TAKE CARE: THE SOLICITOR SIGNED THE STATEMENT OF TRUTH ON MATTERS WHICH WERE FOUND TO BE “DIRECTLY UNTRUE”
I am picking up another point from the judgment in Beattie Passive Norse Ltd & Anor v Canham Consulting Ltd (No. 2 Costs)  EWHC 1414 (TCC). That is the care that must be taken when a solicitor signs a statement of truth. In this case a solicitor signed the statement of truth in a case where the judge found that the statement was clearly untrue. There was no criticism of the solicitor, but this case does highlight the care that must be taken when the statement of truth is signed by a lawyer. Here we look at that case and then review the Practice Direction and earlier cases on difficulties that arise when the solicitor has signed a statement of truth.
THE ISSUE IN THE BEATTIE PASSIVE CASE
The defendant made a request for further information. That information was provided by the claimants in replies which had a statement of truth signed by their solicitor.
30. There is another point on the pleadings which makes this approach by the claimants even worse, in my judgment, in terms of impropriety. This is that Canham made a Request for Information about both the Particulars of Claim and the Reply. Request 22 asked the following, in respect of a phrase used by the claimants that had referred to “significant deficiencies in the design and therefore the construction of the foundations….”
“22. Is it the Claimants’ case that the foundations (including the ground beams and any connecting features) were constructed in accordance with the Defendant’s design?”
The answer, which was served by the claimants on 13 March 2020, was as follows:
“Yes, as far as the details in the design could be discerned.”
31. This answer is completely factually inaccurate. This is a more polite way of saying directly untrue. The Further Information was supported by a Statement of Truth, but this was signed by one of the claimants’ solicitors, not a director of either of the claimant companies. I have found at  of the substantive judgment, in the passage quoted above at , that the two directors who gave evidence before me knew that the foundations had not been so constructed. The claimants’ solicitors must have been instructed by the claimants that answer 22 was true, otherwise they could not have signed the statement of truth. From that date on, the claimants were advancing a plainly untruthful case on a major and central point in the litigation. There is simply no excuse for this, and none has been proffered.”
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  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  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.”
- GB Holdings -v- Short  EWHC 1378 (TCC) where Mr Justice Coulson observed
“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  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  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.
- District Judge Neil Hickman on Statements of Truth and nothing but
- Andrew Parker on Beauty is truth..