“1. The firm failed to adequately assess CXV’s litigation capacity. 2. The firm have charged excessive costs for the work completed.”
“(1) This Part provides for a scheme under which complaints which— (a) relate to an act or omission of a person (“the respondent”) in carrying on an activity, and (b) are within the jurisdiction of the scheme (see section 125), may be resolved quickly and with minimum formality by an independent person. (2) Under the scheme— (a) redress may be provided to the complainant, but (b) no disciplinary action may be taken against the respondent.” (a) relate to an act or omission of a person (“the respondent”) in carrying on an activity, and (b) are within the jurisdiction of the scheme (see section 125), may be resolved quickly and with minimum formality by an independent person. (a) redress may be provided to the complainant, but (b) no disciplinary action may be taken against the respondent.”
“5.37 In determining what is fair and reasonable, the ombudsman will take into account (but is not bound by): a) what decision a court might make; b) the relevant Approved Regulator’s rules of conduct at the time of the act/omission; and c) what the ombudsman considers to have been good practice at the time of the act/omission.” a) what decision a court might make; b) the relevant Approved Regulator’s rules of conduct at the time of the act/omission; and c) what the ombudsman considers to have been good practice at the time of the act/omission.”
“(1) It is intended to resolve complaints swiftly and informally. In order to achieve this, the Ombudsman will often have to do the best he can on limited material and without hearing detailed evidence. To assist in these objectives, he can rely on evidence which would not be admissible in court, and may draw adverse inferences from failure to provide information or documents. (2) In resolving complaints by reference to the statutory criterion of what is fair and reasonable in the circumstances, the Ombudsman is afforded a considerable latitude of discretion. The test is what “in his opinion” is fair and reasonable. He is not bound by the Approved Regulator’s code of conduct, although he must take account of it. He may apply his own standards of what he considers to have been good practice at the time.”
“21. In exercising powers of review, this court does not put itself in the position of the Ombudsman and test the reasonableness of the decision against the decision the court would make. It does not review the merits of the decision as if it were exercising the statutory powers itself. To do so would be to subvert the intention of Parliament in vesting the Ombudsman with the function of administering the scheme. His decision may only be overturned as unreasonable if it is unreasonable in the Wednesbury sense (Associated Provincial Picture House Ltd v Wednesbury Corporation[1948] 1 KB 223 ). There are a number of different formulations of this well-known and oft-applied test. A common modern formulation is that the decision must be outside the range of reasonable responses open to the decision maker (see e.g. Boddington v British Transport Police[1992] 2 AC 143 at 175H per Ld Steyn). This is a high threshold, particularly in the context of a scheme intended to resolve complaints swiftly and informally in which the decision maker is afforded a wide discretion to do what he thinks is fair and reasonable in all the circumstances. One way in which a decision may pass the threshold is if it is irrational in the proper sense of the word, that is to say if its reasoning is not logically capable of supporting the conclusion (see e.g. R v Parliamentary Commissioner for Administration, ex parte Balchin[1998] 1 PLR 1 , 13E–F per Sedley J and R (Norwich and Peterborough Building Society) v Financial Ombudsman Service Ltd[2002] EWHC 2379 (Admin) at para 59 per Ouseley J).”
“25. Decisions of the Legal Ombudsman are to be read with a degree of benevolence (see R (Siborurema) v Office for the Independent Adjudicator[2007] EWCA Civ 1365 ;[2008] ELR 209 at para 79) and should not be construed as if they were statutes or judgments, nor subjected to pedantic exegesis (see Osmani v Camden LBC[2005] HLR 325 at para 38(9) per Auld LJ).”
“You consider and take account of your client’s attributes, needs and circumstances.”
“clients who have capacity to make decisions and give instructions, but need extra support to do this because of inter alia mental disabilities (this group is considered in the section entitled “identifying vulnerable clients”) clients who lack mental capacity to make decisions and provide instructions, for whom statutory and other safeguards must be followed (this group is considered in the section entitled “clients who may lack mental capacity”). Solicitors are told that they should have “the skills and processes to be able to identify a situation where someone may have reduced mental capacity.””
“One or more of these risk factors may mean that your client is vulnerable and may need your help to express their wishes, understand relevant advice and give you instructions, or that they may lack capacity to make relevant decisions and to give your instructions.”
“Under paragraph 3.4 of the SRA’s Code of Conduct for Solicitors, RELs and RFLs, you must consider and take account of your client’s attributes, needs and circumstances. As such you must satisfy yourself about their capacity if you have any doubts about whether your client has the capacity to give instructions. This is also important as it can enable the client tomake decisions or protect them from making a decision when they lack capacity, and reduces the risk of any subsequent complaint or challenge.”
“my first consideration is if there were any indicators which were present which should have alerted the firm to the fact that the client was vulnerable or lacked mental capacity.”
“By 18 October [2020] it became apparent to both me and the barrister that the client’s behaviour was growing erratic and that on some days she was paranoid and delusional.”
“This was a frontloaded case from the start, requiring my personal daily work and support for a deeply disturbed client.”
“We had a duty to provide extra care given CXV vulnerable state of mind and did our best to support her. However we grew increasingly concerned and ordered a capacity report in November 2020.”
“To make a decision on this complaint I have to consider if when CXV first contacted the firm there was anything to give them an indication that she couldn't give instructions. From the evidence provided, the first point of concern was the meeting in September, and it was clear from the outset that (as I have outlined at point 1.3) CXV was suffering from mental health issues. Having considered all the evidence provided I have concerns that the firm were aware that CXV had mental health issues from the first meeting on9 September 2020 and that they should have taken steps earlier on in the process to assess if CXV had litigation capacity and to make sure she was fully supported to make decisions on what was a very difficult and expensive situation for her. The firm in their correspondence with the Ombudsman highlighted at point 1.7 state that their client was deeply disturbed and was erratic. I agree that the firm provided support to CXV but that was at significant cost to her, and at the outset, the firm should have considered other options such as involving other family members to ensure that CXV understood and was supported in her actions and decision making. This aspect is discussed in more detail in the next complaint.”
“I do not feel that the firm adequately assessed CXVs litigation capacity and took steps once they became aware of issues with mental health. After the first meeting on [8] September 2020 the firm should have looked at appropriate options to ensure she was supported and understood the implications of the decisions she was making, particularly related to the costs that she was building up in a very short space of time with the firm referring to CXVs ‘erratic demands and interactions’. This is discussed in more detail in the next complaint.”
“2.20. If I consider the costs incurred up to19 November 2020 as outlined in the letter of24 November 2020 , this states the costs are now in excess of£65,000 . This is an increase in costs from the original figure given of£43,500 of£21,500 . I do not accept that as part of a reasonable service the firm can incur this level of costs and then notify their client, there has to be transparency around costs and the firm should have completed a costs review at the point that they incurred costs up to£43,500 . If I look at Instruction 1114 (as named in the firms records), which is the instruction related to the children and the one which incurred the most costs, the original agreed costs would have been reached on or around7 October 2020 . 2.21. At the time of the costs review in November 2020, the firm gave a revised estimate of costs up to the December hearing of£75,000 but when they carried out a costs review on22 December 2020 , they confirmed the costs were now in excess of£89,000 . Again, the same principle applies, the firm at the point of exceeding the estimate given of£75,000 should have notified the client and not waited until the fees has exceeded this estimate by£14,000 .”
“2.24. My second consideration is around the capacity to understand the costs. I have already upheld the first complaint against the firm which considered litigation capacity and my concern in this matter is not only that the costs were not clear and agreed to before the work was undertaken but also that CXVs issues with her mental health means that she did not fully understand how costs were mounting at a significant rate throughout the first three months of the instruction to the firm. I take this view as at the outset there is evidence that CXV was concerned about costs (as noted at 2.3 above) but her significant interactions with the firm would have increased the costs but this did not seem to be highlighted in her contacts with the firm and as they didn’t update her on the costs position, she had nothing to track against how the costs were escalating. I would also suggest that this raises issues as to whether CXV could lawfully instruct/validly enter into an agreement in respect of costs at this time. 2.27. I am upholding this complaint and feel that the evidence demonstrates that CXV was not in a position to make a decision on if the costs incurred were being managed and also that the firm did not keep their client updated on costs and how they had significantly increased above their original estimates which would allow CXV to make an informed decision about future engagement. I will summarise my remedy at the end of this decision.”
“I now have to consider that from the outset, CXV did not have capacity to act and therefore did not have the ability to enter into a contract and I have to consider the validity of any agreement to pay fees due. As the contract was potentiallyvoid from the outset, there is a strong argument that none of the firm’s fees are recoverable or payable by the client and a full waiver of costs could be justified. However, I acknowledge that the work that the firm carried out had value and it is fair to them to recognise this. Notwithstanding that, I have to consider what would be an appropriate compensatory award (based on the facts and circumstances of the case) to recognise that the firm entered into a contract with someone who, based on the face of the evidence, did not have capacity to act. I consider that from outset the firm were on notice of the issues and challenges that their client faced and should have had due regard to the SRA guidance.”
“74. First, I consider that the Decision did conflate indications of mental health conditions with indications of a lack of capacity, or at best failed to keep the critical distinction between those concepts in mind. §1.14 of the Decision specifically recorded that “it was clear from the outset that (as I have outlined in §1.3) [the IP] was suffering from mental health issues from the first meeting on [8] September 2020…”