Suing your solicitor?

One of the incipient developments of the next 12 months, must surely be a “mis-selling” scandal in respect of conditional fee agreements for low value personal injury claims, with solicitor-own client success fees, to clients who have the benefit of Before the Event (BTE) insurance.

In the halcyon days, prior to the 1st April 2013, there was little doubt that the combination of a CFA Lite, coupled with After the Event (ATE) insurance, was an excellent funding option for many clients, particularly in the field of low value personal injury litigation.

Under such an arrangement, the client never had to pay a fee to his solicitors out of his damages, and the additional liabilities of the success fee, and the ATE premium, would be recovered from the paying party.

Although solicitors would (or should have) at the start of their retainer, advised the client of his funding options, they could fairly explain that the client would be no worse off by electing not to use his BTE insurance, and in some ways better off, given the immediacy with which the solicitor could start to work on the case, and the fact that the client had retained the solicitor of his choice.

But with the abolition of recoverability of additional liabilities, since the implementation of LASPO 2012, on the 1st April 2013, the landscape has changed fundamentally. A solicitor who does not advise his client on the benefits of BTE insurance, and who goes on to levy a success fee, paid for now by the client out of his general damages and past special damages, is at real risk of an action for damages for professional negligence.

The Solicitors Code of Conduct in chapter one is very clear on the indicative behaviours which are required of a solicitor, to achieve the appropriate outcomes.

It provides that the following are indicative behaviours:

IB(1.5)

explaining any limitations or conditions on what you can do for the client, for example, because of the way the client’s matter is funded;

IB(1.13)

discussing whether the potential outcomes of the client’s matter are likely to justify the expense or risk involved, including any risk of having to pay someone else’s legal fees;

IB(1.14)

clearly explaining your fees and if and when they are likely to change;

IB(1.15)

warning about any other payments for which the client may be responsible;

IB(1.16)

discussing how the client will pay, including whether public funding may be available, whether the client has insurance that might cover the fees, and whether the fees may be paid by someone else such as a trade union;

IB(1.17)

where you are acting for a client under a fee arrangement governed by statute, such as a conditional fee agreement, giving the client all relevant information relating to that arrangement;

IB(1.19)

providing the information in a clear and accessible form which is appropriate to the needs and circumstances of the client

These provisions have a long history in the former Solicitors Practice Rules and the Codes made under those Rules. A descendant on the distaff side was the former Conditional Fee Agreements Regulations 2000 which largely replicated those provisions, in particular in regulation 4. They are apt to include within their scope, an investigative duty on the part of a solicitor to establish what the clients funding options are.

The leading case of Myatt and Others.v.National Coal Board [2006] EWCA Civ 554 which considered the degree of inquiry a solicitor should make into establishing a client’s funding options had this to say about the factors that a solicitor should bear in mind when making enquiries:

72 First, the nature of the client. If the client is evidently intelligent and has a real knowledge and understanding of insurance matters, it may be reasonable for the solicitor to ask him not only (i) whether he has credit cards, motor insurance or household insurance or is a member of a trade union, (ii) whether he has legal expenses insurance, but also (iii) the ultimate question of whether the legal expenses policy covers the proposed claim and, if so, whether it does so to a sufficient extent. Litigants such as the Myatt claimants and Ms Garrett plainly do not fall into this category: few litigants will. If the solicitor does ask such questions, he will have to form a view as to whether the client’s answers to the questions can reasonably be relied upon.

 73 Secondly, the circumstances in which the solicitor is instructed may be relevant to the nature of the inquiries that it is reasonable to expect the solicitor to undertake in order to establish the BTE position. A good example of the application of this factor is to be found in Pratt v Bull, which was one of the five cases that was heard together with Hollins v Russell [2003] 1 WLR 2487. In that case, the 80-year-old claimant was injured in a road accident. A solicitor visited her while she was in hospital and a CFA was made. At the assessment of her costs, it was argued on behalf of the defendant that the possibility of legal expenses insurance under her home insurance policy had not been fully explored. The court said, at para 138, that there were limits to what can reasonably be expected of the interchange between solicitor and client in such circumstances: “It would be ridiculous to expect a solicitor dealing with a seriously ill old woman in hospital to delay making a CFA while her home insurance policy was found and checked.” It was sufficient that the solicitor had discussed it with her and formed a view on the funding options.

74 Thirdly, the nature of the claim may be relevant. If the claim is one in respect of which it is unlikely that standard insurance policies would provide legal expenses cover, this may be a further reason why it may be reasonable for the solicitor to take fewer steps to ascertain the position than might otherwise be the case.

75 Fourthly, the cost of the ATE premium may be a relevant factor. This is the point made at para 50 of Sarwar v Alam [2002] 1 WLR 125. In our judgment, it is as relevant to a question of breach of regulation 4(2)(c) as to a question of the reasonableness of the premium for the purposes of an assessment of costs pursuant to CPR r 44.4.

 76 Fifthly, if the claim has been referred to solicitors who are on a panel, it may be relevant that the referring body has already investigated the question of the availability of BTE. Whether it is reasonable to rely on any conclusion already reached will be a matter on which the panel solicitor must exercise his own judgment.

 77 It follows from the calibrated approach that we have suggested at paras 72—76 above that we do not consider that it is possible to give rigid guidance as to the questions a solicitor should ask in every case. In particular, in our judgment a solicitor is not required in every case to ask the client who says that he has a home, credit card or motor insurance or is a member of a trade union to send him the policy or trade union membership document (the first of the three approaches suggested by Mr McCue: see para 56 above). In some circumstances, it is reasonable for the solicitor to ask the further question whether the insurance covers legal expenses and to rely on the answer given by the client without further ado. In yet other cases, it is even reasonable to ask the client to answer what we have called the ultimate question.

The duty is also apt to include giving a client advice, on the best means to fund his case. It is not sufficient for the solicitor to set out his options expressionlessly: the duty can include “sending a client down the road”, if that is in his best interests, rather than retaining a client and certainly charging the client a success fee that had he utilised his BTE insurance he would not have had to pay.

Solicitors firms who do not comply with these duties will find themselves the subject matter of a complaint when they deduct a success fee from a client’s damages on the basis that they did not establish a client’s funding options or did not offer objective disinterested advice on what the client’s best course of action was.

The salmon run

Access to justice and angling make for unlikely bedfellows.

For many people, including lawyers, the notion of spending a day motionless, waiting for a salmon to take in the dark peaty pools of a Highland river, or watching a fly anxiously in the shallows of the Trent, might seem only marginally more attractive than watching paint dry.

And few legal historians would imagine that the Anglers Conservation Association (ACA), has much to add to the annals of costs law and practice.

That would be a mistake. For the story of the ACA offers a fascinating insight into both how access to justice and a campaign against environmental pollution has been quietly pursued over 50 years to remarkable effect.

The account that follows, is drawn from “Saving Our Streams” by Dr Roger Bate, published by the Institute of Economic Affairs (2001).

By the mid 1940s, there had been no fewer, than 16 Acts of Parliament, aimed at preventing or at least mitigating, the effects of pollution from the discharge of sewage and industrial waste into rivers and streams, the effect of which was to devastate the rivers and turn them into polluted,sterile, stinking open drains.

All of the Acts of Parliament had conspicuously failed, not least because some of the biggest polluters, were the very local authorities charged with enforcing the legislation.

The effect on the fish, inhabiting those waters, of unmitigated and unchecked pollution was devastating: the rivers were dying not in spite of the action of the state, but in large part because of it.

John Eastwood KC was an angler and a barrister. He had pondered the problem for many years, and in the periodical Country Fair, in 1951 wrote

While pollution was inevitable in Queen’s Victoria’s time, this was no longer the case. During this century science has made such strides that far the greater part of existing pollution can be stopped. This discovery completely alters our sense of values. If a vital industry can get rid of its effluent only by poisoning a river, there seems to be no answer; but if the effluent can be made harmless, is the industry entitled to destroy the pleasure of millions merely for the sake of cheaper production? An entirely new orientation of rights and duties has thus arisen. There is the relative duty of an industry to its shareholders, or a local authority to its ratepayers, and the wider duty of both to the general public. My second discovery was this. To all intents and purposes every Act of Parliament dealing with pollution is a penal Act-that is to say it creates pollution offence which are punishable in a criminal court. There is no Act dealing with the civil rights of an injured person. This has never been necessary because civil rights are part of the common law of the land. They are the basis of freedom, and prescribe that an individual shall enjoy what is his without undue interference.

What John Eastwood knew, was the common law of England and Wales, enabled the owner of land adjoining a river or watercourse to protect it from pollution and excess abstraction of water, through the system of riparian rights.

If a landowner’s water is polluted by another landowner, upstream, the victim of the pollution has a good cause of action against the polluter: this can include both a claim for damages, and also, and more valuably the granting of an injunction to stop the pollution and to restrain any future pollution from the same defendant.

By purchasing, or leasing, land on the banks of rivers and watercourses, individual anglers and angling clubs, gained not only a freehold or leasehold interest in the land, but also the riparian rights which accrued to it: when the watercourse was polluted, and the fish killed or driven off, they had perfectly good causes of action at common law, against the polluters.

But the costs of taking action, and the adverse costs, if an action were lost, were potentially enormous. Many of the defendants in the middle of the twentieth century were nationalised industries, local authorities and blue chip corporations, who might defend the cases robustly.

John Eastwood came up with a novel solution. He devised the idea of an association designed to spread the risk of an action in common law, by raising annual subscriptions among all those with property interests to provide an indemnity or guarantee in respect of legal costs. The association would look for, and pursue suitable test cases, to stop environmental pollution and enforce the riparian rights, necessitating a clean up of affected watercourses. Using a team of solicitor, counsel and expert witnesses, common law actions could be pursued, without fear that a defeat would ruin the individual or club, which brought them.

Thus the ACA (originally the Anglers Co-operative Association) was born.

Eastwood’s appeal was not to notions of public service, but to self-interest: the interests of all anglers, in good clean water, which in turn would mean a plentiful supply of fish.

The most famous case brought by the ACA is undoubtedly the Pride of Derby and Derbyshire Angling Association Limited and the Earl of Harrington.v.British Celanese Ltd, the Derby Corporation and the British Electricity Association [1952] 1 All ER179 and [1953] 1 All ER 1326, which went to the Court of Appeal. 8 miles of the River Derwent were dead, as was 3 miles of the River Trent: the water of the rivers was described as “black, opaque, hot and stinking; the bottom was carpeted with sewage fungus and the temperature of the water was extremely high: often between 90 to 95 degrees fahrenheit. In summer it was completely deoxygenated”.

In 1942 salmon had still run in the Derwent. In 1950, the only life were mosquitos. Fish released into the river died within minutes.

British Celanese was extracting 72 million gallons of water a day from the river. The Derby Corporation and British Celanese were discharging 80 million gallons of untreated effluent a day.

The total flow of the river was only 100 million gallons a day.

The British Electricity Association’s role, was to heat the river water, to a temperature, which was hotter than the Red Sea.

Mr Justice Harman found against all the defendants and issued injunctions against all of them. The Court of Appeal upheld his decision.

By 1958, the last of the injunctions was discharged. The area along the Derwent is now a nature reserve, and the clean river supports, chub, dace, gudgeon, perch, pike, roach and barbel.

And so it continued, with action after action brought over the ensuing years, making the ACA, a voluntary, service led, stakeholder rich private organisation by far the most effective environmental enforcement body in legal history.

As we look at a legal system in 2014, where Legal Aid is disappearing, as a viable means of funding access to justice, and vast numbers of meritorious claims for judicial review against various emanations of the state, or claims under the Equality Act 2010 do not qualify for Qualified One Way Costs shifting, it is worth thinking about the lessons that can be learnt from the anglers, and to contemplate, what other, solutions might exist for those claims despite, rather than because of the actions of the state in facilitating access to justice.