to check and one of the files indicated that fees of £7,700 plus VAT were outstanding.

At the start of the hearing, MOG asked the judge to recuse himself – he had anticipated that, if any party would do so, it would be Ince on the basis that he may have an “animus” towards the firm over the unpaid money.

The challenge was not on the basis of actual bias, but because “the combination of the unpaid fee and the fact that MOG’s arguments on the application involved criticism of the conduct of [Ince], and that included direct or indirect criticism of Mr Yapp… were such that a fair-minded and informed observer would conclude there was a real possibility or a real danger that the tribunal was biased”.

MOG emphasised that the unpaid fee was not de minimis, which was the point at which Mr Sims disclosed how much it represented of his outstanding debt.

Mr Sims accepted that the reasonable or fair-minded observer – the test when it comes to apparent bias – was not taken to be a lawyer. It was “implicitly accepted” by MOG that such a lawyer would not consider there to be a real danger of bias here.

But the observer was taken to know about the judicial oath and the training and experience of a judge, he continued.

“The implicit thrust of what was being submitted was that in some way because there was an outstanding debt in the sum disclosed a reasonable and fair-minded observer would conclude that this would in some way induce a judge to act in favour of the person owing the debt, presumably on the basis it might in some way curry favour.

“Put in that way it seems to me a reasonable and fair-minded observer would discount that being a real danger, knowing about the judicial oath and the training and experience of a judge, and I also reject it. I am not persuaded that it would justify my recusal.”

Further, the nature of the criticism directed at Mr Yapp and Ince was “relatively insubstantial” and had no real impact on the events which led to the default judgment.

“So this additional factor did not ultimately add much, if anything, to the submissions on recusal.”

Mr Sims concluded: “It seemed to me the greater risk might be if there was a risk of inadvertent communication between my clerks and [Ince] in relation to the debt which could result in a communication which resulted in a real danger of bias.

“I instructed my clerks to ensure there was no communication and I have ensured this judgment was circulated in draft, and handed down, in short order to remove any potential outside risk there might be of such communication whilst the matter remained before me.”

In the substantive ruling, Mr Sims rejected the application to set aside the default judgment but said MOG should be able to challenge the bill under the Solicitors Act 1974 – as it wanted to – if it could persuade a judge in separate proceedings that special circumstances existed to justify doing so more than 12 months after the bill was delivered.

He did so on the basis that Ince agreed not to raise the abuse of process argument it had mooted.

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