COSTS ASSESSED AT NIL WHEN SOLICITOR FAILED TO MAKE PROPER INVESTIGATIONS INTO CLIENT'S FUNDING

The case of McDaniel & Co -v- Clark (QBD Hickinbottom J 15/10/14) contains a clear warning that solicitors must make proper enquiries about funding at a very early stage. (This post is based on the Lawtel note of the judgment this morning).

THE ACTION: SOLICITOR AGAINST FORMER CLIENT

The defendant (client)had been injured at work at instructed the claimant solicitors to act on  her behalf.

• The  client was a trade union member who would have been entitled to free representation if the merits of the case were sufficiently high.
• The claimant (solicitor) failed to make any enquiries.
• The client instructed new solicitors who settled her claim.
• The claimant then brought this action against their (former) client seeking their costs.

THE DECISION: COSTS ASSESSED AS NIL

The Master held that, given this failing, the claimant’s costs were unreasonable and assessed them as nil. The claimant appealed. The judge held.

• There was sufficient evidence for the Master to make the findings.
• It was clear in a letter from the trades union that funding would have been provided and that funding was free.
• The evidence was that the union would have taken the case had it been insrtructed from the outset.
• The Master was concerned with a failure to give proper legal advice.
• The defendant had shown, on the balance of probabilities, that she would have taken union funding.
• The Master had been entitled to assess costs at nil.

THE LESSON

It has to be remembered that this was a dispute between solicitor and former client.  It is not clear how far this principle is of relevance in relation to inter-partes costs.  There has always been an obligation on the solicitor to check alternative means of funding.  This may, in fact, be more telling for the client now that there is a possibility that costs could be deducted from the damages.