The High Court has rejected a solicitor’s appeal against a Legal Ombudsman ruling that he should refund £34,000 of the £37,000 fee that his client signed under a contingency fee agreement (CFA).
The Legal Ombudsman ruled that the client, Ms Patel, had not been properly advised about the terms and effects of the CFA by her solicitor, Leonard Ejiofor, when signing a contract relating to work in a probate dispute case.
After a small amount of work had been completed and paid for, Ms Patel said that she could not afford to pay any more upfront fees having been told that the litigation could cost up to £35,000. She then agreed to pay the firm 20% of any damages that they reclaimed on her behalf.
On 9 December 2013, the trainee working on the case spoke to the executors’ solicitor to put her on notice of a claim and she agreed to hold funds until further contact was made. They then wrote to the solicitor a day later and received an undertaking that the proceeds of a property sale would be held until Ms Patel’s claim had been dealt with.
Ms Patel also attended a meeting with her solicitor on 10 December to sign the CFA. Her solicitor reported that the CFA was signed before the undertaking had taken place, which meant that the potential dispute was still live. However, in a letter to the Legal Ombudsman, Ejiofor had appeared to acknowledge that this happened before.
Ms Patel very quickly reached a settlement with her siblings and agreed that they could deduct £94,600 from the £157,428 she was to receive from the property sale in respect of the claims they had against her.
The Court said that Ejiofor was aware of this agreement by no later than 11 December. That day, he billed Ms Patel £37,608 including VAT and disbursements, deducting it from Ms Patel’s inheritance and leaving her with £25,000. Ejiofor rejected various complaints before Ms Patel contacted the Legal Ombudsman.
The Ombudsman said that there was no evidence of ‘significant activity’ on behalf of the firm in relation to the case, that they hadn’t set out the pros and cons of the CFA, and that the firm had put its interests ahead of the client’s. In conclusion, the Ombudsman said
“In my view there was clear pressure bordering on duress. There does seem to me to have been a rather disagreeable rush to get Miss Patel to sign up to the CFA without any real thought for the impact upon her.”
Title Research are strongly opposed to the use of contingency fees by “heir-hunters” in non-contentious probate and estate administration cases as we believe they simply do not represent a transparent and fair position for beneficiaries.
Tom Curran, CEO of the genealogy and asset repatriation specialist, commented:
“Contingency fees have long been used by some firms within our sector but our position has always been that they often end up being detrimental to the client. The same criteria used by The Legal Ombudsman to determine whether or not the contingency fee was enforceable in this instance, apply to the use of contingency fees by “heir hunters”. We have seen many cases of duress, with firms rushing to sign up beneficiaries before they understand the impact of what they are committing to and putting the interests of the “heir hunter” ahead of the client.
This is one of the reasons why Title Research always offers its services based on a price that is agreed before any work is undertaken – we believe this offers a clear solution and the best value for the client.”
For more information on Title Research’s services and our approach to pricing, visit www.titleresearch.com.
Topics: news, High Court, Solicitor
