Judge savages law firm over £6MILLION bill for tycoon
Lord says fees for case were illegal
A massive £6million fee charged by blue chip lawyers to their oil tycoon client has been declared illegal by a judge.
Levy & McRae had bil led businessman Rober t Kidd the seven- f igure sum af ter representing him in a successful damages claim against another firm of solicitors.
The £ 19million settlement figure was paid to the Glasgow firm – which passed it on to Kidd minus its hefty bill – which included £ 3million of “success fees” for winning the case.
Kidd, from Aberdeen, then launched a legal action against Levy & McRae, claiming it should not have charged him the success fees on top of its basic bill.
Now, in a published judgment, Lord Doherty has conf irmed that the fees were “illegal and unenforceable”.
He said the fees breached a legal principle designed to prevent conf lict of interest when a lawyer has a financial stake in the amount a client gets in compensation.
His 41-page judgment follows a £3million action raised by Kidd and his firm A& E Investments in 2018 at the Court of Session in Edinburgh against Levy & McRae and advocate Jonathan Brown over their fees.
The £ 6million sum included a basic fee to Levy & McRae of £ 2.1million plus a success fee of £1.89million. Jonathan Brown was paid £ 1.1mi l lion plus a success fee of £990,000.
Levy & McRae, which has a number of high-profile clients including ex-first minister Alex Salmond, plans to appeal.
A spokesman said: “The damages case we were asked to undertake by Mr Kidd was among the mos t challenging and highly complex seen in the
Scot t ish courts for many years. For that reason, before proceeding with the case, detailed discussions took place and advice was sought on proposed fee arrangements to ensure they complied with all necessary legislation.
“We were satisfied our billing agreement, which was the subject of negotiation between this firm and independent legal advisers for Mr Kidd, was appropriate.” Kidd has reported the firm and Brown to the Scottish Legal Complaints Commission (SLCC) and the Faculty of Advocates.
Lord Doherty said: “The substance of what was agreed was that the defenders’ (Levy & McRae and Jonathan Brown) remuneration would increase in proportion to the sum recovered.
“That gave them a clear pecuniary interest – a stake – in the amount recovered.
“In my view, that pecuniary interest created a conflict of interest which gave rise to an unacceptable risk that the proper administration of justice might be obstructed.”
In October 2018, we reported how Kidd had hired legal costs expert Jim Diamond to assess the fees charged by Levy & McRae and Brown.
His report said: “This is the worst case I have encountered for unjustified overbilling and/or lack of legal costs information and/or costs control.”
Levy & McRae and Brown were originally hired by Kidd in 2015 in a claim against Edinburgh solicitors Paull and Williamson.
The firm acted for him in the sale of his share of an Aberdeenbased oil services company, ITS Tubular Solutions, to US private equity firm Lime Rock Partners.
Kidd claims he suf fered f inancial losses as a result of advice they gave him.
The businessman said he was delighted with the Court of Session judgment in his favour.
Spokesman Diamond revealed he will be applying to recover the £ 2.9million in success fees. He added: “Mr Kidd is confident he will succeed at any such hearing.”
The SLCC and the Faculty of Advocates declined to comment. Jonathan Brown did not respond to our request for a comment.