Law firm had “every right” to terminate retainer, judge rules

Victoria Beckham: Client of claimant’s beauty treatment business

A law firm had “every right” to terminate its retainer with a clinical negligence client when presented with evidence from the defendant that she had lied about the severity of her symptoms, a costs judge has ruled.

Former air stewardess Cathryn Hulme had claimed she was unable to do much on a side business providing beauty treatments, but later admitted she had celebrity customers such as Victoria Beckham and Jesy Nelson.

The allegations of dishonesty made by the defendant against her were “substantive enough” for Southport firm Handley Law to terminate its retainer in June 2021, decided Costs Judge Leonard in a decision from March just published.

This meant he rejected Ms Hulme’s claim that she did not have to pay the firm’s costs.

The law firm had acted under a conditional fee agreement (CFA) since 2014 on a claim relating to continence surgery performed in 2010. Ms Hulme said it led to a serious nerve injury that caused motor problems and severe pain. She sought damages of around £620,000.

Ms Hulme had mentioned previously undertaking a small amount of beauty treatment work on the side but that she had earned little money from it and her injuries made it difficult too.

However, evidence served by the defendant in June 2021 indicated that her beauty treatment business was much more extensive and current, and put her on notice of an intention to allege fundamental dishonesty.

Handley Law director Dr Victoria Handley said her client did not provide “a coherent or reasonable explanation” for the evidence. By reference to the terms of retainer, the allegations were “substantive enough” to justify terminating it.

“She also considered there had been a breakdown in confidence and that she was unable to obtain proper instructions,” the judge noted.

Counsel was also not prepared to act further on CFA basis, while the after-the-event insurance provider withdrew cover.

Ms Hulme denied having exaggerated or been fraudulent. She accused Dr Handley over the way she handled the case, including failing to ask relevant questions regarding the beauty business.

Judge Leonard said he had no doubt that Ms Hulme continued to experience “severe physical and psychological distress, including pain which seems, on the expert evidence, itself to have a major psychological element”.

He continued: “She is entitled to every sympathy for those problems, which may well distort her judgment and her perception of events. It does not follow that she is not to be held responsible for what she says and does.

“On the evidence that has emerged in these proceedings, I cannot avoid the conclusion that the claimant has been overstating the effect on her of her medical problems and underplaying her active role in the beauty business, first to support her damages claim and then to resist the defendant’s claim for costs.”

The judge found that “the claimant has over a period of years presented two very different versions of her life: one for the purposes of her beauty business and the other for the purposes of maintaining her clinical negligence claim”.

In the first, she was “a busy, successful and active beautician with long experience in the beauty industry”, while in the second, she was “disabled to the point of being unable to do more than a very limited amount of work from time to time”.

Judge Leonard said Ms Hulme admitted to treating celebrity customers including Victoria Beckham, Jesy Nelson, Petra Ecclestone and members of the Coronation Street cast.

Her evidence was that it was a “microbusiness” for family and friends. “The proposition that the claimant could attract such clients on the back of such a business, thanks to a completely misleading social media profile, does not really bear examination.”

The judge found that Ms Hulme “appears to have a habit of attempting to shift responsibility for her actions on to others, as if she had no will of her own”.

The claimant had “repeatedly lied” to her solicitor concerning her beauty business and her “account of her physical and psychological condition was flatly contradicted by the evidence of her business activities”.

Ms Hulme’s “blustering response did not offer any credible explanation, but no credible explanation was really possible”.

As a result, Dr Handley had “every right to terminate the retainer when she did”, in the wake of the evidence.

Judge Leonard added: “Dr Handley had already invested much of her firm’s time and resources, on a conditional fee basis, on a case that she could no longer properly support. It was not incumbent upon her to make further enquiries or to re-instruct experts.”

As a result, Handley Law was “fully entitled to seek payments of its costs and disbursements from the claimant”.

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