Upcoming Interlocutory Hearing to Consider Strike Out of NIHL Claims Handled by Heptonstalls Solicitors for Payment of Incorrect Court Fee

Has claimant industrial disease firm, Heptonstalls Solicitors, been undervaluing claims to pay lesser Court fees?

Since 2014, Heptonstalls has issued 80 Claim Forms, in respect of 80 noise-induced hearing loss (NIHL) claims (including several where BC Legal is instructed to act for defendants), and paid £205 on each occasion to do so.

For all of these claims, the issued Claim Form specified that the value of claim would not exceed £5,000, which is the upper limit for a £205 Court fee (£3,000 to £5,000).

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However, when supplementary Particulars of Claim were served with proceedings, it became apparent that the claimants were, in fact, seeking damages not exceeding £25,000.

For claims valued between £10,000 and £100,000, the appropriate fee is 5% of the claim. Thus, for all 80 NIHL claims that Heptonstalls was pursuing, the relevant Court fee was £1,250, not £205.

Heptonstalls’ practice of paying the incorrect Court fee, on a repetitive basis, was spotted by District Judge Clarke, at Burnley County Court. The affected claimant has been asked, by way of Court Order (dated 29 August 2019), to show cause as to why their case ought not to be struck out as an abuse of process, pursuant to CPR 3.4(2)(b).

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By no later than 28 August 2019, the Heptonstalls partner responsible for supervising the claimant’s claim will file and serve a witness statement explaining ‘why the Claimant failed without an order of the Court to pay the appropriate issue fee’ and why 79 other claimants made the same mistake.

An interlocutory hearing has been listed for Monday 30 September 2019, before Her Honour Judge Beech, at Preston County Court.

The Court has requested that BC Legal nominate a single representative, in respect of each case (in which we are acting), to attend the hearing.

At the hearing, the Heptonstalls partner in attendance will likely be cross-examined upon his or her evidence.

Until the designated Civil Judge for Lancashire has made her decision on whether to strike out the claimant’s claim, all proceedings tied up in this action have been stayed.

What is the likely outcome of the interlocutory hearing?

Defendants have sought to strike-out claims/obtain summary judgment in the following line of cases (with varying levels of success):

These decisions have been reported previously in editions 161 (here), 169 (here), 190 (here), 214 (here) and 238 (here) of BC Disease News.

Most recently, in the case of Atha, Mr. Justice Turner reasoned that:

‘The ordinary and proper use of the court process when providing the statement of value on a claim form involves the recording of the unvarnished truth. Deliberately departing from this ordinary and proper use for tactical reasons, such as removing the risk that the issue fee may subsequently be challenged when costs are being assessed, is significantly different from the ordinary and proper use of the court process’.

However, despite accepting, as other judges had accepted before him, that payment of an incorrect Court fee can amount to an abuse of process, strike out may be ‘too draconian’ (see Cross) and must be balanced against the overriding objective, as was expounded by Mr. Justice Stuart-Smith, in Dixon:

‘... the payment of fees is a matter for the benefit of the Court and is very largely irrelevant to the opposing parties. When asked what actual prejudice their clients had suffered as a result of the asserted underpayment of issue fees in this case, Counsel for [the Defendants] were unable to identify any substantial prejudice at all. The best that could be suggested was that the underpayment of issue fees left the Claimants more money with which to fight the Defendants. In the context of the overall costs of this action, that suggestion pales into insignificance’.

Context is therefore of undoubted importance if a Court is to find that there has been an abuse of its process where incorrect fees have been paid.

In Lewis, the Court ruled that distinguishing abuse of process for this type of breach will depend upon:

‘... the Relationship between the amount of the claim as valued on the Claim Form, the appropriate court fee applicable to that value, and the true value of the claim as it ought to have been known to the relevant solicitor’.

As such, the cumulative effect of Heptonstalls underpaying the Court 80 times in the past 5 years may this time warrant strike-out, where isolated ‘mistakes’ in the past have not.