The Law Reports (Queen’s Bench Division)
[1987] QB 565
[COURT OF APPEAL]
1986 Nov. 3, 4; 13
Sir John Donaldson M.R., Dillon and Croom-Johnson L.JJ.
Solicitor — Costs — Personal liability — Plaintiff legally aided — Plaintiff’s claim dismissed — Whether defendants entitled to order for costs against plaintiff’s solicitor personally — Whether solicitor under duty to opposing party — R.S.C., Ord. 62, r. 8(1)
The plaintiff, who was legally aided with a nil contribution, brought an action against the defendant electricity board claiming damages for negligence and breach of statutory duty. He alleged that because of defects in the electricity supply electricity was escaping in the vicinity of his house and heating water in the earth so that it turned to steam or changed into its constituent gases, giving rise to penetration of the concrete floors by water, the appearance of water from electricity sockets, and other physical phenomena such as the movement of objects in the house. The plaintiff’s claims were supported by independent expert evidence. Before the hearing of the action the defendants’ solicitor wrote to the plaintiff’s solicitors saying that if the action continued to trial they would make an application that the plaintiff’s solicitors be ordered to pay the defendants’ costs. After a 12-day trial Steyn J. dismissed the plaintiff’s action, holding that the events complained of were all caused by a member of the plaintiff’s family and that the plaintiff and his wife must have realised that from an early stage. He made an order for costs against the plaintiff, not to be enforced without the leave of the court. The defendants applied for an order under R.S.C., Ord. 62, r. 8[1] that the plaintiff’s solicitors pay their costs. The judge held that the plaintiff’s solicitors and counsel had acted entirely properly, and dismissed the application.
On appeal by the defendants: —
Held, dismissing the appeal, that although solicitors owed a duty to the court to conduct litigation with due propriety, it was doubtful whether they owed any such duty to the opposing party; that the jurisdiction to order a solicitor to pay the costs of the opposing party under R.S.C., Ord. 62, r. 8 could be exercised only where it was clear that he was guilty of a serious dereliction of duty or serious misconduct, and should be exercised with care and discretion; that, although a solicitor should not assist a litigant where prosecution of a claim amounted to an abuse of process it was not his duty to attempt to assess the result of a conflict of evidence or to impose a pretrial screen on a litigant’s claim or defence; that such a charge of misconduct against a solicitor ought not to depend on inference without direct evidence and that, in the circumstances, since the plaintiff’s claim had been supported by independent witnesses and expert evidence it was impossible to assail the judge’s conclusion that legal aid had been properly granted and that the solicitors and counsel had acted properly (post, pp. 571D–F, 572C–G, 577D–G, 579G–580C, 581C–D).
566
Edwards v. Edwards [1958] P. 235 and Davy-Chiesman v. Davy-Chiesman [1984] Fam. 48, C.A. applied.
Dicta of Lord Denning M.R. in Kelly v. London Transport Executive [1982] 1 W.L.R. 1055, 1064–1065, C.A. not applied.
Per curiam. (i) Whilst there can be no objection to an application under R.S.C., Ord. 62, r. 8 at the conclusion of a hearing, it is not proper to threaten to make such an application during or prior to the hearing in order to browbeat solicitors for legally aided clients into dropping the case or procuring the revocation of the legal aid certificate (post, pp. 577G–578A, 580D–581A, D).
(ii) There is no basis for the contention that members of the Bar owe a duty to their lay client’s opponent. Nor is there any basis for holding that the essential public interest immunity affirmed in Rondel v. Worsley [1969] 1 A.C. 191 applies only in relation to claims against counsel by their own lay clients, and not to claims by opposing litigants (post, pp. 571F–H, 581A–C, D).
Rondel v. Worsley [1969] 1 A.C. 191, H.L.(E.) considered.
Decision of Steyn J. affirmed.
The following cases are referred to in the judgments:
Carl Zeiss Stiftung v. Herbert Smith & Co. (No. 2) [1969] 2 Ch. 276; [1969] 2 W.L.R. 427; [1968] 2 All E.R. 1233; [1969] 2 All E.R. 367; Pennycuick J. and C.A.
Davy-Chiesman v. Davy-Chiesman [1984] Fam. 48; [1984] 2 W.L.R. 291; [1984] 1 All E.R. 321, C.A.
Edwards v. Edwards [1958] P. 235; [1958] 2 W.L.R. 956; [1958] 2 All E.R. 179
Kelly v. London Transport Executive [1982] 1 W.L.R. 1055; [1982] 2 All E.R. 842, C.A.
Myers v. Elman [1940] A.C. 282; [1939] 4 All E.R. 484, H.L.(E.)
Rondel v. Worsley [1969] 1 A.C. 191; [1967] 3 W.L.R. 1666; [1967] 3 All E.R. 993, H.L.(E.)
The following additional cases were cited in argument:
Dawson v. Ramoneur Co. Ltd. (1976) 120 S.J. 838
Hanning v. Maitland (No. 2) [1970] 1 Q.B. 580; [1970] 2 W.L.R. 151; [1970] 1 All E.R. 812, C.A.
Holmes v. National Benzole Co. Ltd. (1965) 109 S.J. 971
APPEAL from Steyn J.
The plaintiff, Joseph William Alexander Orchard, brought an action against the defendants, the South Eastern Electricity Board, claiming damages for negligence and breach of statutory duty arising out of damage caused to his house which he alleged was due to a defect in the electricity supply. The plaintiff was legally aided with a nil contribution. On 8 March 1985 Steyn J. dismissed the plaintiff’s claim with costs, not to be enforced without leave of the court. The defendants then applied for an order under R.S.C., Ord. 62, r. 8 that the plaintiff’s solicitors, Roderick O’Driscoll & Partners, should pay their costs on the ground that the solicitors were guilty of serious misconduct in failing to inform the legal aid authorities of the circumstances and prospects for success of the plaintiff’s claim. On 18 March Steyn J. dismissed the application.
567
The defendants appealed on the grounds (1) that the judge had accepted the defendants’ submissions that the plaintiff’s solicitors had a duty to the defendants in acting for a legally aided plaintiff to see that the claim was well founded; the judge had drawn the wrong inference when he had found that the relevant local area legal aid committee had been fairly informed of the circumstances and prospects of the case; (2) that the judge had misinterpreted the assurance of counsel as to the extent to which the committee had been informed of the course and prospects of the claim; and (3) that the judge had failed to exercise his discretion as to costs judicially.
By a respondent’s notice dated 29 October the plaintiff sought to affirm the judge’s decision on the grounds, inter alia, that an order under Ord. 62, r 8, should be made only in a clear case of misconduct or default and, since the defendants’ contention depended upon an inference which the judge felt unable to draw, he had correctly exercised his discretion.
The facts are stated in the judgment of Sir John Donaldson M.R.
Dermod O’Brien Q.C. and Andrew Collender for the defendants. The plaintiff’s claim stood no prospect of success and no legal adviser could reasonably have thought otherwise. In the circumstances it is not possible to apportion blame between solicitors and counsel below, but in any event some blame must attach to the solicitors and that is sufficient to justify an order under R.S.C., Ord. 62, r. 8. The court may make an order against a solicitor who is responsible for improperly incurred costs whether he is responsible himself or by a servant or agent, and “agent” includes counsel. It is up to the solicitor, if an order is made, to apportion blame and bring an action against counsel if he wishes. He may recover contribution from an expert witness whose advice has led to those costs being incurred.
If a solicitor reasonably forms the view that a case is one which cannot be pursued he should refuse to act. In a non-legally aided case he could continue if the client can pay the other side’s costs.
It is accepted that it is necessary to show a serious dereliction of duty. In this case no lawyer applying common sense could have regarded the action as having any appreciable prospect of success, and he must have realised that the cost of fighting the action would be far in excess of any damages recoverable. The magnitude of the exposure to costs so far outweighs the prospect of benefit that no reasonable client of moderate means could embark on or continue with such litigation if he were paying for it himself.
The failure to apply common sense has caused the waste of nearly £55,000 of public money by way of the plaintiff’s costs taxed on a common fund basis and the whole of the defendants’ costs. The plaintiff would have recovered a total of £6,700 if he had proved his claim as advanced at the trial. If the plaintiff’s costs had been taxed down by more than 12½ per cent. he would have received nothing. The actual benefit to the client is an important consideration.
In accordance with Dawson v. Ramoneur Co. Ltd. (1976) 120 S.J. 838 the defendants’ solicitors wrote to The Law Society indicating that 568legal aid should not have been granted in this case. The judgment on costs were inconsistent with the judgment on liability.
The duty of the plaintiff’s solicitor to ascertain and test the prospect of success becomes greater because a non-legally aided party cannot get costs from a legally aided plaintiff unless he can show serious hardship. The solicitor should not cause the expenditure of legal aid funds on the basis of his client’s assertions if the facts known to him demonstrate such assertions to be untenable. On the standard of behaviour expected of a solicitor see Edwards v. Edwards [1958] P. 235, 248, and for the extent of the duty see Kelly v. London Transport Executive [1982] 1 W.L.R. 1055, 1063–1064, per Lord Denning M.R.
The judge was wrong to say that the solicitors had acted correctly throughout. See section 7(5) of the Legal Aid Act 1974 and regulations 67 and 68 of the Legal Aid (General) Regulations 1980 (S.I. 1980 No. 1894). Hanning v. Maitland (No. 2) [1970] 1 Q.B. 580 is authority for what is just and equitable.
For the test that a solicitor must apply in deciding whether he can continue on behalf of his client, see Kelly’s case [1982] 1 W.L.R. 1055; Hanning v. Maitland (No. 2) [1970] 1 Q.B. 580 and Holmes v. National Benzole Co. Ltd. (1965) 109 S.J. 971. No sensible client would have embarked on this litigation if he was paying for it himself.
Jonathan Playford Q. C. and Roger Eastman (neither of whom appeared below), for the plaintiff and his solicitors, were not called upon.
Cur. adv. vult.
13 November. The following judgments were handed down.
SIR JOHN DONALDSON M.R.
The plaintiff, Mr. Orchard, assisted by solicitors and counsel under the Legal Aid Act 1974 , brought proceedings against the defendants, the South Eastern Electricity Board, claiming damages for negligence and breach of statutory duty. After a hearing which lasted for 12 days, Steyn J. dismissed the plaintiff’s claim with costs but, in the light of the fact that his means were such that he had not been required to make any contribution under the legal aid scheme, stayed execution of that part of the order which related to costs until further order.
In the light of section 13(3)(b) of the Act of 1974 and of the decision of this court in Kelly v. London Transport Executive [1982] 1 W.L.R. 1055, it was appreciated by the defendants and their professional advisers that an application for an order that the costs of the defendants should be paid out of the legal aid fund was doomed to failure. Notwithstanding that they had incurred substantial costs — the plaintiff’s own costs were taxed at £54,000 and the defendants’ costs were likely to have been comparable — they could not realistically submit that this would cause them “serious financial hardship.’ The defendants had from the outset contended that the plaintiff’s claim was wholly without foundation. In default of being able to look to the legal aid fund for reimbursement, they applied for an order under R.S.C., Ord. 62, r. 8 that the plaintiff’s 569solicitors be required to pay their costs of defending themselves against the claim.
The judge dismissed this application and the defendants now appeal.
Before turning to the appeal itself, it is desirable that I should say a word about Ord. 62, r. 8. Sub-rule (1) merely confirms the ancient jurisdiction of the court to exercise control over its own officers, who include all who are admitted to the roll of solicitors. Their full title is indeed “Solicitor of the Supreme Court.” The sub-rule is in the following terms:
“(1) Subject to the following provisions of this rule, where in any proceedings costs are incurred improperly or without reasonable cause or are wasted by undue delay or by any other misconduct or default, the court may make against any solicitor whom it considers to be responsible (whether personally or through a servant or agent) an order — (a) disallowing the costs as between the solicitor and his client; and (b) directing the solicitor to repay to his client costs which the client has been ordered to pay to other parties to the proceedings; or (c) directing the solicitor personally to indemnify such other parties against costs payable by them.”
In making the application in the court below, Mr. Dermod O’Brien, for the defendants, comprehensively condemned not only the plaintiff’s leading and junior counsel, but “anybody else who has been involved in the handling of the plaintiff’s case.” In terms he claimed to make no distinction between them and submitted that it would be invidious for the court to do so. He continued:
“I ask that the solicitor be ordered to pay the costs of this case, the court recognising that he may have claims over which he may see fit to exercise. Whether these are against counsel, against Mr. Saunders [a witness] or against others that have been engaged in this matter is not for me to say.”
It is not clear to me what rights the solicitor would have against a witness, whether expert or otherwise, in respect of evidence given in court and the assertion of such a right, other than rhetorically, would raise an issue of considerable public interest and importance. When I inquired what rights the solicitor would have against counsel, I was referred to the judgment of Lord Denning M.R. in Kelly v. London Transport Executive [1982] 1 W.L.R. 1055, 1064–1065:
“Over the weekend I have looked at the authorities in this matter. As a result, the principle is clear that a solicitor is under a duty, not only to his own client who is legally aided, but also to the unassisted party who is not legally aided. If the solicitor fails in that duty, the unassisted party is at liberty to call him before the court, whereupon the court can make an order that he is to make good any loss or expense caused to the unassisted party by any breach of it. This is well established. It is not confined to legally aided cases, but to all cases — an order to make the solicitor pay the costs of the other side. As Abbott C.J. said as long ago as 1822 in Blundell v. Blundell (1822) 5 B. & Ald. 533, 534, ‘it will be a wholesome lesson 570to others …’ Lord Hatherley L.C. said in In re Jones (1870) L.R. 6 Ch.App. 497, 499 that solicitors must ‘not only perform their duty towards their own clients, but also towards all those against whom they are concerned, and that care should be taken to see that the litigation is the bona fide litigation of the client who instructs the solicitor, and not a litigation carried on altogether on the solicitor’s account.’ (Emphasis added). This principle was emphatically affirmed by the House of Lords in Myers v. Elman [1940] A.C. 282, 290, where Viscount Maugham said: ‘These cases did not depend on disgraceful or dishonourable conduct by the solicitor, but on mere negligence of a serious character, the result of which was to occasion useless costs to the other parties.’
(Emphasis added).
“These then are the duties of solicitors who act for legally aided clients. They must inquire carefully into the claim made by their own legally aided client so as to see that it is well-founded and justified — so much so that they would have advised him to bring it on his own if he had enough means to do so — with all the risks that failure would entail. They must consider also the position of the other side. They must not take any advantage of the fact that their own client is legally aided and so not able to pay any costs. They must not use legal aid as a means to extort a settlement from the other side. They must remember the position of the defendant and that he is bound to incur a lot of costs to fight the case. If a reasonable payment is made into court — or a reasonable offer is made — they must advise its acceptance. They must not proceed with the case on the chance of getting more. They must put out of their minds altogether the fact that, by going on with the case, they will get more costs for themselves. They must not run up costs by instructing endless medical experts for endless reports or by any unnecessary expenditure. They must not ask a medical expert to change his report at their own instance, so as to favour their own legally aided client or conceal things that they may be against him. They must not ‘settle’ the evidence of the medical experts as they did in Whitehouse v. Jordan [1981] 1 W.L.R. 246, which received the condemnation of this court [1980] 1 All E.R. 650, 655, and of the House of Lords. As Lord Wilberforce said [1981] 1 W.L.R. 246, 256: ‘… expert evidence presented to the court should be, and should be seen to be, the independent product of the expert, uninfluenced as to form or content by the exigencies of litigation.’
“All this is not only in regard to solicitors but also to counsel as well. We all know that the area committees depend largely on the opinion of counsel — as to whether legal aid should be given for the purpose or not, and as to whether the case should proceed further or not. So much so that counsel have a special responsibility in these cases. They owe a duty to the area committees who rely on their opinions. They owe a duty to the court which has to try the case. They owe a duty to the other side who have to fight it and pay all the costs of doing so. If they fail in their duty, I have no doubt that the court can call them to account and make them pay the costs of the other side. They will not be able to escape on the 571ground that it was work done by them in the course of litigation. They cannot claim the immunity given to them by Rondel v. Worsley [1969] 1 A.C. 191. That only avails them in regard to their own client. They have no immunity if they fail to have regard to their duty to the court and to the other side.
“If these precepts are observed, I hope we shall in future have no more disgraces such as have attended this case. But for the reasons I have given, I would dismiss this appeal.”
The circumstances in which these remarks came to be made were unusual. The issue in the appeal appears to have been confined to whether the L.T.E. could make good its claim to have its costs paid out of the legal aid fund. Certainly there is no trace in the report of any application by L.T.E. for an order against the solicitor. This part of the judgment was therefore obiter. Furthermore, it appears that the argument was concluded on the Friday and judgment given on the Monday, these remarks being based upon personal research conducted “over the weekend” without the benefit of argument from counsel. Neither Ackner L.J. nor O’Connor L.J. adverted to the topic in terms and I do not construe the introductory words of the judgment of Ackner L.J. (“I agree”) as conveying anything more than his agreement that the appeal should be dismissed.
I have quoted from the judgment at some length for two reasons. First, because it provides a useful summary of the duties of a solicitor acting for a legally aided client. Whether that duty is owed to the opposing party is open to considerable doubt, at least where the solicitor is acting with the authority of his client and is not carrying on the litigation on his own account. However, the duty is undoubtedly owed to the court (see Myers v. Elman [1940] A.C. 282, 302, per Lord Atkin), the duty being to conduct the litigation with due propriety, and the court may, in the exercise of its traditional jurisdiction over its own officers, order the solicitor to compensate the opposing party where the solicitor is in breach of that duty to the court. Second, because whilst there is no doubt that members of the Bar owe a duty to the court as well as to their lay client, I know of no basis for a contention that they owe any independent duty to their lay client’s opponent. Furthermore, so far as I am aware, the courts have never asserted any jurisdiction over members of the Bar, apart from their general jurisdiction to control the conduct of all who appear before them and apart from their appellate jurisdiction as Visitors to the four Inns of Court, and it would seriously undermine the independence of the Bar if they did so. Equally, I can find no basis in logic or authority for holding that the essential public interest immunity affirmed in Rondel v. Worsley [1969] A.C. 191 protects the Bar only in relation to claims by their own lay clients, leaving them unprotected in respect of the far greater risk of claims by disgruntled litigants on the other side.
For the sake of completeness, I should draw attention to the fact that the only order made by the court in relation to the solicitor concerned was that he should attend before the court for consideration of whether he should pay the defendants’ costs. This was an order which it was 572within the court’s competence to make of its own motion, but in fact it was subsequently rescinded in chambers in the light of representations by the solicitor with the concurrence of the L.T.E. The liability of the solicitor and the correctness of Lord Denning M.R.’s opinion never therefore received further consideration.
One of the earlier cases in which the court was asked to exercise this jurisdiction in the context of legally aided litigation was Edwards v. Edwards [1958] P. 235. Two matters were in issue. First, it was said that the wife’s solicitors had run up the costs of documentation without regard to propriety. Second, and more relevant to the present application, it was said that the wife’s solicitor continued with a claim for maintenance without seeking the advice of counsel and after becoming aware upon discovery that there was no basis for any allegation that the husband had wilfully neglected to maintain the wife.
Sachs J. examined the authorities and stated that it was axiomatic that the mere fact that the litigation failed was no reason for invoking the jurisdiction, nor was an error of judgment, nor even the mere fact that an error was of an order which constituted or was equivalent to negligence. There had to be something which amounted to a serious dereliction of duty: see p. 248. The decision of this court in Davy-Chiesman v. Davy-Chiesman [1984] Fam. 48 was to the like effect. The jurisdiction could only be invoked in the case of serious misconduct and the initiation or continuance of an action when it had no or substantially no chance of success might constitute such misconduct: per Dillon L.J. at p. 67.
That said, this is a jurisdiction which falls to be exercised with care and discretion and only in clear cases. In the context of a complaint that litigation was initiated or continued in circumstances in which to do so constituted serious misconduct, it must never be forgotten that it is not for solicitors or counsel to impose a pre-trial screen through which a litigant must pass before he can put his complaint or defence before the court. On the other hand, no solicitor or counsel should lend his assistance to a litigant if he is satisfied that the initiation or further prosecution of a claim is mala fide or for an ulterior purpose or, to put it more broadly, if the proceedings would be, or have become, an abuse of the process of the court or unjustifiably oppressive.
There is one other aspect of which sight must not be lost. Justice requires that the solicitor shall have full opportunity of rebutting the complaint, but circumstances can arise in which he is hampered by his duty of confidentiality to his client, from which he can only be released by his client or by overriding authority, such as that contained in regulation 74 of the Legal Aid (General) Regulations 1980 (S.I. 1980 No. 1894). In such circumstances justice requires that the solicitor be given the benefit of any doubt.
The plaintiff’s complaints were weird in the extreme. In the autumn of 1977 he was living with his wife and 15-year-old son at 3, Church Lane, Adisham, near Canterbury in Kent. This was a semi-detached cottage. Substantial quantities of water were found on a number of occasions in different parts of the cottage, such as the floor, ceilings and near light sockets. The plaintiff was an employee of the water authority 573and was well placed to satisfy himself that this was not of its doing. He then conceived the idea that the defendants must be responsible. In fairness to the defendants, it must be said that they investigated this surprising claim quickly and thoroughly and reached the conclusion, which proved right in the event, that someone in the household was spilling or throwing water about. The phenomenon continued and indeed spread to such bizarre happenings as the uncovenanted and unexplained movement of physical objects within the rooms and damage to the ceilings and pipe work to an extent which caused the cottage to become uninhabitable and the Orchards to leave for rented accommodation.
If matters had stopped there, I should have had considerable doubts about the propriety of assisting the plaintiff to launch an action against the defendants and I am confident that he would not have obtained legal aid. However, they did not stop there. The plaintiff consulted solicitors who took expert advice which led to the evolution of the theory that the cause might lie in defects in the defendants’ system of earthing and/or some discontinuity in the neutral electricity line serving the cottage. The details do not matter for present purposes. Suffice it to say that these solicitors, who were a different firm from those who carried the matter through to trial, applied for and were granted an unconditional legal aid certificate to prosecute the plaintiff’s claim. It must be inferred that this application was supported by counsel’s opinion. Immediately thereafter the plaintiff changed his solicitors, or vice versa, and Roderick O’Driscoll & Partners of Maidstone took over the conduct of the proceedings. It is in relation to that firm that the application is made.
The plaintiff’s case at the trial was that all the water phenomena were caused by an escape of electricity through the earth under the cottage, thereby heating water in the soil to a point at which it became steam and/or causing the water to change into hydrogen and oxygen gases, the latter being responsible explosively for some of the so-called “dynamic” incidents, i.e., the movement of physical objects. In fact, on the advice of counsel, reliance upon the “dynamic” phenomena was abandoned some time before the trial. All this may sound ludicrous, but there is no doubt that it was supported by expert advice. Furthermore, the alternative was prima facie even more ludicrous. It was that someone in the Orchard household, to the knowledge of the other members, was deliberately and systematically destroying their home for no apparent purpose other than to mount a claim against the defendants, notwithstanding that no member of the family appeared to have any grudge against them. It was a quite astonishing situation in which the truth, as eventually determined by the judge, namely that it was probably all the work of the son, but that Mr. and Mrs. Orchard must from an early stage have realised what was going on, was even stranger than the fiction propagated by the plaintiff, supported in all innocence as he was by experts, some of whom were highly qualified.
The initial basis of the application under R.S.C., Ord. 62, r. 8, and of the appeal, was that the solicitors were guilty of serious misconduct in failing to inform the legal aid authorities of the circumstances and prospects for success of the plaintiff’s claim, contrary to their duty under section 7(5) of the Legal Aid Act 1974 . There was no evidence of any 574such failure, but Mr. O’Brien invited the court to infer it on the basis that if this duty had been complied with, the legal aid authorities could not possibly have failed to discharge the plaintiff’s legal aid certificate. This view was based upon a very large number of arguments and a body of evidence upon which the defendants successfully relied at the trial, the substance of which had been communicated to the plaintiff’s solicitors some time beforehand. However, it is not clear to me why it necessarily follows that the legal aid authorities would have discharged the plaintiff’s certificate if this information had been passed to them. After all, counsel may have advised on the basis of the opinions of the plaintiff’s experts that there was some answer and that a reasonable chance of success still remained. And it must never be forgotten that what the defendants were alleging was that this damage was self-inflicted. This is not something which the legal aid authorities could be expected to accept lightly.
In point of fact there were at least two contraindications to drawing any such inference. The first was that the defendants’ solicitors had themselves at an early stage written to the legal aid authorities giving reasons why the certificates should be discharged. Whatever else might be expected, it could hardly be said that the authorities had not been put on inquiry and I infer, in the absence of evidence to the contrary, that they made inquiries of the plaintiff’s solicitors and counsel and were satisfied by the answers which they received. This, of course, leaves open the possibility that they were misled by solicitors and counsel. This is certainly not something which I should be prepared to assume. In any event, in this context, it has to be remembered that the plaintiff’s solicitors, and for that matter counsel, are unable to give evidence of what they were asked, what they replied and what information they volunteered. All this must remain under the seal of professional privilege, in the absence of a waiver by the plaintiff or, since he is now dead, his personal representatives. We were told, and I accept, that no such waiver has been forthcoming. The second contraindication is that, despite what emerged at the trial, details of which can scarcely have escaped the attention of the legal aid authorities, they have themselves taken no action whatever against the plaintiff’s solicitors or counsel or, so far as I am aware, given any indication that they were dissatisfied with the way in which solicitors and counsel discharged their duties to the fund.
However that may be, this basis for the defendants’ claim wholly disappears when leading counsel for the plaintiff at the trial (not Mr. Jonathan Playford) told the judge, on instructions, and the judge accepted, that the legal aid committee were informed of all the summonses and of all the reports and of all the advices of counsel. The defendants in their notice of appeal alleged that “The judge misinterpreted the assurance of counsel as to the extent to which the committee was informed of the course and prospects of the claim,” but, having subsequently read the transcript, Mr. O’Brien quite rightly did not press this contention. Instead he relied upon what he characterised in his skeleton argument as the duty of the plaintiff’s solicitors so to act as to protect the defendants from the expenses of defending a hopeless claim.
575
I am bound to say that, so stated, I do not believe that such duty exists. However, I do accept that the plaintiff’s solicitors had a duty not to further a claim which could be characterised as an abuse of the process of the court and this, I think, is what Mr. O’Brien really meant. In support of it he contended that no competent counsel, whether leader or junior, no competent solicitor, and no competent expert could possibly have supported the plaintiff’s claim.
The basis of this somewhat sweeping assertion was that, in order to make good his claim, the plaintiff would have to explain how it was that water ran uphill under his cottage, leaving the footings dry, through a layer of bitumen, and in some cases also through a damp proof membrane, and then through a layer of thermoplastic tiles leaving them undisturbed. He would also have to explain this phenomenon in the face of evidence that his experience was unique in the 65-year history of the electricity supply industry and why the other semi-detached cottage was not also similarly affected. In addition there were other problems facing the plaintiff. To boil the moisture in the soil under the cottage would require enormous energy and this simply was not available and, if it had been available, the water would not have arrived in the cottage cold, i.e., at the ambient temperature. Finally, confining myself to the major points made by Mr. O’Brien, the plaintiff had to overcome the damage to his credibility arising out of the abandoned claims based upon the so-called dynamic incidents.
Whilst I have to agree that all this takes some swallowing, I am far from convinced that it would necessarily have looked like this to the plaintiff’s solicitors, counsel and experts preparing for the trial or earlier. The conclusive element, which Mr. O’Brien quite rightly omits from his catalogue, is hindsight — knowledge that all these factors were proved at the trial and the plaintiff was quite unable to overcome them. In the end what matters is what the judge thought. He lived with this saga for 12 days. He had unrivalled opportunities for hearing the plaintiff’s case put and knowing what it looked like before it was destroyed by cross-examination and the deployment of the defendants’ evidence. Forewarned of this application, the following interchange took place between him and Mr. O’Brien during the latter’s final speech:
“Steyn J. There is one last matter I want to mention to you, and perhaps it is not strictly relevant to the merits, and I am giving no indication of which way I am thinking at the moment. But assume for the sake of argument I were in your favour, I did notice that your solicitors expressed extremely strong views about this case, and in a certain eventuality it is something I ought perhaps to refer to, because it struck me that the legal aid authorities were absolutely correct in granting legal aid in this case, and indeed that the solicitors and counsel involved acted perfectly properly, and I would have been disappointed in all of them if they had not acted as they had. It is only in a certain eventuality that I will refer to that, but I thought I would put it to you.
“Mr. O’Brien. My Lord, I am saving my argument on that until I have heard your Lordship’s judgment. I would ask your Lordship 576to, as it were, reserve your Lordship’s observations until that matter came to arise.”
Later, when Mr. O’Brien had deployed his arguments in full, the judge gave a judgment in which he reviewed the authorities and expressed his conclusion as follows:
“I do not therefore disagree with the legal submissions advanced on behalf of the defendants. In my judgment, however, the matter raises no issue of principle. It simply involves the application of well known principles to the facts of this case.
“While it was not positively submitted that the area committee had been misled, leading counsel for the defendants issued what he described as a number of challenges, thereby seeking to elicit information as to what the committee was told on various aspects of the case. I have been informed by leading counsel for the plaintiff that the committee was kept informed of the advice of counsel, the interlocutory proceedings, and all reports received. I accept this assurance, and proceed to consider the matter on the basis that the committee was fairly informed of the circumstances of the case.
“It is, however, submitted that the proceedings were doomed to fail, and that any competent lawyer would have so advised. This submission came as something of a surprise to me. When it was made I inquired why it was then considered necessary on behalf of the defendants not only to call 11 witnesses and an expert but also to cross-examine the plaintiff and some of his witnesses at very great length. The answer was, and this is understandable, that it was done out of excess of caution. So be it. I must now consider the submission on its merits.
“I have, of course, in my judgment decisively rejected the plaintiff’s claim on a number of grounds. I did so on the basis of a detailed consideration of the evidence and counsel’s speeches. I must now ignore hindsight, and consider the position as it would have appeared to counsel and solicitors when they were called upon to advise. While I have taken into account all the submissions made on behalf of the defendants, I will simply record the principal considerations which influenced my decision on this application. Looking at the broad picture of this case, I take the view that the conduct of counsel and solicitors was entirely proper, and that their decisions were reached on reasonable grounds. It is important to bear in mind the following considerations. (a) The plaintiff’s case that water was seen to rise (and particularly from the area near the skirting boards) was supported by a number of witnesses, some of them being entirely independent. (b) An explanation for this phenomenon was advanced by Mr. Bowie, an electrical engineer, whom I described as a responsible and fair-minded expert, despite the fact that I preferred the evidence of the defendants’ expert. (c) Admittedly, Mr. Bowie’s evidence was based on the test results of an electrician whose evidence I rejected as wholly unreliable. Odd as his behaviour had been, I consider that counsel and 577solicitors were entitled to accept his test results as a foundation for the plaintiff’s case.
“I have not lost sight of the change in the plaintiff’s case when he abandoned the allegation that the so-called dynamic incidents were caused by electricity. Eventually, I attached great importance to this aspect. However, in my judgment counsel and solicitors were conscientiously entitled to take the view that there was a genuine claim in respect of water damage, which the plaintiff and his family had attempted to support by the fabrication of other incidents. Finally, in so far as emphasis has been placed on the fact that special damages were only of the order of £2,702, and that I assessed general damages at £4,000, I should say that in my judgment counsel could quite fairly have taken the view that if the claim succeeded the award of general damages would be much higher. Inevitably I was influenced by my impression that even if the claim was established the importance of the water damage was overstated.
“Looking at the whole picture as revealed by the hearing of many witnesses, I am of the opinion that the application should fail. In my view leading counsel, his junior and solicitors acted entirely properly.”
Mr. O’Brien’s principal attack upon this judgment was directed to trying to satisfy us that the judge should not have reached conclusions (a), (b) and (c). This necessarily involves something in the nature of a full appeal on the facts by the successful party to litigation on the basis of a new standard of proof, namely, not the balance of probabilities, but whether the plaintiff’s case reached the level of credibility at which it could not be characterised as an abuse of the process of the court. As the rules stand, the defendants may have been within their rights, but it is intriguing to speculate whether, if the defendants had been of lesser financial stature and had attempted such an appeal, the plaintiff’s solicitor might not himself have counter-attacked the defendants’ solicitor by seeking an order under Ord. 62, r. 8 on the grounds that the defendants’ appeal was itself an abuse of the process of the court and that no solicitor should have assisted with it. I am not suggesting that such a cross-application would necessarily have succeeded, but it is certainly a theoretical possibility and an unattractive one. Suffice it to say that none of the defendants’ submissions caused me to have the slightest doubts about the unassailability of the judge’s conclusions.
There is one final matter which cannot be ignored. Whilst there can be no objection to an application under Ord. 62, r. 8 at the conclusion of a hearing, given appropriate facts, it is quite another matter where such an application is threatened during or prior to the hearing. Objectivity is a vital requirement of professional advisers. Hence, for example, the rejection of contingency fees and the impropriety of a solicitor acting for co-defendants. Threats to apply on the basis that the proceedings must fail not only make the solicitor something in the nature of a co-defendant, but they may well, and rightly, make him all the more determined not to abandon his client, thereby losing a measure 578of objectivity. Whilst a solicitor who has been subjected to an order making him personally liable for the costs of an action should certainly have a right of appeal, it is for consideration by the Supreme Court Rule Committee whether the applicant for such an order should be able to appeal a refusal without the leave of the trial judge: cf. Supreme Court Act 1981, section 18(1)(f).
I would dismiss the appeal.
DILLON L.J.
The law as to the court’s power under Ord. 62, r. 8 to order a solicitor, and in particular a solicitor acting for a legally-aided client, to bear the costs of litigation personally has been clearly laid down in such cases as Edwards v. Edwards [1958] P. 235 and Davy-Chiesman v. Davy-Chiesman [1984] Fam. 48. The only question in this appeal is as to the application of that law to the circumstances of this case.
The case is bizarre. It is now clear from the judgment of Steyn J. at the trial that all the “incidents” of which the plaintiff complained, both the so-called “water phenomena” and the so-called “dynamic phenomena” came about, in so far as they happened at all, by human agency, and were fabricated by the plaintiff and his wife, or by their teenage son with the knowledge of his parents, in fraud of the defendants. The claim was entirely bogus. It does not, however, automatically follow that the plaintiff’s solicitors were guilty of “a serious dereliction of duty” or “serious misconduct” (the criteria for liability) in allowing the case to come on for trial or in their dealings with the legal aid area committee.
Certainly the relevant entries in the diary kept by the plaintiff and his wife, which came to constitute the further and better particulars of the incidents relied on in the statement of claim, make strange reading, and any lawyer might readily have concluded that it would be a difficult task to establish the defendants’ liability on the balance of probabilities, which is the standard of proof required in civil litigation. But the plaintiff and his wife were elderly people of excellent previous character, apparently sane, and not the sort of people one would readily suspect of fabricating such a case, especially as that involved wrecking their own home as the preliminary to moving out to temporary rented accommodation elsewhere. Indeed, the judge himself referred to his own conclusion as extraordinary, even though he held it to be the only possible finding on the evidence. In addition, there were independent witnesses from the neighbourhood, whose good character was not in question, who believed that they had seen water appearing on the floors and elsewhere in the plaintiff’s house and gave evidence to that effect. There was Mr. Saunders, apparently independent of the plaintiff, who put forward pseudo-scientific theories to explain how what the plaintiff said had happened could have happened, and who was apparently sufficiently qualified to take the measurements and readings which he took, although in truth they were wholly unreliable, and there was also Mr. Bowie, with the qualifications to speak as an independent expert witness, who endeavoured in his report and in the witness box to show that the water phenomena could have happened as spoken to by the plaintiff and could have been due to the defendants’ breach of duty.
579
Against that background, when the defendants asked after judgment at the end of the trial for an order against the plaintiff’s solicitors to pay the defendants’ costs, the onus must have been on the defendants to satisfy the judge on at least the balance of probabilities that the plaintiffs’ solicitors had been guilty of the requisite serious dereliction of duty or serious misconduct. The defendants’ difficulty, in endeavouring to discharge that onus, is that they do not know what passed between the plaintiff’s solicitors and their client or his counsel or between the plaintiff’s solicitors and the legal aid authorities; everything in those fields is privileged and the privilege is the privilege of the plaintiff, not of his solicitors and still less of the defendants. The defendants have therefore to ask the court to draw inferences from the weaknesses in the plaintiff’s case, as formulated from time to time, to which the defendants’ solicitors repeatedly drew the plaintiff’s solicitors’ attention from the outset of the proceedings.
But the defendants’ difficulties do not stop there. In the discussion, after the judgment as between the parties, when the order for costs as against the plaintiff’s solicitors was sought, the judge was told, on instructions, by leading counsel (not Mr. Playford) then acting for the plaintiff, that matters were fairly put before the legal aid committee, that that committee was regularly kept informed of all the developments, and that it was advised of all the summonses and all of the reports and of the advices of counsel. We are now asked by the defendants to say, as a matter of inference and without any evidence, that all those assurances, which the judge apparently accepted, were wrong.
We are asked to conclude that the legal aid committee cannot have been kept properly informed, even though there is no indication that the legal aid authorities have ever complained or sought costs against the plaintiff’s solicitors. Furthermore, in so far as it was recognised in Davy-Chiesman v. Davy-Chiesman [1984] Fam. 48 that a solicitor is in very many circumstances protected from personal liability if he has acted on the advice of experienced counsel properly instructed, the defendants ask us to draw an inference in the alternative from the improbability, or, as they put it, impossibility of proof, of the plaintiff’s complaints, viz. either that leading counsel cannot have been properly instructed when he wrote whatever opinions he did write for the legal aid authorities, or his opinions were so inept and fell so far short of proper discharge of his duty that no competent solicitor, exercising common sense, could have paid any attention to them.
So far as those alternatives are concerned, there is no material whatsoever from which this court could make a finding that counsel was not properly instructed. As to the shortcomings of counsel’s opinions, we have not seen those opinions. It may well be the duty of counsel primarily, but also of the solicitor with due regard to the views expressed by experienced counsel, to weigh the evidence available to his client, if a plaintiff, to see whether the plaintiff’s claim raises a triable issue. It is not the duty of the solicitor to endeavour to assess the result where there is a likelihood of a conflict of evidence between his client’s witnesses and those of the other side: per Sachs L.J. in Carl Zeiss Stiftung v. Herbert Smith & Co. (No. 2) [1969] 2 Ch. 276, 297D. In the 580light of the apparent integrity of the plaintiff, the apparent evidence of his supporting witnesses from the neighbourhood and the reports of Mr. Bowie as a qualified expert witness, I would not be prepared to hold, without ever knowing what the solicitors and counsel did advise their client and the legal aid committee, that the solicitors and counsel must have so fallen short of the proper discharge of their duty that the solicitors ought to be found guilty of a serious dereliction of duty or serious misconduct in allowing the case to proceed with the benefit of legal aid.
In a case such as the present, the charge against a solicitor of misconduct or dereliction of duty, which would have to be made out before the court could impose personal liability for the costs of the action on the solicitor, is a serious charge, with very serious consequences. Such a charge ought not to rest solely on inference without evidence. I appreciate that, as already mentioned, defendants who wish to make such a charge against solicitors for the plaintiff have a difficulty in getting evidence because of the rules of legal professional privilege. Those rules of privilege also, however, hamper the solicitor in seeking to justify his own conduct of the case. The justification of privilege lies in the field of public policy; that a defendant may thereby be precluded from making out a claim that his costs should be paid by the plaintiff’s solicitor personally is part of the price which has to be accepted from rules designed to ensure that a litigant has freedom to consult with his lawyers before his case comes before the court.
This public policy aspect does, however, have further implications. The power of the court to order a solicitor to pay the costs personally where litigation has been initiated or continued unreasonably when it had no or substantially no chance of success is, in an appropriate case, a very salutary power. I do not, however, regard it as at all salutary that a practice should develop whereby solicitors for defendants endeavour to browbeat solicitors for legally-aided plaintiffs into dropping their clients’ cases — or into procuring revocation of the relevant legal aid certificates — by threats that the defendants will seek to hold the plaintiffs’ solicitors personally liable for the costs of the litigation. In Carl Zeiss Stiftung v. Herbert Smith & Co. (No. 2) [1968] 2 All E.R. 1233, 1236, Pennycuick J. said in relation to an attempt by a plaintiff to harass the solicitors for the defendant (by a claim that all funds in the solicitors’ hands were subject to a constructive trust):
“The prospect of this personal liability would be a grave deterrent to a responsible solicitor undertaking the conduct of such an action at all, for … the conduct of the action would represent a gamble on his client’s success, a highly undesirable state of affairs. If he did undertake the defence, the fact that he was at risk in regard to this liability might, and in many circumstances almost inevitably would, tend to influence and hamper him at various stages in the action … He might even find that his interest was in conflict with his duty to his client, for example, in connexion with some suggested compromise. There can I think be no doubt that such a claim would represent a very serious obstruction in the course of justice.”
581
These words can readily be applied to any such brow-beating practice as I have mentioned on the part of defendants or their solicitors, should such a practice develop; indeed, such conduct might be contempt of court.
Finally I agree entirely with the comments of Sir John Donaldson M.R. on the dicta of Lord Denning M.R. in Kelly v. London Transport Executive [1982] 1 W.L.R. 1055, where he suggested that an unassisted defendant who had no claim against the legal aid fund might have a claim for his costs against counsel for the unsuccessful assisted party. I do not see how it can be said that the immunity given to counsel by Rondel v. Worsley [1969] 1 A.C. 191 only applies to claims against counsel by their own clients and not to claims by the other side. I note also that in Davy-Chiesman v. Davy-Chiesman [1984] Fam. 48 it was accepted, rightly in my view, on the wording of the rule that an application for costs under Ord. 62, r. 8 could not be made against counsel: see the judgment of May L.J. at p. 58H.
In the present case Mr. O’Brien, for the defendants, submitted that the solicitors were liable under Ord. 62, r. 8 for any costs wasted by the misconduct or default of counsel instructed by the solicitors, because counsel was an “agent,” within the meaning of the rule, of the solicitors. That submission rests on a misconception of the position of counsel, vis-à-vis his instructing solicitor.
I too would dismiss this appeal.
CROOM-JOHNSON L.J.
I agree with the judgments of Sir John Donaldson M.R. and of Dillon L.J.
Appeal dismissed with costs.
Leave to appeal refused.
Solicitors: L. Watmore & Co.; Barlow Lyde & Gilbert.
R. C. W.
[1]
R.S.C., Ord. 62, r. 8(1): see post, p. 569B–C.
