Michael Wilson & Partners Limited v John Forster Emmott & Ors
[2024] EWHC 449 (Comm)
Michael Wilson & Partners Limited v John Forster Emmott
9 May 2023
[2023] EWHC 1005 (Comm)
High Court
A company tried to get unpaid legal costs from a client. The client argued the company didn't follow the right rules to get the costs and also that he could deduct the money from what the company owed him. The judge agreed with the client. The company appealed but lost because they hadn't followed the rules for getting the costs and the client hadn't actually officially deducted anything yet.
Key Facts
- •Michael Wilson & Partners Limited (MWP) appealed an order setting aside a default costs certificate.
- •The default costs certificate was issued against John Forster Emmott for £158,505.34 in arbitral costs.
- •Emmott argued the certificate was issued without jurisdiction because MWP hadn't sought cost assessment from the tribunal as required by s.63(4) of the Arbitration Act 1996.
- •Emmott also asserted a right of set-off against sums owed to him by MWP.
- •MWP argued Emmott waived his right to challenge the certificate by subsequently attempting to set off the amount.
- •The Master set aside the default costs certificate, finding MWP lacked jurisdiction.
Legal Principles
A party can waive a jurisdictional defect.
Brims Construction Limited v. A2M Development Limited [2013] EWHC 3262 (TCC)
Set-off does not extinguish liability until agreement, judgment, or arbitral award.
Stemcor UK Limited v. Global Steel Holdings [2015] EWHC 363 (Comm) and Brown-Forman Beverages Europe Limited v. Bacardi UK Limited [2021] EWHC 1259 (Comm)
Section 63(4) of the Arbitration Act 1996 requires a party to seek cost assessment from the tribunal before applying to the court.
Arbitration Act 1996
CPR 47.12(1) allows the court to set aside a default costs certificate.
CPR 47.12(1)
Outcomes
Appeal dismissed.
Emmott did not waive his right to challenge the certificate's jurisdiction; the set-off argument was premature as no agreement or judgment existed to effect a set-off.