R v Legal Aid Board, ex parte Edwin Coe (A Firm) and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SIMON BROWN,LORD JUSTICE JUDGE,LORD JUSTICE TUCKEY |
| Judgment Date | 17 May 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0517-11 |
| Date | 17 May 2000 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: QBCOF 1999/0907/C |
[2000] EWCA Civ J0517-11
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR JUSTICE SULLIVAN
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Simon Brown
Lord Justice Judge and
Lord Justice Tuckey
Case No: QBCOF 1999/0907/C
Mr J Harvie Qc & Mr A Maclean (instructed By Policy & Legal Dept. Legal Aid Board Of London Wc1x 8aa) For The Appellant
Mr A Hillier (instructed By Edwin Coe Of 2 Stone Buildings, Lincolns Inn, London Wc2, Solicitors) For The Respondents
This appeal raises a point of some importance as to the circumstances in which a legal aid certificate can be amended for mistake. Regulation 51 of the Civil Legal Aid (General) Regulations 1989 (the Regulations) provides that:
"The Area Director may amend a certificate where in his opinion -
(a) there is some mistake in the certificate; �"
What is meant by mistake in this context? What is the effect of this court's long-standing decision in R & T Thew Limited v Reeves [1982] QB 172? These are the critical questions before us.
The point is important both generally and to the first respondents, a firm of solicitors with some �70,000 worth of costs (quite apart from the costs of these judicial review proceedings) riding upon it.
The facts are set out in considerable detail in the judgment below. They can, I think, sufficiently be summarised as follows. The second respondent (Mr Moukarzel) was one of many defendants in very large-scale proceedings for conspiracy to defraud brought by a Spanish company and its subsidiary. The case was known as the Gruppo Torras fraud case and was only finally decided by Mance J last summer. Mr Moukarzel was an investment analyst employed by the second plaintiff and was thereafter a director for some time. The sums involved in the fraud were massive, in excess of $450 million, and the proceedings were very substantial and very complex. At the end of the day the claim against Mr Moukarzel was dismissed but the judge ordered that he was to receive only half of his costs from the plaintiffs. This appeal is concerned with part of the other half.
Mr Moukarzel was first granted legal aid on 22 February 1994. The material parts of the certificate read:
"1. DESCRIPTION OF LEGAL AID
To defend/continue to defend proceedings No: 1993 Folio No. 624 between the assisted person and Grupo Torras SA and/or Torras Hostench London Limited
2. CONDITIONS AND LIMITATIONS (if any)
Limited to representation on an action to strike out. It is a condition that the solicitor shall report to the area office on form CLA30 if profit costs, disbursements and counsel's fees exceed �7,500. If an extension is not obtained, subsequent profit costs may be deferred."
Following two amendments made to authorise changes of solicitor (see regulation 51(f) of the Regulations) which put the first respondents (Edwin Coe) in place, Edwin Coe applied on 10 November 1994 on form CLA30 for the certificate to be amended. They ticked the box inviting an amendment for "Removal of Limitation/Condition", invited an increased costs figure of �20,000, and gave as the "Reason for request":
"Proposed application to strike out is not being made. Leading counsel � confirms defence must now be prepared, and probably application for further and better particulars. Counsel advises that the assisted person has a good defence to the claim."
The form further made clear that the suggested new figure of �20,000 costs was "to defence."
On 10 November 1994 the Legal Aid Area office certified that the certificate had been "amended as follows":
"by removal of the existing limitation and substituting therefor: Limited to obtaining further evidence and thereafter Counsel's Opinion as to merits, to include the settling (but not the issue or service) of proceedings or a defence (and counterclaim), if Counsel so advises.
By deleting the amount contained in the condition in the certificate and by substituting the amount of �20,000."
Thereafter Edwin Coe submitted two further applications in form CLA30 to amend the certificate, respectively on 13 June 1995 and, with fuller explanation, on 19 January 1996, each seeking increases to �40,000. Neither, however, was granted and I can go straight to a further such application, made on 5 June 1996 to increase the costs allowance to �80,000. The reason for that request was stated to be:
"Need to deal with summons for directions and discovery. See attached for estimate of costs incurred to date and estimate of costs up to and including discovery."
The attached document (which in turn attached Mr Moukarzel's Points of Defence and a three page letter from the plaintiffs' solicitors dated 28 February 1996 enclosing a draft Summons for Directions) contained an estimate of Edwin Coe's costs to February 1996 of some �30,900 and a further estimate of their costs up to and including discovery (to include counsel's fee for attending a full day hearing of the Summons for Directions listed for 22 July 1996) of a further �49,100 odd. It also stated that further and better particulars of the further and better particulars of the Points of Defence had already been served on behalf of Mr Moukarzel.
That application was initially refused by the Area Manager on 12 June 1996, essentially on the ground that insufficient information had been provided. The respondents gave notice of appeal stating essentially that it was impossible and unrealistic to attempt at that stage an estimate of the total costs of the case or to provide a breakdown. It said that a guesstimate (of �80,000) had been provided of the costs up to and including discovery and that the best guess was that the costs of Mr Moukarzel's defence would be not less than �100,000. The point was made that the issues were vastly complex.
The matter was then reviewed internally by the Legal Aid Board. There is a memorandum from Miss Saunders, a case worker, to Ms Turner, an experienced solicitor, stating inter alia:
"The claim is worth $450 million. It appears that the costs to discovery stage are about �100,000. �
The matter has been referred from the Amendments Team on an appeal on a refusal to increase the costs condition.
Could you please review this matter. Obviously a decision needs to be made on the costs condition increase but it may be appropriate to consider whether or not this is something that we feel should continue."
Ms Turner's manuscript response was:
"I don't see how we can withdraw legal aid. The 'privately paying person' test can't really be applied in this situation."
So it was that on 10 July 1996 the certificate came to be certified as amended:
"By deleting the amount contained in the condition in the certificate and by substituting the amount of �100,000."
In 1997 there was a further application to increase the costs condition to �515,000. The reason was the need to prepare for trial. This was listed to commence on 1 October 1998 and the estimate was between twenty-four to thirty-six weeks. Because it was then recognised as a high cost claim, the application was passed to Mr Baker, a solicitor in the London area office, for consideration. He pointed out that the certificate continued to be subject to the limitation:
"To obtaining further evidence and thereafter Counsel's Opinion as to merits, to include the settling (but not the issue or service) of proceedings or a defence (and counterclaim), if counsel so advises."
He suggested, therefore, that any work undertaken in excess of that limitation �i.e. after the service of the Points of Defence �was not legally aided and would not be paid for by the Legal Aid Board. Correspondence ensued. Edwin Coe said that they had understood the limitation to mean that the certificate allowed steps to be taken towards settlement of the proceedings or, subject to Counsel's Opinion on the merits, the service of a defence. That was, of course, an impossible construction and it has long since been abandoned.
In the event, Edwin Coe on 1 April 1998 made a fresh application to increase the costs condition to �515,000, this time duly ticking the relevant box on form CLA30 to invite also the removal of the existing limitation. Mr Baker responded to that fresh application by letter confirming that:
"as of 14 April 1998 I have granted an amendment removing the current limitation and replacing it with 'limited to all steps up to and including pre-trial review and thereafter a Solicitors' report or Counsel's Opinion'."
Later amendments were duly sought and granted and no further problems arose. The one-half of Mr Moukarzel's costs awarded against the plaintiffs amounted to �390,000 odd. The bulk of the other half has been paid by the Legal Aid Board. Unpaid, however, is some �80,000 representing the costs incurred by the respondents between February 1995 when the Points of Defence were served and 14 April 1998 when the certificate was finally amended to remove the limitation which had precluded service of the defence.
Edwin Coe acknowledge, as they must, that the costs (some �10,000 worth) incurred between the service of the Points of Defence in February 1995 and 10 July 1996 when, following upon the June 1996 application, the Board increased the costs condition to �100,000 are not recoverable under the certificate. They claim, however, the balance of �70,000 and it is that sum which is at stake in these proceedings. Edwin Coe's entitlement to this depends upon whether or not the...
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