In January this year, his Honour Judge Waksman held that lenders could satisfy their duty under s78 of the Consumer Credit Act 1974 to provide a copy of the consumer credit agreement by providing a reconstituted version of the executed agreement which may be from sources other than the actual signed agreement itself. The question the court had to decide here was whether a non-party order costs orders could be made against the claims management company, its sole director/shareholder and the solicitors acting for the claimants
Consumer Credit Litigation Solicitors ("CCLS") were the solicitors for all the claimants. CCLS was the trading name for the sole practice of Mr Burley. The claims management company was Cartel Client Review Limited ("CCR"). Following on from the judgment, permission was given to join Mr Burley trading as CCLS and CCR in respect of an application for a non-party costs order against them. In addition, Mr Wright who was the sole shareholder and managing director of CCR was also joined to the application for a non-party costs order.
CCR conceded that it should be jointly and severally liable with the claimants for the costs. The court decided that a costs order was justified against CCLS. The solicitors failed to obtain after the event insurance ("ATE") for its clients. Not only did it fail to obtain ATE, but it failed to tell the clients and was effectively acting without instructions. The overwhelming likelihood was that if CCLS had acted as it should have done these cases would not have been issued or progressed and the costs incurred by the lenders would not have been sustained.
As for Mr Wright, the court decided not to make a non-party costs order against him. CCR was not itself the relevant claimant or defendant. Although CCR as a claims management company would benefit in the event of success, there was nothing improper in that. The claimants were genuine claimants who decided to make these claims. CCR was not itself the relevant claimant or defendant. The real causative factor on the issue of costs was the failure to obtain ATE, which was CCLS's fault not CCR or Mr Wright.
Mohammed Adris and others v The Royal Bank of Scotland plc and (1) Cartel Client Review Limited (2) Richard Burley trading as Consumer Credit Litigation Solicitors (3) Mr Carl Wright [2010] EWHC 941
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