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31/01/2008

Legal aid, negligence and the clients from hell

It’s not a housing case, but Leonard & Leonard v Byrt & Others [2008] EWCA Civ 20 caught my eye as being of practical interest for legal aid practioners and potential amusement for everyone else.

This was an appeal against a summary judgment against the appellants in their claim for negligence against the respondents – a solicitor, Mr Byrt, a barrister, Mr Stafford and an expert. The basis of the negligence claim was that but for the respondents negligence, the appellants would have been able to secure public funding to bring the primary litigation (of which more below) to a successful conclusion.

To get to grips with the deep implausibility of this claim will need some lengthy back story.

In 1988-90, the Leonards decided to sell all their assets and have a yacht built, with the idea of living in the Algarve on charter income. On its maiden voyage in Dec 1990, the yacht’s rudder fell off. The yacht and the Leonards ended up in Lisbon harbour, where the yacht, and the Leonards stayed. In May 1994, a claim was issued against assorted marine surveyors, the builders and designers of the yacht, but not served. The claim was for replacement of the rudder and fitting and damages for loss of use.

The claim was not served until November 1994, the Leonards having received legal aid from September 1994. Mr Byrt began acting at this point. Mr Byrt instructed an expert, initially for paper advice. In February 1996, at a directions hearing, it was suggested that the then claimants might seek to amend the claim to a general deficiency in the yacht’s construction, to allege total loss. The Master at that hearing said if the application to amend was not made immediately, it would be looked on with disfavour later on.

In 1996 Mr Byrt obtained an extension of legal aid to allow for an expert survey of the yacht, in Lisbon, involving x-rays. The expert thought that the welding of the hull showed some faults, was probably adequate,  but he recommended further examination, more x-rays over three days. Mr Byrt sought legal aid funding for this and obtained advice from counsel and the expert’s full report on the existing survey.

The extension to funding was refused in October 1998, Mr Byrt re-applied, saying negotiations had stalled. Meanwhile, an advice from Counsel gave the value of the claim as less than £130,000 on the current claim and warning of a strike-out application. The Legal Aid Board, as it then was, issued notice to show cause why funding should continue and then, despite Mr Byrt’s detailed response, discharged the certificates in May 1999. Mr Byrt appealed and the Certificates were re-instated in June 1999, but only for proposed mediation. On Mr Byrt’s repeated requested, the LAB also authorised instruction of another Counsel, Mr Stafford – another respondent here – as the Leonards were dissatisfied with previous counsel. This would be a continuing theme.

In early December 1999, the Leonards told Mr Byrt that they had met a marine surveyor in Portgual who they wanted instructed, with public funding, to prepare another report. Mr Stafford told Mr Byrt that it would be highly unlikely that the court would grant leave to enter a different expert’s report as evidence. Mr Stafford produced an advice in Dec 1999 valuing the claim at £144K to £162K with a 60% chance and argued for the extension of public funding to trial, not least to recover the costs of £86K at that point.

The Leonards, off their own bat, chased the other surveyor for an opinion, which he gave without having inspected the yacht, saying that the construction of the yacht was inadequate. Mr Byrt sent this to the LAB together with Counsel’s advice, asking for the certificates to be extended to trial. In February 2000, the LAB refused.

In April 2000, the Leonards told Mr Byrt they had lost confidence in the first expert. At their own expense, they got their favoured surveyor to carry out an inspection of the yacht with x-rays. He then produced two reports, the second being re-written because the Leonards, in person, had objected to a passage praising the first expert and his report. This expert said the whole structure was defective and went on to give his estimate of quantum!

In June 2000, the Leonards sent the second of these reports to the LSC as it now was, and to the main Defendant’s solicitors directly, without asking or warning Mr Byrt. They also sent a copy to Mr Stafford. Mr Stafford said that the only way to get this material into evidence would be to ask the first expert to read it and comment on it in a supplementary report. Mr Byrt contacted the first expert to ask, but the expert said he wanted his two year old fee paying first. The Leonards promptly instructed Mr Byrt that not only did they not want the expert instructed further but that Mr Byrt wasn’t to pay his outstanding fee!

The mediation was due to take place in July 2000. Mr Byrt again pressed the LSC by phone to extend funding, to use as a lever in mediation. The LSC refused. Mr Byrt then wrote, setitng out what he understood the LSC’s position to be and requestng confirmation that this was so. This letter formed the sole basis of the Leonards later claim against him for negligence for being a ‘desultory attempt’ to extend funding! The Leonards considered that the sole purpose of this letter was to force them to accept a low settlement at mediation. At mediation, the Defendants offered £80K plus costs – which were about £96K by this point. The Leonards, aware that funding was limited to mediation, rejected this, asking for a minimum of £300K.

Mr Byrt promptly sought advice from previous counsel and Mr Stafford. Both recommended acceptance. The Leonards withdrew instructions from Mr Staffford and after telling Mr Byrt to end negotiations, withdrew instruction from Mr Byrt in late 2000. Funding certificates were discharged in November 2000. They were briefly re-instated in July 2000 limited to exploring an increased settlement offer of £100K, which the Leonards weren’t interested in pursuing, and discharged again in July 2001. Although another firm had a stab at rescuing the situation, even persuading the Leonards to re-instruct the first expert, but it was too late. The Leonard’s claim was struck out in November 2002 for delay, just before the first expert delivered a report stating that the whole structure of the yacht was faulty. Permission to appeal the strike-out was refused. It is worth noting that the 2 year delay in obtaining a submissible further report was due to the Leonards’ refusal to have the expert’s fee paid in 2000.

But the Leonards were not going to be put off. They sprang into action some two and a half years later, in November 2005, when the claim against the respondents was issued, apparently again with public funding, although this vanished  in September 2006. In February 2007, that claim failed with summary judgment against the claimants, and so to the present appeal.

It is a long and messy story. The Court of Appeal dismissed the appeal on the basis that the respondents had acted entirely properly and competently. There was ‘no possible ground for criticism’ of Mr Stafford’s advice. The supposed evidence against the expert was ‘opportunistic’ and gave a brief conversation far too much significance. Mr Byrt had ‘sought assidulously’ extensions to funding. he has made ‘strenuous efforts’ to secure them. In any case, even if breach of duty had been established, it was very unlikely that the claim amended in the form sought by the Leonards would have succeeded, and the loss of the settlement offer was as a result of the Leonards’ own actions.

In part, this is a tale from another age, when legal aid was available for this kind of claim. But perhaps a cautionary tale, nonetheless.

The possibility that a claim in negligence could be founded on a failure to adequately pursue the extension of public funding remains. It is something to have in mind where, for instance, a client turns down a recommended Part 36 offer. We have no doubt all had Mr & Mrs Leonards as clients – so clear records of advice and reasoning, Counsel’s advice and representations to the LSC should all be in place, not to mention making clear the consequences of refusing a recommended offer.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

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