Alpha Rocks Solicitors v Alade

Factual and Procedural Background

This case concerns a claim by a firm of solicitors ("the solicitors") to recover their costs and expenses from their client ("the client"), who alleges that the solicitors' bills were fraudulently exaggerated or misstated. The solicitors issued two separate bills for fees related to distinct litigation: one concerning a claim in a county court brought by the client's brother regarding property ("the first claim"), and another concerning a claim before the Land Registry Adjudicator brought by the client's spouse regarding a home rights notice ("the second claim"). The fees in dispute were £131,514.56 for the first claim and £43,732.50 for the second claim.

A deputy judge of the Chancery Division found on a strike out application, based solely on written evidence and documents without oral evidence, that parts of the solicitors' bills were partly false, deliberately exaggerated, or based on fabricated documents. The judge struck out the solicitors' claims for the entirety of the fees related to both claims, although other smaller fee claims were left intact. The judge acknowledged the draconian nature of this step but justified it on the basis of serious abuse of court procedure and the risk of an unfair trial. The solicitors appealed this decision on five main grounds, including claims that the strike out application was itself an abuse, that a mini-trial was wrongly conducted, and that the judge misunderstood certain billing details.

Legal Issues Presented

1. When is it appropriate to strike out a claim on the grounds that the claimant has abused the process of the court?
2. Whether a strike out application can be made at an early stage without oral evidence or a full trial, especially in cases alleging fraudulent exaggeration of claims.
3. Whether the judge erred in conducting what amounted to a mini-trial without hearing witnesses or allowing cross-examination.
4. Whether striking out entire claims for fees was proportionate given the alleged inaccuracies and exaggerations.
5. Whether the solicitors' bills were knowingly inaccurate or fabricated, justifying the strike out.

Arguments of the Parties

Appellants' (Solicitors') Arguments

• The strike out application was itself an abuse of process.
• The judge should not have conducted a mini-trial without oral evidence or cross-examination.
• The judge was incorrect to find that the solicitors had not prepared trial bundles for the first claim and the strike out order was disproportionate.
• The second claim's bill should not have been struck out as the judge misunderstood the meaning of "paid counsel".
• The costs and other orders made by the judge were challenged on several grounds.

Respondent's (Client's) Arguments

• The strike out was justified due to deliberate exaggeration and fabrication in the solicitors' bills.
• The judge was correct to avoid a mini-trial but found clear evidence that no trial bundles were prepared by the solicitors in the first claim.
• The 6-page bill in the second claim was knowingly inaccurate and backdated.
• Striking out the claims was proportionate to prevent waste of court resources and because the solicitors' signature on the bills could not be relied upon.

Table of Precedents Cited

Court's Reasoning and Analysis

The court acknowledged the serious nature of the allegations against the solicitors but found that the deputy judge erred by conducting what amounted to a mini-trial without oral evidence or cross-examination, despite repeated warnings against doing so. The court emphasised the difficulty of establishing fraud without a full trial and noted that conflicting evidence between parties could not be resolved fairly at an interlocutory stage solely on documentary evidence.

The judge failed to consider whether striking out the entirety of the claims was proportionate given that the alleged exaggerated or inaccurate parts represented only a relatively small percentage of the total fees. The judge also did not provide sufficient reasons for concluding that a fair trial would be impossible or that it would be unfair to require a detailed assessment of the bills.

The court highlighted that while fraudulent conduct is serious and may justify penalties such as costs sanctions or contempt proceedings, it does not automatically justify striking out claims without a proper trial. The court underscored that the overriding objective requires litigation to be conducted efficiently and fairly, and that remedies must be proportionate to the abuse alleged.

Finally, the court recommended that the solicitors be given an opportunity to revise their bills to address the contested items. If they refuse, the issues of exaggeration, falsification, and fabricated documentation should be resolved through disclosure, oral evidence, and a proper trial process. The case should be remitted to a Chancery judge for directions on how to proceed, including whether a detailed costs assessment or trial is appropriate.

Holding and Implications

The court ALLOWED THE APPEAL and set aside the strike out order and associated costs orders made by the deputy judge. The direct effect is that the solicitors' claims for the disputed fees are not struck out at this stage and must be subject to further proceedings including disclosure, oral evidence, and potentially a trial or detailed assessment.

No new precedent was established. The decision reinforces the principle that striking out claims for abuse of process or fraud is a draconian remedy reserved for very exceptional circumstances and should not be exercised without a full and fair trial where conflicting evidence exists. The judgment underscores the importance of proportionality, procedural fairness, and the availability of alternative remedies such as costs sanctions and contempt proceedings.