Friday, 18 September 2009

Legal Costs, and how to add to the pain

The costs resulting from a law case have interest for both the consumer, (if that is the correct term for someone who must swallow large and painful morsels of legal fees) and for the lawyers as a matter of legal principle. Some case must be taken in drafting a claim, because the costs may rebound on a plaintiff if improper matters are brought and not proved. There is a legal maxim that costs follow the event, as illustrated recently. In Phillips And Anor v Gould HC AK CIV 2003-404-5062 11 September 2009, Justice Peter Woodhouse awarded the defendant (a well known Auckland barrister ) indemnity costs. The plaintiff is an Auckland solicitor, who took exception to Mr Gould’s handling of work on a commercial matter. The judgment tells a sorry tale of the plaintiff’s failure to observe timetable orders, delay in complying with other orders and finally persuing a claim which was not only hopeless, but also alleged fraud and deceptive conduct. It is a well known principle that an allegation of fraud must be brought with care, because if you do not succeed, the costs awarded will be the actual costs of the case. (Normally they are about 60%). The judge strongly criticised Mr Phillips and ordered him to pay the full costs. The tenor of this form the judgment at para 27 “The negligence claims of the plaintiffs failed in respect of all elements of a negligence claim: there was no duty of care; if there was a duty there was no breach; if there was breach, any breach was not causative of the claimed loss; the claimed loss was not established.” And at para 31 “The claims failed because the plaintiffs did not have available any material evidence in support of elementary contentions the plaintiffs had to establish, save in respect of the possible duty of care owed to Brambletye Holdings.” Finally at para 40 “My overall assessment is that Mr Phillips, for himself and for Brambletye Holdings, which he controlled, acted improperly in bringing these proceedings and then in continuing them. I cannot avoid the conclusion that Mr Phillips cast around for somebody who he might sue, if he could find a semblance of a claim, for the purpose of trying to recoup some of the losses that Mr Phillips had sustained through his own mismanagement of Brambletye Stud and, in respect of Mr Plumley, through his own breach of fiduciary duties and negligence.”

I do not comment further, leaving the judgment to say it all.

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