THE PERILS OF THE LAWYER SIGNING THE STATEMENT OF TRUTH: A NECESSARY REPEAT

The previous post about the judgment in North of England Coachworks Ltd v Khan [2020] EWHC 2596 (QB) gives me an opportunity to repeat earlier advice pm the blog in relation to the lawyer signing the statement of truth. In the Khan cases it was the defendant’s solicitor that signed the statement of truth in relation to a series of counter-schedules.  During committal proceedings the defendant admitted that  ” … he caused his solicitor to sign the statement of truth verifying the counter-schedules and at the time of doing so he knew that at least some of the information that was contained therein was false”.  This was not the solicitor’s fault. In some cases, however, litigants, faced with the risk of imprisonment, may attempt to pin the blame on their solicitor.

WORDS THAT SHOULD BE ON THE WALL OF EVERY LITIGATION SOLICITOR’S OFFICE

This this section from Practice Direction 22 – Statements of Truth.

“3.7  Where a party is legally represented, the legal representative may sign the statement of truth on his behalf. The statement signed by the legal representative will refer to the client’s belief, not his own. In signing he must state the capacity in which he signs and the name of his firm where appropriate.

3.8  Where a legal representative has signed a statement of truth, his signature will be taken by the court as his statement:

(1) that the client on whose behalf he has signed had authorised him to do so,

(2) that before signing he had explained to the client that in signing the statement of truth he would be confirming the client’s belief that the facts stated in the document were true, and

(3) that before signing he had informed the client of the possible consequences to the client if it should subsequently appear that the client did not have an honest belief in the truth of those facts (see rule 32.14).”

CASES WHERE SIGNING THE STATEMENT OF TRUTH HAS LED TO PROBLEMS (OR AT LEAST COMMENTS FROM THE COURTS)

 

  • In Recovery Partners GP Ltd & Anor v Rukhadze & Ors [2018] EWHC 2918 (Comm) Mrs Justice Cockerill made some important observations that apply to every aspect of litigation.  We looked at the case yesterday: a stark reminder was provided of the dangers of complacency when dealing with the statement of truth. The defendants’s approach in that case was of concern to the judge because “it indicates that a sense of the very real importance of statements of truth may have been lost in the years which have passed since they were introduced”.
  • Galdikas -v- DJ Houghton Catching Services Ltd [2016] EWHC 1367 (QB) Mr Justice Supperstone considered an application to strike out a defence. when the defendant’s solicitor had used the incorrect wording when signing the statement of truth on behalf of a client. The defendant was given permission to amend. However this shows the importance of using the correct wording.
  • DDJ Lingard in Brown -v- Haven
“This is a case where whatever costs were wasted must be paid. It is also a case where I express grave reservations of the practice of a practice of solicitors in possibly putting too much pressure on employees or alternatively not supervising employees properly and in this case a solicitor ignoring the grave importance of the consequences of a statement of truth signed by a solicitor when clearly there was no authority to do it and in any event what was being signed was manifestly incorrect.”
“The applicant decided that the similar false statements in the particulars of claim (see paragraph 13 above) should not form any basis of the application because Mr Short suggested in his affidavit that the pleading was served without his approval. There is no evidence about that from either of the solicitors then involved at McClure Naismith, one who signed the statement of truth and is still with the firm and another who had control of the case at the time. I pointed out that this may make the entire particulars of claim invalid. I find it surprising that, in modern litigation, a firm of solicitors can still take a statement of truth so lightly”
  • YXB -v- TNO [2015] EWHC 826 (QB) Mr Justice Warby observed that a solicitor had signed a witness statement in support of an injunction application
The first paragraph of the statement said that its contents were within her own knowledge unless otherwise stated. Very little of it could however have been within her own knowledge.”
  •  Bao Xiang International Garment Centre -v- British Airways PLC [2015] EWC 3071 (Ch) the claim form was signed by a partner in the law firm representing the claimants. The judge referred to paragraph 3.8 of the Practice Direction and struck the action out for want of authority.
“In my judgment, none of the 64,697 claimants on whose behalf this claim was brought by Hausfeld has either authorised the bringing of the claim or ratified Hausfeld’s actions in starting the claim on its behalf. I accept the submission of British Airways and the other airlines that in these circumstances, the only possible course for me to take is to strike the whole of the claim out”

 

A DANGEROUS STEP

In signing a statement of truth on behalf of a client, therefore, the solicitor is making expressly, a statement that

  • They are authorised to sign the document.
  • That the solicitor has told the client that they would be confirming on the client’s behalf that the document was true.
  • That the client had been told of the consequences if the statement is untrue (which include the fact that the client could go to jail).

HEADING FOR TROUBLE

If there is a dispute about the truth of a document a solicitor/client relationship is fraught with problems.

  • If the solicitor states that these steps were complied with then the client could be in serious trouble.
  • If the client states that these steps were not complied with then the solicitor (and potentially the client) could be in serious trouble.
  • If there is dispute about what information and advice the solicitor gave to the client then there could be a whole lot of trouble.

At the very least the advice and information given should be recorded in writing.

GUIDANCE ONLINE