Legal Services Commission v Henthorn
| Jurisdiction | England & Wales |
| Judge | The Master of the Rolls,Lord Justice Lewison,Sir Stephen Sedley |
| Judgment Date | 30 November 2011 |
| Neutral Citation | [2011] EWCA Civ 1415 |
| Docket Number | Case No: A2/2011/0606 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 November 2011 |
[2011] EWCA Civ 1415
The Master of the Rolls
Lord Justice Lewison
and
Sir Stephen Sedley
Case No: A2/2011/0606
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
His Honour Judge Anthony Thornton QC
HQ06X00333
Royal Courts of Justice
Strand, London, WC2A 2LL
Jeremy Morgan QC and Nicola Rushton (instructed by CKFT, Solicitors) for the Appellant, the Legal Services Commission
Geraldine Clark and Jennifer Haywood (instructed by DaySparkes) for the Respondent, Ms Henthorn
Dinah Rose QC and Ben Jaffey (instructed by Bindmans LLP) for The Law Society
Nicholas Bacon QC for the General Council of the Bar
Hearing dates: 7,8 and 9 November 2011
The background to this appeal
The principal issue on this appeal is when time starts running under the Limitation Act 1980 ("the 1980 Act") in relation to a claim by the Legal Services Commission ("the Commission"). The claim is for the recovery of an alleged overpayment of money paid to counsel on account of fees, in respect of work done under a civil legal aid certificate, which is not prematurely revoked or discharged.
At first instance, His Honour Judge Anthony Thornton QC, sitting as a High Court Judge, held that time runs from the date that the work under the certificate is actually completed — [2010] EWHC 3329 (QB). The Commission appeals against that decision, contending that time only starts to run (i) when the overpayment is demanded, (ii) when the Commission makes a finding that there has been an overpayment, (iii) when the taxation or assessment of costs has been completed, or (iv), but only where costs have been assessed by the court, when the result of the assessment are reported to the Commission by the solicitor with conduct of the case.
The defendant to the proceedings and the respondent to the appeal is Aisha Henthorn. She was a practising barrister, until she disbarred herself voluntarily in 2001, owing to poor health resulting from a motor car accident in September 1998. The Law Society and the Bar Council have intervened, and have made written and oral submissions supporting the contention of Ms Henthorn that the judge's decision was right.
The proceedings before the judge were brought by the Commission for the recovery of alleged overpayments which it said had been made to Ms Henthorn in respect of a number of different cases. It is only fair to Ms Henthorn to record that there is, and has been, no allegation or suggestion of any impropriety on her part in relation to any of the cases. Indeed, this is something of a test case for the Commission, who have agreed not to seek costs from Ms Henthorn if this appeal is successful.
In its original claim issued in February 2006, the Commission claimed a total of £351,420.88 from Ms Henthorn. After 18 months, the claim was amended to seek £109,084, which was said to have been the aggregate of the amounts overpaid to her in connection with seventeen cases. The work in those cases had been carried out by Ms Henthorn between June 1992 and September 1998. On this appeal, the Commission has reduced its claim to £80,470.23 which it contends was overpaid to Ms Henthorn in a total of eleven cases.
It is and was common ground that six years is the relevant limitation period – see section 9 of the 1980 Act. The judge dismissed the proceedings in their entirety, because, at least in relation to all but one of the individual claims, the work concerned was carried out by Ms Henthorn more than six years before the proceedings were commenced. The first issue is whether he was right. If the claims are not time-barred, (i) Ms Henthorn contends that the proceedings are an abuse of process, and, if she fails on that, (ii) she contends that she nonetheless has a defence in relation to some of the sums claimed, and, if she does, (iii) the Commission argues that it can nonetheless succeed in a claim based on restitution.
I shall consider those issues, in so far as they require to be addressed, in turn. However, it is sensible first to set out the centrally relevant provisions of the Legal Aid Act 1988 ("the 1988 Act") and the Civil Legal Aid (General) Regulations 1989 ("the Regulations").
The Civil Legal Aid (General) Regulations 1989
The primary issue of principle, namely when time starts to run, turns on when the Commission's "cause of action accrued" to use the words of section 9 of the 1980 Act. That question has to be determined by reference to the provisions of the 1988 Act and the Regulations, which, inter alia, govern the way in which legally aided work is to be paid for. The Regulations have been amended on a very large number of occasions, and counsel conveniently agreed to work from the version in force on 19 March 2000. I shall do so too, and all references hereafter to regulations are to regulations in that version.
As the judge explained, the 1988 Act and the Regulations "defined the type of proceedings and the courts or tribunals that qualified for legal aid representation and which applicants were eligible on financial grounds and what test as to the merits of an applicant's case should be applied by the [Commission] when deciding whether to grant an application for it" – [2010] EWHC 3329 (QBD), para 1(As the judge also mentioned, the Commission replaced the Legal Aid Board —"the Board" —which was the relevant body at the time during which most of the sums under consideration in these proceedings were paid to Ms Henthorn, so any reference to the Commission includes the Board).
The essential features of the Regulations at the relevant times were as follows.
A person who wished to obtain legal representation had to be granted a legal aid certificate ("a certificate") and, once it was granted, he or she became an "assisted person". An assisted person was, at least in principle, free to choose a solicitor, who was to be subject to the same obligations to the assisted client as would have applied had the instructions been private save for any specific exception provided for by the statutory scheme —see section 32 of the 1988 Act. One way in which the contractual relationship between solicitor and client was altered by the grant of legal aid was under section 9(5) of the 1988 Act, which provided that the assisted person was not required to pay his or her solicitor any charge or fee, save for any contribution provided for in the Regulations. Similarly, under section 31(3), the solicitor was not entitled to take any payment in respect of that representation other than as paid by the Commission or as authorised by the 1988 Act or by the Regulations.
A solicitor acting for an assisted person could instruct counsel if (expressly or impliedly) authorised by the certificate or by the Commission. In such a case, counsel would have exactly the same relationship with both her client and her instructing solicitor as she would have had if the instructions had been given in a privately funded matter. When instructing counsel, regulation 59 required the solicitor to send her a copy of the certificate or the authorisation.
The Commission could, and usually did, impose conditions limiting the ambit of the certificate and requiring further approval before any limitation could be amended. Costs incurred by an assisted person's legal representatives in those cases could only be paid for out of the Legal Aid Fund ("the fund") if they had been incurred during the currency of a valid certificate.
Regulation 72 imposed a duty on a solicitor "forthwith" to report to the Commission "either (a) upon the completion of the case if he had completed the work authorised by the certificate; or (b) if, for any reason, he is unable to complete the work."
Part X of the Regulations, which included regulations 74–86, was concerned with "Revocation and Discharge of Certificates" and their consequences. A certificate could be discharged on various grounds, including because the assisted person had sufficient income to finance the litigation himself, the prospects of success in the litigation were too weak, or the assisted person failing to provide information. It appears from regulation 80(c) that a certificate could be discharged when the proceedings concerned "have been disposed of" or when "the work authorised by the certificate has been completed". Regulation 82(1) required the Commission to send notice of discharge or revocation "forthwith" to the solicitor. Regulation 82(2) required a solicitor who received notice of discharge or revocation forthwith to inform any counsel.
Regulation 83 provided that "the retainer of any solicitor and counsel … acting on behalf of an assisted person shall [subject to certain exceptions] forthwith determine" on "receipt by him of a notice of revocation or discharge". Given that regulation 82 only required service of the notice on the solicitor, it seems to me clear that this meant that the retainer of any counsel ended when the solicitor was served with the notice. Regulation 84(b) stated that the Commission "remains liable for the payment of any costs … assessed", notwithstanding such a determination of a retainer.
Regulation 100 provided for payments to be made on account, and paras (1) and (2) entitled, respectively, a solicitor and counsel acting under a certificate to "submit a claim to the Commission … for the payment of sums on account of" profit costs or fees, as the case may be, "for work done in connection with the proceedings to which the certificate relates". Paras (3) and (4)...
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