The Court of Appeal recently held in Alpha Rocks Solicitors v Alade [2015] EWCA Civ 685 held that the court should exercise caution in the early stages of a case in striking out the entirety of a claim on the grounds that a part had been improperly or even fraudulently exaggerated.

The Court (Moore-Bick, Fulford, Vos LJJ) made reference to the draconian nature of the power and the risk that at trial, events may appear less clear cut than at an interlocutory stage. It was held that the emphasis should be on the availability of fair trial of the issues between the parties.

Alpha Rocks Solicitors appealed a decision on 4 November 2014 by a deputy judge of the Chancery Division to strike out claims in their entirety for two of the bills of costs presented to its client, the defendant as an abuse of process. Below, it was found that one of the two of the bills was partly false and deliberately exaggerated, and another was brought on the basis of fabricated documents and of a bill of costs that was known to be inaccurate. At a hearing at which only submissions were heard, findings were made under CPR r 3.4(2)(b) and under the inherent jurisdiction of the court.

Lord Justice Vos (with whom the other Lord Justices agreed) held that both of the main authorities dealing with a strike out of the present kind (Masood v Zahoor (Practice Note) [2010] 1 WLR 746 & Summers v Fairclough Homes Ltd [2012] 1 WLR 2004), the applications to strike out were made after a trial, rather than at an interlocutory stage. The starting point, it was held was to consider the range of available remedies when it was alleged that a party had exaggerated his claim, fraudulently or otherwise. These include adverse costs awards, interest penalties and proceedings for contempt of court or criminal prosecution.

It was held that striking out was available in such cases at an early stage in the proceedings, only where a claimant’s misconduct was so serious that it would be an affront to the court to permit him to continue to prosecute the claim, and where the claim should be struck in order to prevent the further waste of resources on proceedings which the claimant had forfeited the right to have determined. Vos LJ held that it had to be remembered that the remedy should be proportionate to the abuse in question.

It was also emphasised that litigants should not be deprived of their claims unless the abuse relied upon had been clearly established and this was inter-related with the question of whether a fair trial remained possible.

In this case, the fact that solicitors signed bills that appeared to have been inaccurate (or worse) was manifestly concerning, but that concern did not abrogate the need for the issue of whether the bills were indeed inaccurate to be fairly resolved between the parties, if that remained possible.

Applying those principles to the facts the Court of Appeal held that it had been wrong to strike out the claims.

The short Weekly Law Report’s case report is available online http://cases.iclr.co.uk/Subscr/search.aspx?path=WLR%20Dailies/WLRD%202011/wlrd2015-308.