Legal firms exploiting Grenfell-style cladding worries

Ryan Bembridge

July 3, 2019

Legal firms are urging leaseholders in flats with Grenfell-style cladding to claim against their developers – and they are said to be charging legal bills as high as £30,000 to fight the case.

London law firm Leigh Day said it has signed up 58 people at the New Capital Quay development in Greenwich, where the insurer of the building, National House Building Council, is paying for the cladding at the 11-block complex to be replaced and work has started.

However the law firm is contacting residents by email and letter, saying they have “strong claims” against the developer Galliard Homes and the site’s landlord Roamquest for “additional losses”. This would be for loss of income, reduction in property values, distress and inconvenience.

Under the terms being proposed by Leigh Day to handle the claims, leaseholders would have to commit to paying £1,000 up front, while the costs not covered by Leigh Day’s proposal could reach £30,000 each to fight the case.

Costs consultant Michael Kain, of Kain Knight, said: “This is ambulance chasing, basically. It’s a bit smelly the way they’ve gone about this, to approach everyone and say you may have a claim. Most solicitors wouldn’t do that.

“Whilst this form of client chasing does not breach any regulation, I would hate our profession to follow the path set in other countries.”

Another costs consultant branded the situation a “bean feast for their lawyers”.

According to letters sent to leaseholders, people selecting Leigh Day under its proposed conditional fee agreement would be liable for 50% of the base fees, with the other 50% fees being payable if they win.

Leaseholders may also have to fund expenses such as court fees, expert reports and counsel themselves.

Legal costs expert Mark Carlisle, director of checkmylegalfees.com, who reviewed the Leigh Day flyer distributed at New Capital Quay, warned that the up-front costs for leaseholders could be ‘substantial’.

He said: “Leigh Day are proposing what is known as a ‘discounted CFA’ i.e. 50% of their fee is payable only in the event of a win, but the other 50% must be paid in the usual way as the matter progresses.

“This would in all probability be done by the delivery of regular bills, which could be substantial.”

He estimated that under Leigh’s Day terms, the firm would need £14,000 from each resident on ongoing legal costs, £2,700 to cover the barrister and expert witnesses, and £10,000 for the premium for after the event insurance.

He added: “Their expenses could be very substantial, particularly if the developers deny liability which seems to be their position.

“Surprisingly Leigh Day also include the costs of counsel as an expense, whereas in many cases counsel would also be asked to undertake the work on a no win, no fee basis. If the case were to be hard fought, it is easy to see the overall disbursements exceeding £100,000.”

The letter to leaseholders tells them they can “also potentially put more pressure on the other side” if they claim as a group.

Leigh Day’s proposal claims that in previous building cases, awards for distress and inconvenience have amounted to £3,000 or less per affected year but that ‘it may be possible to get more in this case.’

In the months after the Grenfell Tower fire in which 72 people died, Leigh Day was accused of trying to benefit from the tragedy by putting up posters offering legal support to people affected. The firm later suspended two paralegals, saying ‘it would never have given authority for the posters or their display.’

Last year, Leigh Day and three of its lawyers, including its founding partner, Martyn Day, were acquitted of professional misconduct charges relating to allegations it made on behalf of clients that British soldiers murdered and tortured Iraqi civilians. Last month, the firm suspended one of its lawyers after he referred to Hitler in a joke on Twitter.

A Leigh Day spokeswoman told The Times that the leaseholders at National House Building Council had initiated contact.

She said: “We were asked to provide a written proposal. Our clients are fully aware of the cost of our services.”

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