Author: Chris

The recent judgment of Minkin v Landsberg [2015] EWCA Civ 1152 is a major milestone for those lawyers wishing to work on an unbundled, or limited scope retainer.

Jackson LJ traverses the key authorities on the scope of a solicitor’s retainer and draws together (pp.38-39) the key issues to consider when drawing up terms for limited scope instructions.

Those issues include a reasonable element of cutting one’s cloth to fit the client. Therefore, the duty (p.38(ii)) to raise incidental matters is varied by the experience of the client (p.38(iii)) and certainly, for an inexperienced client the solicitor would be expected to raise issues which are apparent to the solicitor but the client may not be aware of. Whereas a more sophisticated client would not wish to pay for advice regarding risks which he is well aware of.

Pivotally (and remembering all those issues of the law of contract) the court was keen to stress that such limitations should be reduced to clear and unambiguous writing. Jackson LJ at p.41 gives possibly the most stern warning he can in that he considered himself unable to go behind the district judge’s finding of fact that a contract had been formed with an agreed limitation of scope – it seems that had this not occurred he would have been loath to find such a limitation without it having been reduced to clear writing. As a practical issue for a firm looking to take advantage of this it would probably be worth spending money on good counsel to settle standard terms in plain English as a risk management exercise.

The court appears to have been very conscious that modern access to legal assistance (this was a case regarding the old Legal Help scheme) requires lawyers to be able to accept instructions to perform a discrete task rather than a traditional retainer.

This judgment appears to be a major step forward for solicitors (and barristers) whose clients are not always willing or able to pay for a full service but can benefit from advice, drafting and advocacy from a lawyer at appropriate times.

The Law Society has published a Practice Note on Unbundling Civil Legal Services which outlines what it considers the necessary steps and, as in this case, stresses the importance of two key issues:

1. Is an unbundled service right for the client; and, if so
2. Is the scope of work being performed clearly delineated and understood by the client.

The first of these is familiar to any direct access barrister – if the client is not reasonably capable of handling the matter themselves then it is difficult to justify the appropriateness  of providing unbundled legal assistance and must be considered very carefully.

The latter is more an issue of communication and whilst an unbundled retainer to, for example, “represent the client at an application hearing” may sound simple and clear it must be clearly spelled out what is involved. This is to ensure that the client knows exactly what their responsibilities are and what the lawyer will do. Taking this example, it must be absolutely clear who is responsible for:

1. Preparing the bundle
2. Preparing a skeleton
3. Communicating with the other side
4. Providing the court with notification that the lawyer is only acting as an advocate
5. Complying with the order made
6. Drawing up the order

Of these, the odd numbered items may logically be the responsibility of the litigant in person whilst the even numbered items would be placed on the advocate. However, when the person instructing the advocate is not another lawyer this cannot be left uncertain.

There are pitfalls in this kind of approach to providing legal services, but an acknowledgement at this level that it is acceptable is a major step forward.

Not a common complaint, however, on this occasion the SRA appealed the sentence to the High Court in the case of SRA v Ali Chan and Abode Solicitors Ltd [2015] EWHC 2659 (Admin).

The directors of Abode (and 1st and 2nd respondents) were solicitors who, through Abode (3rd respondent), introduced a great many of their clients to SDLT avoidance schemes. They were prosecuted before the Solicitors Disciplinary Tribunal which fined each of them £15,000 and the SRA appealed seeking further findings of facts and failures which render the respondents unfit to practice – and therefore that they should be struck off.

The respondents earned nearly £1m in commissions and referral fees for these SDLT avoidance schemes, not including their own conveyancing charges.

The schemes all involved artificial transactions, to effect legal loopholes in the relevant taxation provisions. In each case there is an intermediate transaction, or a final option transaction, which brings into effect a tax relief provision. Some of these had the benefit of advice from counsel in general terms but, despite one of these making it clear that cooperation of the lender was necessary, the lender (also a client of the solicitors) was kept in the dark.

In July 2011 counsel advised that sub-sale schemes (which accounted for 2 of the 4 structures) were open to real risk of challenge by the Revenue.

These schemes, using artificial and uncommercial structures – and which may expose purchasers to other risks – have been challenged by the Revenue and even legislated retrospectively against in some cases.

This case is the appeal of the Solicitors Disciplinary Tribunal decision to the QBD’s Divisional Court therefore is bounded by the findings of fact before the SDT and could only overturn the conclusions made by the SDT where the basis for such decisions was unsound.

What the DIvisional Court did decide was that the findings of fact set out a clear basis to find that the respondents had acted with a lack of independence and want of integrity therefore the conclusions of the SDT were unsound. Particular reference is made to the risks in the husband and wife scheme of one spouse only holding 1% of the equity; or the option scheme being a blot on the title; both of which are potentially larger than the SDLT saved.

Having reached these conclusions (and set out which allegations it considered proved) the court remitted the issue of sentence to the SDT.

A reminder to both solicitors to be cautious in effecting such schemes without giving proper and full advice (and at a minimum paying heed to the SRA Warning Notice) and also to those thinking of mitigating tax to take full and complete advice rather than off-the-shelf solutions.

In Chinnock v Wasborough & Ors [2015] EWCA Civ 441 Jackson LJ gave a clear and robust judgement on two issues in the law of professional negligence namely limitation and negative advice.

The substance of this case is unusual – whether in professional judgement of the solicitors and barrister was incorrect. This was doubly unusual in that the original case concerned a clinical negligence matter which was ended on advice in 2001, therefore carefully judged by the law of clinical negligence at the time. However Jackson LJ gives all lawyers some support in paragraph 77:

77. It is frequently the duty of lawyers to give unwelcome advice to their clients. If they conclude that a claim or a defence has no real prospect of success, it is their duty to say so bluntly. It is no kindness to the client to soften the advice or to encourage them to press on anyway. Ms Markland did no more and no less than was her duty, when she wrote the discouraging letter to Ms Chinnock on 16^th July 2001.

This against a background of a competently undertaken conference with experts exploring the prospects of success. Whilst it can be necessary to soften the blow, it does a client no good to maintain a case that has no realistic prospects of success. It is of course open to any such client to obtain a further opinion even on short notice if unhappy with advice.

Jackson LJ’s key propositions to be able to analyse limitation in this case were:

i) The advice which counsel and solicitors gave to Ms Chinnock was wrong. Contrary to that advice, on the law as it stood in 2001, Ms Chinnock did have a viable cause of action against the NHS Trust for wrongful birth.

ii) The error made by the solicitors and counsel was negligent. It was not merely an instance of lawyers taking a reasonable but incorrect view of matters (as often happens, for example when one party loses a case or when a judge’s decision is reversed on appeal).

Both of which contradict the substantive findings, but the second of these is an important reminder that a reasonable but incorrect view is not necessarily negligent – were that untrue then any lawyer who lost his client’s case would in theory be negligent.

Limitation is often seen as a generally settled area of law following Haward v Fawcetts but still raises occasional appeal questions, such as this one on knowledge. At first instance the court followed the knowledge point fairly strictly finding actual knowledge, as summarised by Jackson LJ:

iv) The primary limitation period expired in 2007. Therefore Ms Chinnock needed to rely on section 14A of the Limitation Act 1980. For the purposes of section 14A Ms Chinnock knew all material facts in 2001. She knew the identity of Veale Wasbrough and Ms Rea. She knew that she was not pursuing her claim against the NHS Trust because of the lawyers’ advice. All that she did not know was that the advice was negligent. Knowing or not knowing that conduct is negligent is irrelevant for the purposes of section 14A by reason of sub-section (9). Therefore Ms Chinnock’s claim was statute barred.

However, this analysis of actual knowledge was found incorrect by Jackson LJ (pp.80-92) who found a lack of actual knowledge and lack of knowledge of either of those two propositions.

By reason of Section 14A(9) lack of knowledge of proposition 2 does not prevent time from running; however:

88. Did Ms Chinnock need to know proposition 1 in order for time to start to run under section 14A? In my view she did. The word “negligence” in section 14A (9) means negligence of the current defendant or of a person for whose conduct that defendant is liable, for example an employee. “Negligence” does not embrace the negligence of some third party in an adversarial relationship with the defendant now being sued.

89. In the present case, therefore, time did not start to run against Ms Chinnock until she knew, or ought to have known, that she had lost a viable cause of action against the NHS Trust. I do not agree with the judge that Ms Chinnock had actual knowledge for the purposes of section 14A in 2001. In my view the correct analysis is that the claimant had constructive knowledge of proposition 1 by reason of section 14A (10).

Notwithstanding that Ms Chinnock did not have actual knowledge, this leads directly to the conclusion that Ms Chinnock did have constructive knowledge under s.14A(10), particularly by reference to Forbes v Wandsworth Health Authority [1997] QB 402:

90. This case is conceptually similar to Forbes. Ms Chinnock was deeply unhappy with the legal advice which she received in 2001. According to her evidence she was dumbfounded. She therefore had a choice. She could either consult other lawyers or she could let matters rest. Obviously Ms Chinnock could not be expected to take and act on fresh legal advice during the four week period before the claim form against the NHS Trust expired. But she could be expected to do so well before the primary limitation period against the lawyers expired.

91. I do not think that it was open to Ms Chinnock to abstain from further inquiries for more than six years (in this case eight years) and then to seek legal advice. It is true that during 2009 a firm of solicitors acting in the divorce proceedings happened to ask the husband if advice was required on any other matter. That, however, is not a justification for waiting eight years before taking legal advice.

Longmore LJ added:

108. There is some tension between Forbes v Wandsworth Health Authority [1997] QB 402 and Oakes v Hopcroft [2000] Lloyd’s Rep PN 946. In my view, the former authority should be preferred. It was expressly approved by the House of Lords in Adams v Bracknell Forest Borough Council [2005] 1 A.C. 76 at paragraphs 42-45 per Lord Hoffmann and is consistent with the analysis in the later House of Lords case of Howard v Fawcetts [2006] 1 WLR 682 as summarised by my Lord in paragraph 86 of his judgment.

109. On the matter of actual knowledge which divides my Lords, any view I express will be obiter but, as presently advised, I agree with Jackson LJ that “negligence” in section 14A(9) means negligence of the defendant or of a person for whom he or she is responsible rather than the negligence of someone else. Ms Chinnock did not know what my Lord has called “proposition 1” but she had every opportunity to obtain that knowledge before the claim against the defendants became time-barred. She therefore had constructive knowledge for the purposes of section 14A(10) of the 1980 Act.

Notably however Roth LJ had a different view of this analysis of limitation:

104. I respectfully agree with Jackson LJ that this approach, as succinctly expressed in the judgment below, was flawed. As Haward v Fawcetts makes clear, in order for the special period of limitation to start, it is necessary for Ms Chinnock to have had knowledge of (or to have reasonably been able to discover) the facts which can fairly be described as constituting the negligence of which she complains; or to adopt another formulation, knowledge of the acts or omissions that are causally relevant for her complaint: see, e.g., the speech of Lord Mance at [120]. Here, given the way her case was presented on this appeal, Ms Chinnock therefore needed to know (a) that the risk of trisomy revealed by 20 October 1997 scan was 1:13; (b) the comments made by the radiologist in his report on the scan of 18 February 1998; and (c) that neither of these were communicated to her at the time. However, she had become aware of (a) and (b) by the time of the conference with her lawyers on 13 July 2001, and she was self-evidently aware of (c).

105. What Ms Chinnock did not know was that the doctors were under a duty to convey this information to her. But that is another way of saying that she did not know that these failures meant that the NHS Trust was negligent. In my view, that further knowledge, which Ms Chinnock understandably did not have, has to be disregarded by reason of section 14A(9). The words of that subsection refer to “any acts or omissions”, and I do not see that they can be confined to acts or omissions of the defendants.

106. Accordingly, I think that the judge was correct in concluding that the claim was out of time by reason of actual knowledge, although I consider that this result depends upon a more extensive assessment of the relevant facts. I realise that this conclusion may appear harsh, but that harshness seems to me inherent in the balance that Parliament has struck in the drafting of section 14A and the fact that, as critics have pointed out, the provisions of the section apply equally in the case of negligence by omission as in the case of negligence by a positive act. However, as I noted at the outset, this does not affect the resolution of this appeal.

Those highlighted views introduce the additional possibility that the acts or omissions of another party may influence the state of knowledge of a claimant for the purposes of limitation – this disagrees with Jackson LJ’s analysis and leads to a potentially divisive situation. However for the moment the majority view must stand on this issue.

 

Remember, only the good die young and 66 is far too young!

For a love of laughter from ideas an 11 year old never imagined and the teaching of a sharp, critical eye I cannot thank you enough. That ability to laugh at the absurdity of life has saved more than you can imagine.

My condolences go out to your family and friends.

Well it looks like the court fees amendment got through.

Now if you have a case for more than 10k you’ll have to find 5% to issue it.

So in broad terms, even before you think about enforcing your rights over, say, a small business dispute that’s worth 50,000 you need to find 2,500 before even thinking about lawyers fees. Previously that would have been only 910!

Now compared to lawyers fees this may not look so bad, but when you think that you can get a lot of legal work for that example of 2,500 – that’s 10 hours of an experienced lawyer anywhere but central London and enough to bring a lot of disputes to a head.

This also avoids the cash flow assistance that conditional fees offer. Most good cases can get such terms since it is in a lawyer’s interests to take on and win these cases. In a commercial sphere this includes no win, low fee as well as no win, no fee options and can often be insurance and/or loan supported. These fees however make such cover or lending me expensive and that ATE is still unrecoverable!

This measure discourages small business who would otherwise be able to defend or enforce their rights from doing so unless it is a situation that would run the business – and maybe not even then.

I cannot strongly enough recommend signing the petition organised by the Law Society’s Ana Lelliott at change.org to seek revocation of this obstacle to justice.

A timely reminder of the scope of appeal on a case management issue (as if we haven’t all spent the last 18 months or so reading relief appeals).

The Court of Appeal in this case ([2014] EWCA Civ 1609) is somewhat critical of the scale of the appeal and points out the scope of its powers upon appeal and that firstly, these are merely to address whether the correct principles were applied and neither relevant factors ignored or irrelevant factors. (and refers to Eagil Trust Co Limited v Pigott-Brown [1985] 3 All ER 119 for three decade old EWCA authority on the issue).

The appeal is in relation to amendment of pleadings and although Briggs LJ intends to take only a brief overview there is still a history reminiscent of Jarndyce v Jarndyce.

in respect of amendment of statements of case discusses the issue of lateness as discussed in Swain-Mason v Mills & Reeve [2011] EWCA Civ 14 and Savings & Investment Bank Limited v Fincken [2003] EWCA Civ 1630 and places this flexible issue within the hands of the judge dealing with case management to balance considering that unclear but early and amendments may be impermissible but a short, focussed and explained amendment later in proceedings may be permissible.

However, rather than iteratively addressing the extensive grounds of appeal the court upheld the court below’s refusal to re-amend particulars on proportionality grounds and took a pragmatic approach to the proposed significant re-amendments sought  (p.41).

There were specific issues addressed of which the second – reintroduction of an abandoned point – is useful authority commenting as it does that the White Book’s view that Rule 38.7 (court’s permission required to bring proceedings previously abandoned) requires exceptional circumstances is too high a test – rather the court should balance the explanation proffered against the public interest in finality of litigation. Sufficient explanation is all that is required to overcome that natural disinclination, therefore a much lower standard.

This one potential error of law, well misdirection, did not lead to an incorrect result.

Once again the Court of Appeal upholds robust case management and the proper application of proportionality. A good reminder to all litigators but I would strongly commend reading of the decision to all advocates as the commentary on pleadings is too extensive to discuss briefly.

To paraphrase Jackson LJ in Inplayer v Thorogood

A gentle reminder to us all that skeletons are to set out concisely and in brief, and certainly not in a profit fashion (unlike this post) the key issues and authorities in a party’s case so as to enable a court to get to grips with a case.

Useful to an advocate is the reminder that it is not just used for pre reading and the hearing but also after when pondering a reserved judgment. Therefore if it is what it should be then it stands as a constant reminder of why the judge should find in your favour – and if reminders such as this are necessary then a march may be stolen if your skeleton is that clear, concise paradigm of the art of written advocacy and the one the judge prefers to refer to.

Now back to the regularly scheduled programming – limitation, which appropriately enough is running late.

Right, new job for me which means new bits of law to get deeply interested in, sadly for the one reader out there that means I’ll be trying to use this blog as a dumping ground for my notes and thoughts on cases.

For anyone else reading just remember this is not legal advice, and anyone brave enough to base any advice they want to give on my late night scribblings on a case may wish to rethink their legal research tools 🙂

In case you can’t guess my problem of the day is the law of limitation and it’s various applications, extensions and other such issues.