Legal Services Commission v Henthorn [2011] EWCA Civ 1415

Case No A2/2011/0606[2011] EWCA Civ 1415
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
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 30/11/2011
Before
THE MASTER OF THE ROLLSLORD JUSTICE LEWISONSIR STEPHEN SEDLEY
Between
LEGAL SERVICES COMMISSIONAppellantAISHA HENTHORNRespondent
Jeremy Morgan QC and Nicola Rushton (instructed by CKFT, Solicitors) for Appellant, the Legal Services CommissionGeraldine Clark and Jennifer Haywood (instructed by DaySparkes) for Respondent, Ms HenthornDinah Rose QC and Ben Jaffey (instructed by Bindmans LLP) for Law SocietyNicholas Bacon QC for General Council of the BarHearing Hearing dates: 7,8 and 9 November 2011
JudgmentThe Master of the Rolls: :The background to this appeal
[1]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.[2]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.[3]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.[4]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.[5]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.[6]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.[7]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

[8]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.[9]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 19. (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).[10]The essential features of the Regulations at the relevant times were as follows.[11]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.[12]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.[13]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.[14]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.”[15]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.[16]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.[17]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) prescribed the times when such payments might be made by the Commission. Para (6) identified the “maximum payment to be made for each [such] claim”, which, “for the financial year 1995/96 and thereafter” was 75%. Paras (7) and (8) of regulation 100 were in these terms:
“(7) The making of a payment under this regulation shall not release a solicitor from any obligation under these Regulations to submit his costs and counsel’s fees for detailed assessment or assessment on conclusion of the case. (8) Where, after taxation or assessment, payments made under this regulation are found to exceed the final costs of the case, the solicitor or counsel (if any) shall, on demand, repay the balance due to the fund and, where the total costs exceed any payments made under this regulation, the balance shall be paid from the fund.”
[18]Regulation 101(1) provided that, “without prejudice to regulation 100”, payments on account could be made in respect of disbursements generally, and of profit costs and counsel’s fees where “delay in the detailed assessment of those costs or fees will cause hardship to the solicitor or counsel”. Para (2) provided that, “without prejudice to regulation 100”, payments on account could be made(a) to a solicitor where the relevant proceedings “have concluded” or the solicitor “is otherwise entitled to have his costs determined by way of [assessment]”, and(b) to counsel if she had not received payment “for at least six months since the event which gave rise to [assessment]”.[19]So far as the actual assessment process was concerned, where a certificate was revoked or discharged, regulation 84(a) stated that, “the costs of the proceedings to which the certificate related … shall, as soon as practicable after the determination of the retainer, be submitted for taxation or assessment”, (and, as mentioned above, the retainer determined on service of notice of revocation or discharge on the solicitor). In that regulation, the reference to “assessment” was to assessment by an Area Director of the Commission under regulation 105, and “taxation” was assessment by a taxing officer of the court. Under the new terminology of the Civil Procedure Rules, “taxation” by a “taxing officer” was replaced by “assessment” by a “costs judge”, and so, in subsequent versions of the Regulations, the reference is to “detailed assessment”. For the purpose of this judgment, assessment under regulation 105 is irrelevant, and I will simply refer to “assessment” to mean assessment by a costs judge.[20]Regulation 84(b) stated that the fund should “remain liable for the payment of any costs so [assessed]”. Regulation 86(1)(a) provided that where a certificate has been revoked, the Commission had “the right to recover from the person to whom the certificate was issued the costs paid or payable under regulation 84(b) …”.[21]Where the proceedings go to trial, CPR 47.1 provides that costs are not normally to be subject to assessment“until the conclusion of the proceedings”. More importantly, by virtue of CPR 47.7, within three months of the conclusion of the case, the solicitor must commence detailed assessment proceedings. (For much of the period relevant to these proceedings, it was the Rules of the Supreme Court or County Court Rules which applied, but it is common ground that the centrally relevant provisionsof those Rules, though different in some respects from the CPR, were identical in their effect for present purposes – see RSC Order 62, rule 29(1) and CCR Order 38, rule 20(1).)In the case of the costs of assisted persons, the normal assessment provisions contained in the CPR (or RSC or CCR as the case may be) apply, but they are supplemented by the provisions of regulations 106A, 106B, 107 and 107A.[22]Further, if the solicitor for an assisted client who was entitled to be paid costs by his opponent failed to have those costs assessed, the Commission could “authorise the making of an application for [assessment] on his behalf…” - regulation 108.[23]As the judge explained at [2010] EWHC 3329, para 36, regulation 112 “provided that, once the bill had been subject to detailed assessment, if any fee claimed by the barrister had been reduced or disallowed on that assessment, the solicitor was, within seven days after the detailed assessment or provisional detailed assessment, to notify the barrister in writing of that reduction or disallowance. The solicitor was also to endorse the bill of costs with the date on which such notice was given or that no such notice was necessary. Where the bill was endorsed with the date of notice, the costs officer was not to issue the certificate or allocatur, which triggered the release of money from the fund, until fourteen days had elapsed from that endorsed date.”

When does time start to run against the Commission?

[24]It is common ground between the parties that all the payments, for which the Commission is seeking recoupment in these proceedings, were made to Ms Henthorn pursuant to regulation 100(2). The first issue is when time started to run against the Commission in relation to such claims.[25]The Commission’s case is that its recoupment claims are governed entirely by regulation 100(8), and that, in relation to any such claim, time therefore begins to run from the date it makes the “demand” referred to in the regulation, or alternatively from the date of the assessment referred to in the regulation.[26]Ms Henthorn’s case, supported by the Bar Council and the Law Society, is that time begins to run from the date that the work covered by the certificate in issue was completed, and regulation 100(8) is simply concerned with a condition precedent before a demand can be made.[27]As a matter of ordinary language, regulation 100(8) can be fairly said to be tolerably clear. It is concerned with the almost inevitable consequence of a “payment of sums on account”, namely that a balancing payment has to be made following the eventual striking of the final account, as there will normally be a net balance one way or the other.[28]Consistently with the Commission’s argument in these proceedings, the regulation appears to provide in simple terms that this balancing payment is to be paid “after … assessment”. In other words, subject to any other point to the contrary, the plain and natural reading of regulation 100(8), when read in the context of regulation 100 as a whole, is that time cannot start running against the Commission (if the balance is in its favour) or against the solicitor or counsel (if the balance is in their favour) until the assessment has occurred.[29]At any rate on the face of it, the only features of regulation 100(8) which appear to give rise to any potential difficulty in this connection are(i) the contrast between “the final costs of the case” where the balance is owed to the Commission, and “the total costs” where money is the balance by the Commission, and(ii) the inclusion of “on demand” where the balance is owed to the Commission but not where it is owed by the Commission. Nobody suggested that feature (i) had any significance, and I agree.[30]So far as feature (ii) is concerned, it founds the basis of the Commission’s contention that time only starts running against it when it first demands any balance found to be due following assessment, rather than once the assessment has taken place. I would reject that contention. In my view, all that the words “on demand” carry with them is an obligation on the Commission to make a demand before taking any steps to enforce its right to recover the balance.[31]Save where it is the essence of the arrangement between the parties that a sum is not payable until demanded (e.g. a loan expressly or impliedly repayable on demand), it appears to me that clear words would normally be required before a contract should be held to give a potential or actual creditor complete control over when time starts running against him, as it is such an unlikely arrangement for an actual or potential debtor to have agreed.[32]In the case of regulation 100(8), I consider that there is a perfectly simple interpretation which pays proper regard to the words, but does not have the disadvantage of the Commission having complete control over when time starts running against it. Time starts running once the assessment is completed in the sense that the Commission has a claim to any balance in its favour from that point, but, in order to be entitled to recover that balance, the Commission must first demand it from the solicitor or counsel concerned. That analysis appears to be consistent with commercial common sense and with the natural implication that the expression “on demand” imposes an extra duty, not an extra benefit, on the Commission when the balance is in its favour, as opposed to when the balance is against it.[33]At any rate at first sight, the notion that the balance becomes payable once assessment has been completed, rather than (as Ms Henthorn’s case suggests) when the work under the certificate in question has been completed, appears sensible. The date of assessment will be the earliest date on which the balance will have been quantified. In my view, therefore, the natural meaning of regulation 100(8), having what (at any rate at first sight) is proper regard to its language, its purpose and its context, is as the Commission, albeit as its alternative argument, contends.[34]I turn, then, to address the reasons why it is submitted that, on closer analysis, the effect of regulation 100(8) is that, rather than running from the assessment, time starts from the date the relevant work done under the relevant certificate is completed. First, it is said that a closer analysis of the Regulations demonstrates that regulation 100(8) does not mean that time only starts to run against the Commission’s claim to recoup a payment made on account once a final assessment of the costs has been effected. Secondly, the view that the balance only becomes due once the assessment is completed is said to be impracticable. Thirdly, the view is said to be inconsistent with a number of authorities, which, while not concerned with the Regulations, give general guidance on this sort of issue. Fourthly, the view is said to be inconsistent with the common law position. Finally, it is argued that the view is inconsistent with a decision of this court which was concerned with the Regulations, namely Legal Services Commission v Rasool [2008] EWCA Civ 154, [2008] 1 WLR 2711. I shall consider these arguments in turn.[35]A number of different arguments based on the Regulations were advanced as to why regulation 100(8) did not have the effect which, as interpreted by reference to its language, as construed in the context of regulation 100, it appears to have.[36]Ms Clark, who appeared with Ms Haywood for Ms Henthorn, supported by Mr Bacon QC, who appeared for the Bar Council, contended that, as regulation 80(c)(iii) and (iv) enabled the Commission to discharge a certificate every time an action brought by an assisted person ended, and regulation 84 then provided for an assessment of costs when a certificate was discharged, it was clear that regulation 100(8) did not have the function which, interpreted on its own, it might appear to have. I do not agree. Regulation 80(c) does not require a certificate to be discharged in any case when an action ends, and so regulation 84 does not automatically apply to every such case. In any event, even if it does apply, that does not mean that regulation 100(8) does not apply according to its terms in a case where a payment on account under regulation 100(1) or (2) has been made.[37]Ms Rose QC, who appeared for the Law Society with Mr Jaffey, accepted that regulation 100(8) did apply in such a case, but contended that the words “after … assessment” in regulation 100(8) were not mandatory, or (to use an expression familiar in contract law) of the essence, in the sense that they did not have to apply before the right to recover under the regulation arose. I cannot accept that submission, which, as she readily accepted, also had to apply to the words “are found”, “the final costs of the case”, and “the total costs”. The regulation would be unworkable if those expressions do not apply, as it would be impossible to identify “the balance”. In any event, the rule that time is not of the essence of a provision which stipulates that an act should be done by a particular time, enables that act to be valid, even if effected after the expiry of the time limit: it does not apply to validate an action before the time limit starts.[38]I turn to the contention that the natural reading of regulation 100(8) would produce an unsatisfactory result in practice: that contention is based essentially on the fact that it would mean that time may not start running for an almost indefinite period, as the assessment may not occur for a long time. As a result, in any case where a certificate has been issued, there is a real possibility that all concerned, the Commission, the solicitor, and counsel, would not know where they are for a very long time, and that they would have to retain their papers and other records potentially indefinitely.[39]At least in connection with claims between a solicitor and the Commission, I see no problem with that. It seems to me important to bear in mind that, as Ms Rose for the Law Society accepted, the solicitor has a duty to ensure that an assessment is carried out. If the Commission will owe money to a solicitor, the solicitor could be expected to press ahead with the assessment. If it is the solicitor who will owe money to the Commission, then I see nothing unfair in the notion that time does not start running against the Commission until the assessment has been carried out: given that it is the solicitor’s duty to press ahead with the assessment process, there is no unfairness on him if time does not start running in his favour until assessment.[40]It nonetheless can be said to be unsatisfactory that a solicitor could postpone time running against him by failing to apply for assessment. In that connection, we were addressed in some detail as to what remedies the Commission might have if a solicitor failed to proceed with assessment in accordance with his duty. It may not be necessary to go into that issue, as I am not persuaded that the argument based on impracticality is made out. Further, the point could be said to arise whichever interpretation is correct, given that it is common ground that the Commission cannot sue for any balance until the assessment is complete. However, it seems to me that the Commission could simply apply to the court to enforce against the solicitor, as an officer of the court, his duty to apply for an assessment.[41]Mr Bacon understandably pressed the point, which I accept, that the position of counsel is not so satisfactory under this regime. If counsel is owed money by the Commission, counsel cannot press ahead with the assessment, and if counsel owes money to the Commission, any delay in time starting to run will be attributable to the solicitor, rather than counsel, not having complied with his duty to proceed with the assessment.[42]Accordingly, there is more force in the contention that it would be unfair on counsel if she might have to ensure that all papers or other records had to be retained for many years, rather than for a fixed period of six years from the time the work was done. However, I do not consider that that is a particularly powerful point. Counsel will have received any payment to which regulation 100(8) applies “on account”, and will therefore be on notice that it will only be after an assessment takes place that the final balance can be struck and money may well have to pass one way or the other. Even though counsel’s position under the Regulations is different from that in common law, it also seems to me to be relevant to bear in mind that counsel’s position with regard to her fees has always been somewhat anomalous in certain respects – in particular in relation to the right to recover.[43]Furthermore, if, as suggested by Ms Clark, time runs from the date the work under a certificate is completed, it would also be potentially unfair on counsel. If money was owing to counsel, but the solicitor did not ensure that the assessment was effected for six years, counsel would be time-barred in any claim for the balance.[44]The question was raised by Lewison LJ whether a solicitor would have a potential liability to counsel for damages if he failed to comply with that duty and counsel suffered loss as a result. None of the parties before us appeared to have any enthusiasm for arguing either way on the point, although provisions such as regulations 82(2)(b) and 112 suggest that there is a powerful case for saying that such a liability exists. Once again, it seems to us that the point could arise whoever is right. At least as at present advised, I can see no reason why counsel who wished an assessment to proceed should not be able to apply to the court, in the same way as the Commission could, to enforce the solicitor’s duty to proceed with the assessment.[45]I turn to the argument based on authorities which are not concerned with the Regulations, most notably Central Electricity Generating Board v Halifax Corporation [1963] AC 785, and Swansea City Council v Glass [1992] 1 QB 844. In those two cases, the court held that there was a difference between the date the claim arose and the date from which it was actionable. However, as is clear from reading each of the speeches in Central Electricity [1963] AC 785 as well as the judgment in Glass [1992] 1 QB 844, it is a question of construction of the relevant instrument, whether statute, regulations, rules or contract, in each case as to whether there is such a difference.[46]In Central Electricity [1963] AC 785, it was held that time ran from the date when certain identified types of asset became vested by statute in the appellant, not from the date the Minister certified, pursuant to the same statute, that the asset had vested in the appellant, in the event of disagreement. In that case, there was a provision under which specific assets were vested on a specific vesting date, whereas here there is no specific provision outside regulation 100(8) giving any right to recover the balance due in respect of payments made under regulation 100(2). In Central Electricity [1963] AC 785, there was no question of a sum becoming due before it was quantified, or even before it was established which way the balance lay. Indeed, as Mr Morgan QC, who appeared with Ms Rushton for the Commission, pointed out, Lord Guest suggested at [1963] AC 785, 806 that a different result might have been indicated if “an action cannot be raised because it was not possible to quantify the claim.”[47]In Glass [1992] 1 QB 844, it was held that time started to run in respect of a claim against the occupier for the cost of works of repair carried out by the Council under statute from the date on which the works were completed, and not from the date on which a notice, required by the statute to be served before proceedings could be brought, had been served. That was a case where the payment could only go one way, namely to the Council, and where the Council would have known how much was due very shortly after the work was done (at the latest), but, until service of the notice, the occupier did not. Quite apart from turning on the statutory wording, the court was attracted by the argument that, given that the Council would always be the claimant, it should not be able to delay time running against it by failing to serve the notice promptly – see at [1992] 1 QB 844, 853.[48]The judge also relied on Hillingdon London Borough Council v ARC Ltd [1999] Ch 139, but, in my view it is not in point, and Ms Clark, who appears for Ms Henthorn, sensibly eschewed any reliance on it. The conclusion in that case reached by Potter LJ (with whom Nourse and Mummery LJJ expressly agreed) was that, where a person has a claim for compensation for compulsory purchase, he has six years from entry (when the right accrued) within which to apply to the Lands Tribunal – see [1999] Ch 139, paras 33 and 42. I do not read the short judgment of Nourse LJ, which is what HH Judge Thornton QC relied on, as going any further than that.[49]I turn to the argument that the right to recover overpayments made on account under regulation 100 should be governed by the same rules as would apply to a solicitor’s right to recover his remuneration under normal privately paid arrangements. In Coburn v Colledge [1897] 1 QB 702, the Court of Appeal held that time started to run against a solicitor when the work was completed, and the fact that section 37 of the Solicitors Act 1843 precluded a solicitor from bringing proceedings for his remuneration until a month after sending his bill did not delay the commencement of the limitation period until the expiration of that month.[50]I do not consider that the reasoning and conclusion in Coburn [1897] 1 QB 702 assists in this case (save that it provides some support for my view that the Commission cannot delay time running against it by delaying service of a “demand”). First, as in the later case of Glass [1992] 1 QB 844, only the solicitor who had to serve the bill could be entitled to a payment, and, unlike the client, the solicitor knew what was owing; it is wholly different under regulation 100(8), where the payment could go either way, and, until assessment, nobody can be sure what the amount will be. Lopes LJ at [1897] 1 QB 702, 709 was clearly impressed with the point that the solicitor should not be able to control the date from which time ran, given that it would always be the solicitor who was claiming.[51]Secondly, Coburn [1897] 1 QB 702 was concerned with a provision which simply imposed a procedural step on enforcing a claim which was assumed already to exist in common law, whereas regulation 100(8) is part of what is an essentially self-contained regulatory scheme, and appears to create the right to recover, and the concomitant obligation to pay, whatever balance is found to be due. The rules applicable to privately funded work are by no means always a safe guide to the rules applicable to legal aid work: that is plain from the very different terms of the Regulations when compared with the legislation and common law rules governing private client work.[52]Finally, there is Ms Henthorn’s reliance (again supported by Mr Bacon) on the decision in Rasool [2008] 1 WLR 2711. That was a case where a certificate was revoked, and so regulations 84 and 86 applied. The Court of Appeal held that time began to run against the Commission in respect of its claim under regulation 86(1) on the date on which the certificate had been revoked.[53]In his judgment, with which Smith and Wilson LJJ agreed, Ward LJ placed great reliance on the fact that regulation 86(1)(a) applied to costs which were “paid or payable”. He considered that it was clear, indeed it was common ground, that time started to run from the date of revocation in respect of costs which had been “paid” and already determined, and he thought it would lead to “absurd” consequences if the same rule did not apply to costs which were “payable” - [2008] 1 WLR 2711, paras 26-28. He also relied on the availability of declaratory relief, the position in private practice as laid down in Colledge [1897] 1 QB 702, and the approach in Central Electricity [1963] AC 785, Glass [1992] QB 844 and the judgment of Nourse LJ in Hillingdon [1999] Ch 139, 157.[54]I am unconvinced that the availability of declaratory relief has any relevance (although the ability to seek an account might have, as mentioned in argument by Lewison LJ). I have already said that I do not think that Hillingdon [1999] Ch 139 assists on the present sort of issue. I can well see the force of the other points, but none of them apply here. The paid/payable dichotomy if time did not start to run from the date of revocation seems to have been a telling reason for his conclusion, but there is no such potential dichotomy here if the Commission is right. The invoking of the common law approach was quite understandable in a case, such as that governed by regulations 84 and 86, where the regulations are silent as to when the claim arises, but the position is very different where there is a specific provision, such as regulation 100(8), which states when the claim can be brought. This point is reinforced by the fact that regulation 100(8) is concerned with some cases where, until assessment, one will not know whether the payment is to be to or from the Commission, whereas under regulation 86(1), the payment could only go one way. The same points demonstrate why Ward LJ’s reliance on Central Electricity [1963] AC 785 and Glass [1992] QB 844 cannot be translated to the present type of case.[55]Indeed, the contrast between the regime contained in regulation 100 and the regime contained in regulations 84 and 86, which is highlighted by the reasoning in Rasool [2008] 1 WLR 2711, can be said with some force actually to support, rather than to undermine, the Commission’s case on this appeal. The inclusion of a provision such as regulation 100(8) in the payment on account provisions can fairly be contrasted with the absence of any such regulation in the revocation provisions.[56]Accordingly, in agreement with the Commission and differing from the judge, I consider that time did not begin to run against the Commission in respect of claims falling within regulation 100(8) until the assessment there referred to had taken place. Accordingly, it is necessary to consider the other defences which have been raised on Ms Henthorn’s behalf. The contention that the proceedings are an abuse or that there is a public law defence[57]The judge held that, even if the claims brought by these proceedings were not defeated on limitation grounds, the proceedings constituted an abuse of process, or that Ms Henthorn had what he called an abuse or public law defence to the claims. It appears from what he said at [2010] EWHC 3329 (QBD), paras 76-81, that the judge’s main reason for accepting Ms Henthorn’s abuse and public law argument was that the Commission had unreasonably delayed in bringing these proceedings to the disadvantage of Mrs Henthorn, in that, before the demands contemplated by regulation 100(8) were made, she had wound up her practice and got rid of her papers, and so could not properly defend the claims.[58]There is, in my view, nothing in that point. Where a claim is based on a statutory right subject to a limitation period, which has not yet expired, it seems to me that it would require wholly exceptional facts before an abuse argument merely based on delay could have any chance of success. It would obviously be different if the abuse was also based on some sort of express or implied promise or clear indication that no claim would be brought, especially if that was acted on by the defendant to her detriment. However, that is not alleged here.[59]As Sir Stephen Sedley said in argument, the better way to put the point would have been that it was an unreasonable exercise of the Commission’s right to have issued any demand, as was required by regulation 100(8), before any of the sums claimed in these proceedings could be claimed. However, as Ms Clark accepted, that would involve Ms Henthorn contending that no reasonable person in the position of the Commission could have issued such demands – i.e. that, in issuing the demands, the Commission was “Wednesbury unreasonable”.[60]Assuming that such an argument is open in principle to Ms Henthorn (even though she did not raise it below), I do not see how it could succeed on the facts. She must, or at least she ought to, have known that all the payments she received under regulation 100(2) were paid on account, she was never told or led to believe that the Commission was abandoning its rights under regulation 100(8), and she never told the Commission that she was proceeding on the assumption that no claim would be made against her under that regulation.[61]The judge appears to have been impressed by the fact that the Commission had published an indication that there might well be an amnesty in respect of outstanding claims it may have under regulation 100(8) “particularly in older dormant cases” and “where the solicitor has not yet submitted a final report or final claim for costs”. However, this indication had not even been published by the time that the Commission made it clear to Ms Henthorn that they were pursuing her for the sums claimed in these proceedings, and, anyway, it is far from clear that the proposed amnesty would have applied to the claims being brought against her. No doubt, when considering the merits of the claims against her, the judge would have taken into account, to the extent he thought appropriate, the delay as explaining why Ms Henthorn’s documentary evidence was sparse and her recollection of relevant events was hazy.[62]In her submissions before us, Ms Clark sought to bolster the abuse argument by relying on the allegedly unsatisfactory nature of the evidence relied on by the Commission to support its contention as to how much had been paid to Ms Henthorn in respect of at least some of the cases the subject of these proceedings and how much work Ms Henthorn had done on those cases. In my opinion, those points do not take the abuse argument further. If and in so far as the Commission’s evidence was insufficient in its extent or reliability to support its case, the judge would have rejected it. If it was sufficient, it is hard to see how it could give rise to an abuse.[63]In any event, it appears to me that the specific points which Ms Clark raised were pretty thin. It is true that there were one or two errors on the Commission’s computer records, and that those records were not compiled with a view to being used in evidence. However, the identified errors were few in number, and they were not of such a nature as to give rise to doubts as to the reliability of the records. Errors are not infrequently found in paper records, and most records, whether electronic or paper, which are used in evidence were not prepared for that purpose.[64]Accordingly, again in agreement with the Commission and in disagreement with the Judge, I am of the view that Ms Henthorn’s defence based on abuse or unreasonableness must fail.

Does Ms Henthorn have a defence to any of the claims on the facts?

[65]In some of the cases pursued on this appeal by the Commission, it appears that, although there was an assessment of costs, the assessment recorded counsel’s fees as “nil”, which on Ms Henthorn’s case was due to a mistake or oversight, as it was clear in each of those cases that counsel had been instructed. In those cases, Ms Henthorn’s case is that she is not bound by the assessment even though it was followed by a certificate or allocatur (“certificate”), as contemplated by regulation 112, on the basis that it would be plainly unjust that she should be liable to return all the money paid on account of her fees, when it was clear that she had done some work.[66]Unattractive though it may be in some cases, I consider that the Commission is entitled to rely on the certificate as containing accurate information to support its claim against Ms Henthorn. The provisions of regulations 100(8) and 112 appear clear: once the certificate has been issued by the taxing officer, the Commission is entitled to rely on it. Given the terms of regulation 100(8), with its reference to “assessment” as the triggering event, and provisions such as regulation 107, it seems pretty clear that “the final costs of the case” and “the total costs” referred to in regulation 100(8) are the costs as determined by the assessment and as certified as such when the assessment is effected by the court. This is supported by the provisions of regulation 112, which emphasise the importance of the assessment process to counsel in relation to her fees. It is also supported by regulation 84(b), which provides that the Commission “remains liable for the payment of any costs … assessed”, notwithstanding the determination of a retainer pursuant to regulation 83, which is concerned with discharge on revocation of a certificate, which, according to regulation 80(c), (d) could be effected when the proceedings concerned “have been disposed of” or when “the work authorised by the certificate has been completed”.[67]The fact that the solicitors may have failed in their duty under regulation 112 to ensure that counsel’s fees were included in the bill or schedule to be assessed, or to ensure that the terms of regulation 112 were complied with does not seem to me to be a matter which can invalidate the Commission’s right to rely on the assessment and certificate to identify the final costs. I would have thought that there must be a strong argument for saying that the court had power to amend a certificate, on the application of counsel (or the solicitor or indeed the Commission), if satisfied that the assessment mistakenly excluded an item (e.g. in respect of counsel’s fees) and that no prejudice would be caused by amending the assessment and certificate accordingly. Furthermore, as mentioned above, it seems to me that there is a powerful case for saying that counsel would have a good cause of action against a solicitor who failed to comply with regulation 112, if that failure caused loss to counsel: the regulation not merely imposes a duty on a solicitor, but appears plainly to do so for the benefit of counsel.[68]However, none of that alters the fact that, at least until it is amended (if it can be amended), a certificate is what its name suggests, namely a document which certifies what it states and can be relied on for that purpose. It is, moreover, a certificate of the court following the exercise of a judicial function.[69]I am also unimpressed with the argument that a “nil” assessment against counsel’s fees on an assessment form somehow enables Ms Henthorn to contend that there is no certificate or assessment binding on her as against the Commission. It seems to me clear that it would be properly open to a costs judge in some cases to refuse any allowance or payment in respect of counsel’s fees, and that would mean that any payment on account which had been made by the Commission in respect of counsel’s fees would be recoverable.[70]It is right to record that, in relation to the instant cases, it is by no means evident that this conclusion would in fact be unfair to Ms Henthorn. First, it seems to me that certain points, which would potentially apply to at least some of the cases, emerged from the evidence. Those points are as follows.(i) Ms Henthorn had had no involvement and had taken no interest in matters concerning her fees;(ii) her clerks were inexperienced and poorly trained, and had no clear idea as to the appropriate level of fees to charge;(iii) her clerks failed to respond to requests for fee note records and had no recollection;(iv) Ms Henthorn had kept no records;(v) Ms Henthorn had not tried to contact her former clerks;(vi) Ms Henthorn’s clerks provided inconsistent fee notes in respect of some cases.[71]Accordingly, the melancholy truth is that Ms Henthorn may, through her clerks, have been the author of her own misfortune in having overcharged or failed to provide fee notes when asked, in having provided plainly unreliable fee notes, or in not challenging assessments (as it may be that regulation 112 was in fact complied with in some of the cases).[72]Secondly, in at least one of the cases being pursued on this appeal, it seems clear that the cases settled on terms that the solicitors who instructed Ms Henthorn were paid a sum which included a payment on account of the assisted person’s costs. The payment in respect of costs in such cases extended to Ms Henthorn’s fees, which appear, at least probably, to have been paid directly to her by the solicitors. In such cases, it seems quite inappropriate that she should have any claim on the fund for her fees. In so far as any sum was paid on account, there is no injustice in requiring her to repay it, as she will have been paid in full by her instructing solicitors out of the settlement proceeds. Ms Clark took the point that, in such a case, the solicitors ought to have accounted to the Commission for the whole sum received under regulation 90, to which I have not so far referred. I accept that argument, but if regulation 90 had been complied with, the Commission would have paid counsel the sum due to her by way of her fees. The fact that the proper procedure appears to have been by-passed, or short-circuited, by the solicitors cannot possibly mean that Ms Henthorn was entitled, in effect, to double recovery of her fees. Accordingly, I do not think that Ms Henthorn has any cause for complaint in such a case.[73]A number of other points were taken by the Commission as to why, on the evidence before him, the judge was wrong to find in favour of Ms Henthorn on certain factual disputes relating to some of the cases. I have some sympathy with those points, but I do not believe that they need to be resolved for the purpose of this appeal in the light of the conclusions which I have already reached.

Would the Commission have had a claim in restitution?

[74]The Commission maintains that, in so far as it cannot succeed on any of its claims by relying on regulation 100(8), it can maintain a claim in restitution. In the light of the conclusions I have reached, it is, I think, unnecessary to address this argument.

The application to admit fresh evidence

[75]It is right to mention that, at the start of the hearing of this appeal, the Commission applied to adduce further documents it had obtained in relation to the payment of Ms Henthorn in some of the cases to which these proceedings relate. We refused the application on the simple ground that, as Ms Clark argued, the Commission could, with reasonable diligence, have obtained these further documents before the trial, and therefore could have adduced them in evidence before the judge. We did not consider that there was any good reason on the facts of this case for departing from the normal rule that this fact should prevent the party seeking to do so from adducing new evidence on an appeal.

Conclusion

[76]For these reasons, I would allow the Commission’s appeal.[77]We were not addressed about the precise consequences of this conclusion, and it may be that judgment should be entered against Ms Henthorn for the whole amount now claimed, namely £80,470.23. However, the parties have permission to deal with that issue in writing when making submissions on consequential issues such as costs (although I doubt that there need be any such submissions, as the Commission has agreed not to seek costs from Ms Henthorn, and nobody is seeking costs in relation to the interveners). In the event of disagreement as to the figure, we will have to decide how to proceed.

Lord Justice Lewison:

[78]I agree.

Sir Stephen Sedley:

[79]I also agree.

Cited in 11 later judgments

and 2 more of the most senior