High Court: Law Firm “Sufficiently Well-Funded” To Cope with Freezing Order Over ₤ 2m In Fees in Its Client Account
Leading litigation company Stewarts Law is “adequately well-funded” to deal with ₤ 2m meant to pay its costs and dispensations sitting frozen in its customer account, while the real owner of the cash is recognized, the High Court has actually ruled.
Mr Justice Popplewell last month dismissed the company’s effort to release a freezing order over the cash, which it has actually held since September 2016, so it might be moved to workplace account.
He stated the unfavorable repercussions to Stewarts Law of keeping the freezing order for the time being were “fairly small and quickly made up for”. There is no recommendation that the company has actually done anything incorrect.
In Phoenix Group Foundation v Cochrane & Anor  EWHC 418 (Comm), James Drake QC had actually argued on behalf of the company that there was no danger of Stewarts, “a well-funded and recognized company of lawyers”, being not able to pay back the ₤ 2m if it were unfrozen.
The judge stated that, if this held true, “it is challenging to see how Stewarts Law would be considerably prejudiced in the conduct of its business if it is required to bypass making use of that ₤ 2m in between now and trial. It is intresting for you to know more at elitelawyermanagement.com.
“What is being stated in either possibility is that the company is and will be adequately well moneyed to be able to take in the loss of ₤ 2m in regard of unsettled costs and paid dispensations. Loss of use of the cash is easily measurable by an interest computation which can be properly protected under the cross-undertaking.”.
By contrast, Popplewell J stated there was “genuine and significant danger of bias” to the complaintant, a Panamanian company, if the freezing order was not continued.
The judge stated the ₤ 2m represented the profits, or part of them, from an advancement website in Prandoty Street, Kracow, Poland. There are other plaintiffs to the cash too.
” The real owner’s claim for return of the ₤ 2m, which is most likely to be an exclusive one, might effectively be prejudiced by Stewarts Law now being allowed to move the cash from its present place and invest it.
“An exclusive claim to exactly what is now an amount which is recognizable and frozen as that gotten from the sale of Prandoty Street would be ruined and some basis for a personal claim would have to be developed versus Stewarts Law.”.
The High Court heard that the ₤ 2m was paid to Stewarts Law by Litigation Capital Limited (LCL), which had actually dedicated to funding the law practice’s charges in connected but “prolonged and hard-fought” commercial litigation.
Stewarts Law got the cash in “part payment” of costs and dispensations amounting to over ₤ 4.3 m.
The freezing order was made by Mr Justice Newey before completion of September, and continued by Mrs Justice Rose the following month.
With the situations where the cash was paid to Stewarts “nontransparent”, Popplewell J stated there were triable problems before him, consisting of whether LCL had any privilege to the cash, while there was a “great feasible case” that Stewarts was not entitled to get the cash from the real owner for the specified function.
Stewarts decreased to comment as procedures were continuous.