Solicitor not in statement of expenses accounts

[PierreDe]

Hi all, I wanted some info for a friend who was taken to court by a Ltd company claimant. The Ltd company (after 1 year) went into administration, and the administrator failed to notify my friend or the court of their takeover, until it was noted at the trial by the Ltd company solicitor who told my friend and the court at that time.

My friend received a judgment against them, and the judgment was given in the ‘Ltd’ company name (without ‘in administration’) status at the end. The Ltd company then went into liquidation 2 months after judgment.

It has now been 3 years since the judgment, and the Ltd company solicitor is trying to enforce the judgment. My friend has tried contacting the liquidator, but they are ignoring them.

The thing we find strange is, that the ‘solicitor’s firm’ is not documented in any of the statement of expense accounts for the company in its administration or liquidation for the last 3 years, and the liquidator never enforced the judgment fir all this while.

The solicitor states they are on a private retainer with the liquidator, but they have no proof provided. Another solicitors firm is documented for obtaining other debts during the administration/liquidation stage, so we are finding this pretty weird.

Could the solicitor essentially take the judgment amount for themselves if the liquidator does not in fact believe a debt is owed to the Ltd company?

 

[ChrisCallaghan]

Given your other recent thread, it sounds like both you and your friend could do with seeking out a solicitor. Happy to make a recommendation should you need.

My friend received a judgment against them, and the judgment was given in the ‘Ltd’ company name (without ‘in administration’) status at the end. The Ltd company then went into liquidation 2 months after judgment.

If you are attempting to argue this could invalidate the claim, it doesn't. Nor does any of the other points you've raised about timing or how you've interpreted the liquidators report in relation to expenses.

The solicitor states they are on a private retainer with the liquidator

"Private retainer" seems an odd expression to me, but it's not uncommon for an IP to instruct a solicitor to collect any sums owed to a company in liquidation or administration.

My friend has tried contacting the liquidator, but they are ignoring them.

This is frustrating, as the IP should be able to answer/explain this situation. You'll typically find a complaints procedure process on the IPs website - follow that in the first instance. If that does not trigger a response, your friend could consider using the below:

Complain about an insolvency practitioner

How to complain about an insolvency practitioner - complain about unprofessional or unethical conduct or how your case has been handled.

www.gov.uk

I note that at no point do you mention in your comment that your friend disputes this debt? It sounds like they/you are looking for loopholes to avoid payment. If the debt is owed, and the liquidator has instructed a solicitor to act for them, the the likely reality is that your friend is going to have to come to an arrangement to pay this. If they feel they have grounds to dispute the validity of the claim, they need a solicitor.

 

[Lisa Thomas]

Hi all, I wanted some info for a friend who was taken to court by a Ltd company claimant. The Ltd company (after 1 year) went into administration, and the administrator failed to notify my friend or the court of their takeover, until it was noted at the trial by the Ltd company solicitor who told my friend and the court at that time.

FYI the Insolvency Practitioner relies on information passed to them by the accountants as to the company's creditors and debtors so this might not be due to the fault of the IP.

My friend received a judgment against them, and the judgment was given in the ‘Ltd’ company name (without ‘in administration’) status at the end. The Ltd company then went into liquidation 2 months after judgment.

It has now been 3 years since the judgment, and the Ltd company solicitor is trying to enforce the judgment. My friend has tried contacting the liquidator, but they are ignoring them.

I'm confused - you say above that your friend won the judgement against the limited company, so why would the Limited Company's solicitor be pursuing your friend to try and enforce the judgement?

Please explain - does your friend owe the company money, and if so how much?

Or does the company owe your friend the money, and if so how much?

The thing we find strange is, that the ‘solicitor’s firm’ is not documented in any of the statement of expense accounts for the company in its administration or liquidation for the last 3 years, and the liquidator never enforced the judgment fir all this while.

The solicitor states they are on a private retainer with the liquidator, but they have no proof provided. Another solicitors firm is documented for obtaining other debts during the administration/liquidation stage, so we are finding this pretty weird.

Could the solicitor essentially take the judgment amount for themselves if the liquidator does not in fact believe a debt is owed to the Ltd company?

 

[janeforman]

Hi, I am the party that my friend Pierre had been asking about.

A claim was issued by a company claimant, and then it subsequently went "into administration" 10 months prior to the trial. The Administrator did not make any contact with me or the court to advise of their undertaking, and the judgment was issued in the company claimant's name, without its status "in administration" registered upon it.

I did not win the claim in this matter, the claimant company did. I do not owe the claimant company any money however, and this is going through appeal at the moment.

The problem I have is that the claimant solicitor who was acting for the claimant at the "issue of the claim" does not appear in any of the 'statement of expense' accounts for the company during its administration or liquidation stages of the last 3 years. (At trial the barrister stated to the judge that their client 'the solicitors' were still to get paid for their fees, and the judge advised that they need to ask the 'Administrator' for this, on behalf of the claimant company) - it was a 'small claim' and they could not get their costs back from me. The claimant company then went into liquidation shortly after.

the claimant solicitors are now trying to enforce the judgment against me after 3 years, and have provided me with their 'bill of costs' for all the enforcement procedures their carried out in the last two months, of approximately £18,000. They have advised that they are held on a 'private retainer' with the now liquidators. What I want to know is what does "private retainer" mean?

Any help from an insolvency practitioner would be much appreciated. Thanks.

 

[Bobbo]

Hi, I am the party that my friend Pierre had been asking about.

A claim was issued by a company claimant, and then it subsequently went "into administration" 10 months prior to the trial. The Administrator did not make any contact with me or the court to advise of their undertaking, and the judgment was issued in the company claimant's name, without its status "in administration" registered upon it.

I did not win the claim in this matter, the claimant company did. I do not owe the claimant company any money however, and this is going through appeal at the moment.

The problem I have is that the claimant solicitor who was acting for the claimant at the "issue of the claim" does not appear in any of the 'statement of expense' accounts for the company during its administration or liquidation stages of the last 3 years. (At trial the barrister stated to the judge that their client 'the solicitors' were still to get paid for their fees, and the judge advised that they need to ask the 'Administrator' for this, on behalf of the claimant company) - it was a 'small claim' and they could not get their costs back from me. The claimant company then went into liquidation shortly after.

the claimant solicitors are now trying to enforce the judgment against me after 3 years, and have provided me with their 'bill of costs' for all the enforcement procedures their carried out in the last two months, of approximately £18,000. They have advised that they are held on a 'private retainer' with the now liquidators. What I want to know is what does "private retainer" mean?

Any help from an insolvency practitioner would be much appreciated. Thanks.

You say the solicitors are trying to enforce the judgment against you. You also say you do not owe the claimant company any money.

How can these both be true? If there was a judgment against you then surely you do owe the claimant money, pending your appeal. Presumably you are using the official appeal channels? If so I don't see how the solicitors could be carrying out enforcement procedures if the judgment is subject to a valid appeal.

 

[Lisa Thomas]

If I have understood you correctly:

1. The Company sued you and won.
2. The Company entered Administration.
3. The Company's solicitors are now pursuing you for payment of their costs in accordance with the terms of the court order.
4. Your complaint is that the solicitors costs are not disclosed on the Administrator's report as an expense incurred.

The crux of your complaint is 4) above.

Have I understood that correctly?

 

[janeforman]

It is subject to a valid appeal, but they are still trying to enforce, and harassing me with a bill of costs. Not sure how else I can explain that, because this is obviously harassment.

In any case, does any insolvency practitioner know what a "private retainer" is that they are under with the liquidators?


Thanks

 

[janeforman]

If I have understood you correctly:

1. The Company sued you and won.
2. The Company entered Administration.
3. The Company's solicitors are now pursuing you for payment of their costs in accordance with the terms of the court order.
4. Your complaint is that the solicitors costs are not disclosed on the Administrator's report as an expense incurred.

The crux of your complaint is 4) above.

Have I understood that correctly?

In those terms yes, but they are not on the statement of expenses for the liquidation either (all for over the 3 years). (Everyone else, are documented, including those that are paid, to be paid, and may require payment in the near future?) And also what does a "private retainer" with the liquidators mean? Thanks for your advice.

 

[janeforman]

In those terms yes, but they are not on the statement of expenses for the liquidation either (all for over the 3 years). (Everyone else, are documented, including those that are paid, to be paid, and may require payment in the near future?) And also what does a "private retainer" with the liquidators mean? Thanks for your advice.

But also, the court stated that as a result of a small claim, I am not subject to costs, and the solicitors would need to obtain that from the 'then Administrators' of the company, on behalf of the company.

 

[Lisa Thomas]

But also, the court stated that as a result of a small claim, I am not subject to costs, and the solicitors would need to obtain that from the 'then Administrators' of the company, on behalf of the company.

If that's correct then I'm not sure how they can be demanding that you pay them. Does it state this in the court order? If so, remind them of these terms.

It may be that the costs were incurred by the company's solicitors prior to Administration, so they would not be an expense of the Administration.

The pre Administration legal bill would likely be a creditor of the company.

 

[janeforman]

If that's correct then I'm not sure how they can be demanding that you pay them. Does it state this in the court order? If so, remind them of these terms.

It may be that the costs were incurred by the company's solicitors prior to Administration, so they would not be an expense of the Administration.

The pre Administration legal bill would likely be a creditor of the company.

Thank you for your reply.

"It may be that the costs were incurred by the company's solicitors prior to Administration, so they would not be an expense of the Administration" - but the claimant was "in administration" for 10 months prior to the trial, and they had conducted further proceedings during the 'administration' period of 10 months, and at trial the claimant was "in administration". I do not see how these costs remain undocumented as an 'expense' during the administration stage - any suggestions?

"The pre Administration legal bill would likely be a creditor of the company." - could you explain what this means?

Could you advise what it is meant by the claimant solicitors when they say they have been funded via a "private retainer" by the liquidators? Thanks you for your replies.

 

[Newchodge]

3. The Company's solicitors are now pursuing you for payment of their costs in accordance with the terms of the court order.

No. The Court did not award costs. The solicitor is trying to recover the costs they have expended in trying to get the OP to comply with the actual court order. How they could possibly have incurred £18,000 in costs is beyond me. Can the OP find out who the Liquidator is?

 

[janeforman]

yes, i know who the liquidator is, but they are not playing ball - ignored all my correspondence for many years! In any case, can someone advise me on a "private retainer" from a liquidator?

 

[Gyumri]

In any case, can someone advise me on a "private retainer" from a liquidator?

A retainer letter is simply an agreement between a solicitor and his or her client whereby a client retains, ie., instructs, a solicitor to act.

So in this case the liquidator has retained a solicitor to chase you for presumably some debt that you owed the company before it went into liquidation (although I confess I haven't read the details of this thread).

 

[janeforman]

Yes, that's what I thought, but how can a liquidator have "private retainer" with the solicitor. They can have a "private retainer" with a client like a 'personal retainer', but in this case, it edges towards a conflict of interest?

 

[Newchodge]

Yes, that's what I thought, but how can a liquidator have "private retainer" with the solicitor. They can have a "private retainer" with a client like a 'personal retainer', but in this case, it edges towards a conflict of interest?

I think you are worrying about the wrong issue. When is your appeal due to be listed?

 

[Lisa Thomas]

Thank you for your reply.

"It may be that the costs were incurred by the company's solicitors prior to Administration, so they would not be an expense of the Administration" - but the claimant was "in administration" for 10 months prior to the trial, and they had conducted further proceedings during the 'administration' period of 10 months, and at trial the claimant was "in administration". I do not see how these costs remain undocumented as an 'expense' during the administration stage - any suggestions?

Ah I see. Ask the Administrators.

"The pre Administration legal bill would likely be a creditor of the company." - could you explain what this means?

Had the claim concluded prior to Administration and the order included the company's costs, and for whatever reason you had not/do not pay the costs then the solicitors costs would have ranked as an unsecured creditor in the Administration. Meaning they would have to lodge a claim alongside all the other creditors and only be paid if a subsequent dividend became available to pay some money back to the creditors, after all the other costs, expenses, and preferential creditors had been paid.

Could you advise what it is meant by the claimant solicitors when they say they have been funded via a "private retainer" by the liquidators? Thanks you for your replies.

 

[Lisa Thomas]

No. The Court did not award costs. The solicitor is trying to recover the costs they have expended in trying to get the OP to comply with the actual court order. How they could possibly have incurred £18,000 in costs is beyond me. Can the OP find out who the Liquidator is?

Depends on how complicated the hearing/s was/were, how many times it's been adjourned etc, which court it was in, whether counsel/barristers etc had to be hired... OP needs to ask for a breakdown if they haven't had it.

 

[Newchodge]

Depends on how complicated the hearing/s was/were, how many times it's been adjourned etc, which court it was in, whether counsel/barristers etc had to be hired... OP needs to ask for a breakdown if they haven't had it.

See message #4

it was a 'small claim' and they could not get their costs back from me.

 

[Lisa Thomas]

Does seem high in that case. OP needs to ask for a breakdown and if they don't think they are responsible, to dispute it/ask the solicitors to prove what entitles them to claim from them.

 

[janeforman]

This may be irrelevant here, but in any case, could someone advise what it is meant by the claimant solicitors when they state in the bill of costs that they have been funded via a "private retainer" by the liquidators themselves? I think this leads to a conflict of interest. Thanks.

 

[Lisa Thomas]

It probably just means the Liquidator has agreed a deal as regards any shortfall on the solicitors fees if they can't recover them from the company or debtor.

 

[PierreDe]

It probably just means the Liquidator has agreed a deal as regards any shortfall on the solicitors fees if they can't recover them from the company or debtor.

Agreed a deal? A ‘personal deal’ under via private retainer. Looks like a conflict of interest to me. What liquidator would agree a deal personally?

 

[PierreDe]

In any case, why would a liquidator give a private retainer for fees which are in excess of £18,000, and the ‘allged debt’ is only worth £7,000? Somethings not right here!

 

[Newchodge]

In any case, why would a liquidator give a private retainer for fees which are in excess of £18,000, and the ‘allged debt’ is only worth £7,000? Somethings not right here!

IF the judgment is being appealed, the OP merely refuses to do anything about the 'debt' until the appeal has been decided. The appeal is what matters. You appear to be looking for a non-existent loophole, rather than focussing on what matters.

 

[PierreDe]

IF the judgment is being appealed, the OP merely refuses to do anything about the 'debt' until the appeal has been decided. The appeal is what matters. You appear to be looking for a non-existent loophole, rather than focussing on what matters.

You are correct in that regard, but for my own understanding, I’d like to know why a liquidator would in any case, give a ‘private retainer’ to a solicitor? Whether for this matter or any other matter? Thanks

 

[PierreDe]

I would not say however this is a non existent loophole, if the solicitor fails to appear in ‘any’ of the statement of expense accounts (and is not documented as a creditor of the company either), it would suggest that they are ‘not formally instructed’. So then, we have this so called “private retainer”.

 

[Newchodge]

You are correct in that regard, but for my own understanding, I’d like to know why a liquidator would in any case, give a ‘private retainer’ to a solicitor? Whether for this matter or any other matter? Thanks

Because the Liquidator has instructed the solicitor to recover the monies owed. A bit like instructing a debt collector. It is normal practice.

 

[Newchodge]

I would not say however this is a non existent loophole, if the solicitor fails to appear in ‘any’ of the statement of expense accounts (and is not documented as a creditor of the company either), it would suggest that they are ‘not formally instructed’. So then, we have this so called “private retainer”.

So what? Until the solicitor issues a bill, there is no expense and no creditor.

 

[Gyumri]

I don't see how the solicitors could be carrying out enforcement procedures if the judgment is subject to a valid appeal.

There is no stay pending appeals. That is the default position. The OP should have included in an application for permission to appeal an application for a stay of enforcement pending the outcome of permission to appeal (assuming that she needed to obtain permission). However the OP can make a separate application for a stay if the solicitor won't voluntarily agree to a stay.

Bear in mind that the solicitor cannot seek any charges himself from the OP for enforcement no matter how much he may puff and blow.

It is subject to a valid appeal, but they are still trying to enforce, and harassing me with a bill of costs. Not sure how else I can explain that, because this is obviously harassment.

See above.

How they could possibly have incurred £18,000 in costs is beyond me.

@£450 per hour.

could someone advise what it is meant by the claimant solicitors when they state in the bill of costs that they have been funded via a "private retainer" by the liquidators

The bill of costs would relate to the legal costs incurred by the claimant company or the administrator who took over the proceedings. It has been presented by the solicitors appointed by the liquidator and would have given you 21 days to serve on them your points of dispute. They would then be thrashed out at a detailed assessment hearing if not agreed. Such hearings can take place if the liquidator requests such a hearing but in this if the OP has no assets then the exercise would be pointless.

What liquidator would agree a deal personally?

Liquidators appear to be able to cut a deal with creditors so as to earn a commission on the recovery of debts. I don't agree with that loophole but it seems perfectly proper for such arrangements to be made, I suppose because creditors want their money and are prepared to motivate the liquidator with some extra reward.

In any case, why would a liquidator give a private retainer for fees which are in excess of £18,000, and the ‘allged debt’ is only worth £7,000? Somethings not right here!

The solicitors who are acting for the liquidator and who may also have acted for the company or administrator for the trial are trying to recover the trial costs as presented in their bill of costs - which may easily be as much if not more than the judgment debt.

They cannot run up any extra costs in enforcing the judgment debt as those can only be charged by a bailiff or high court endorsement officer according to a statutory scale of charges.

If the solicitor is running up charges by acting for the liquidator in trying to recover the judgment debt themselves for the benefit of the liquidation then they cannot be recovered from the OP as they are merely expenses of the liquidation. So regardless of how many letters the solicitor writes to the OP she cannot be charged for such work.

 

[Gyumri]

The OP must serve points of dispute asap - even if the 21 days has expired - to the bill of costs as that would prevent a default costs certificate being issued for the full amount of the bill which will be an added headache.

 

[PierreDe]

“Liquidators appear to be able to cut a deal with creditors so as to earn a commission on the recovery of debts. I don't agree with that loophole but it seems perfectly proper for such arrangements to be made, I suppose because creditors want their money and are prepared to motivate the liquidator with some extra reward.”

The company owner has confirmed that a debt was never owed to the company, the claim was undertaken solely by an ‘employee’ of the company before its administration. The creditor ‘the only creditor’ has had dealings with the company over a number of years, and also confirms that the debt is not owed.

Private retainer tho, this work is supposed to be on a ‘general retainer’. Plus, the debt collector is the ‘solicitors daughter’ whose company is set to get 45% of the judgment amount.

 

[Newchodge]

“Liquidators appear to be able to cut a deal with creditors so as to earn a commission on the recovery of debts. I don't agree with that loophole but it seems perfectly proper for such arrangements to be made, I suppose because creditors want their money and are prepared to motivate the liquidator with some extra reward.”

The company owner has confirmed that a debt was never owed to the company, the claim was undertaken solely by an ‘employee’ of the company before its administration. The creditor ‘the only creditor’ has had dealings with the company over a number of years, and also confirms that the debt is not owed.

Private retainer tho, this work is supposed to be on a ‘general retainer’. Plus, the debt collector is the ‘solicitors daughter’ whose company is set to get 45% of the judgment amount.

Report the fraudulent claim to the police and ask the company ownder to sign an affidavit to the effect of what has been said.

For the rest, so what?

 

[PierreDe]

Already reported to the police. Ip insolvency says that the liquidator has no duty to look into this, which I fail ti believe!

 

[PierreDe]

Just to say, it was initially reported to Action Fraud three times, but they said that they fraud was too serious for them to handle!

 

[PierreDe]

We have an affidavit already

 

[Newchodge]

We have an affidavit already

And the police, who are investigating this fraud, have a copy?

Have you written to the solicitor, enclosing a copy and explaining that the debt alleged is fraudulent and they should stop trying to enforce it?

 

[PierreDe]

To the solicitor! It looks like an unlawful means conspiracy, because we also ‘just’ found that the liquidator’s ‘solicitor’ had forged evidence in this matter, stating at trial that it came from ‘the company owner’ (with his signature). But the company owner’s affidavit further states that the evidence was “not from him!”

 

[PierreDe]

And just to add, that all the ‘evidence’ was sent to a district and then appeal judge at the county who dismissed it all, stating that it has been ‘too long’ since the trial! So the law that is “supposed” to protect, is essentially allowing ‘criminals’ to get away with ‘fraud’ because the civil courts are unwilling to look at it!

 

[PierreDe]

And in the meantime, the so called ‘solicitor’ is trying to enforce the judgment they received through fraudulent means!