Lockley v National Blood Transfusion Service
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE FARQUHARSON,LORD JUSTICE SCOTT,SIR JOHN MEGAW |
| Judgment Date | 05 November 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J1105-1 |
| Docket Number | 91/1012 |
| Court | Court of Appeal (Civil Division) |
| Date | 05 November 1991 |
[1991] EWCA Civ J1105-1
Lord Justice Farquharson
Lord Justice Scott
and
Sir John Megaw
91/1012
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LIVERPOOL DISTRICT REGISTRY
(Mr. Justice Mars-Jones)
Royal Courts of Justice
MR. G. WRIGHT QC and MR. N.A. WRIGHT (instructed by Messrs E. Rex Makin & Co., Liverpool) appeared on behalf of the Appellant (Plaintiff).
MR. B. H. LEVESON QC and MR. G. E. MORROW (instructed by Messrs Hill Dickinson Davis Campbell, Liverpool) appeared on behalf of the Respondent (Defendant).
I will ask Lord Justice Scott to give the first judgment.
This is an appeal against the order of Mr. Justice Mars-Jones of 12th January 1990. The appeal is brought pursuant to leave granted by Lord Justice Lloyd on 7th June 1990.
The plaintiff, who is and has at all material times been a legally assisted person, commenced an action in damages for negligence by writ issued on 7th August 1989. The defendant is National Blood Transfusion Service. The statement of claim was served on 17th October 1989 and on 8th November 1989 the defendant applied to the District Registrar for an extension of time for service of the defence.
The application was heard on 16th November 1989. The District Registrar extended time for service of the defence until 30th November 1989 and ordered that—
"the costs of and incidental to this Application be the Defendants, not to be enforced without the leave of the Court save as to set-off as against damages and/or costs."
The plaintiff appealed against the District Registrar's order for costs. It was contended, first, that the costs of the defendants' time summons should have been payable by the defendant in any event and, second, that an order for costs against a legally aided party "by way of set-off as against damages and/or costs" was barred by the relevant provisions of the Legal Aid Act 1988 and the Regulations made thereunder. Mr. Justice Mars-Jones dismissed the appeal on both points. Nothing now turns on the first point, but on the second point he said this:
"I have read the relevant regulation of the Act and, in my view, the contention which counsel for the plaintif contends is really unsustainable. There is nothing wrong with the exercise of the Registrar's discretion in making the order that he did. It was within his jurisdiction and it was, in my view, a proper order to make in the circumstances. Accordingly, this appeal is dismissed."
By his order made on 12th January 1990 he dismissed the appeal "with the costs of the Appeal to be paid by the Plaintiff to the Defendants not to be enforced without leave of the Court save by way of set-off as against damages and costs". The plaintiff now appeals against that order.
The issue in this appeal is whether, in a case where one party is legally aided, an order for costs in favour of the other party can direct that those costs be set-off against either damages or costs to which the legally aided party has become, or may in future become, entitled in the action.
Mr. Wright QC, who appeared for the appellant, began his submissions by inviting our attention to the relevant statutory provisions.
Section 17(1) of the Legal Aid Act 1988 provides that—
"17(1) The liability of a legally assisted party under any order for costs made against him with respect to any proceedings, shall not exceed the amount, if any, which is a reasonable one for him to pay, having regard to all the circumstances, including the financial resources of all the parties and their conduct in connection with the dispute."
Regulation 124(1) of the Civil Legal Aid (General) Regulations 1989 provides that—
"Where proceedings have been concluded in which an assisted person (including, for the purpose of this regulation, a person who was an assisted person in respect of those proceedings) is liable or would have been liable for costs if he had not been an assisted person, no costs attributable to the period during which his certificate was in force shall be recoverable from him until the court has determined the amount of his liability in accordance with section 17(1) of the Act.
(2)…
(3) The amount of an assisted person's liability for costs shall be determined by the court which tried or heard the proceedings."
Mr. Wright submitted that until the determination of the amount of the liability of the assisted person pursuant to Regulation 124 has taken place, set-off directions such as those made by Mr. Justice Mars-Jones and by the District Registrar cannot properly be made and that, in any event, the sum to be set-off should not exceed the amount, if any, that the assisted person has been adjudged liable to pay.
Before considering these submissions, I can conveniently refer to one or two other relevant statutory provisions.
Section 16(6) of the Act gives the Legal Aid Board a charge on "any property which is recovered or preserved for [the assisted person] in the proceedings", but section 16(8) provides that—
"The charge created by subsection (6) above on any damages or costs shall not prevent a court allowing them to be set-off against other damages or costs in any case where a solicitor's lien for costs would not prevent it."
Subsection (8) does not, in my judgment, create any new right of set-off. It simply preserves the rights of set-off that the general law would allow and protects them against the charge created by subsection (6). If, in Currie v. Law Society [1977] 1 QB 990, Mr. Justice May (as he then was) is to be taken as expressing the opinion that section 3(6) of the 1949 Act (the predecessor of section 16(8) of the 1988 Act) created a new right of set-off not available in litigation between non-legally aided parties (see e.g. page 997 A-B), I would respectfully dissent from that opinion. The effect of section 16(8) is, in my judgment, that whatever rights of set-off are available under the general law are available against legally aided parties notwithstanding the Board's charge (see also section 31(1) (b) of the 1988 Act).
In considering Mr. Wright's submissions, it is necessary, in my opinion, to tread once again the well travelled path that separates set-off from mere cross-claim. The leading authority is still Hanak v. Green [1958] 2 QB 9 where Lord Justice Morris referred at page 24 to set-off "which, as a matter of equity, can be relied on as a defence". He said: "But this does not mean that all cross-claims may be relied on as defences to claims." And at page 25 he said that "a cross-claim can be regarded as a set-off…if it would have been regarded by a court of equity as the basis for equitable set-off or for giving protection on equitable grounds to a defendant." Lord Justice Sellers said at...
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...distinguished.Dicta of Sellers LJ in Hanak v Green [1958] 2 QB 9, 29, CA and of Scott LJ in Lockley v National Blood Transfusion Service [1992] 1 WLR 492, 495, 497, CA not applied.On the question whether the costs awarded to the defendants should be set off against the net damages due to th......
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