Recognising the practicalities in Blankley

The question of whether
a client’s loss of mental capacity in the course
of proceedings frustrates
a conditional fee agreement (CFA) is an important one, particularly for solicitors conducting pre-April 2013 personal injury claims, given the change in recoverability.

The question arose in Blankley v Manchester NHS Trust, a clinical negligence claim that started
in 2002 with the client lacking capacity, before regaining it in May 2005, only to lose it again in February 2007. The costs under dispute for the period when she had capacity were £185,000.

Overturning the first instance ruling of Regional Costs Judge Harris in Manchester, Mr Justice Phillips ([2014] EWHC 168 (QB)) said that while incapacity has the effect of removing a solicitor’s authority to act
on behalf of the party lacking capacity for the duration of that incapacity, “such authority can be restored when a deputy
is appointed and provides instructions to the solicitors in that capacity, or otherwise if and when the claimant regains capacity.”

He continued: “There is no reason, as a matter of authority or legal principle, why an inability to instruct solicitors in the intervening period (which may be quite short) should be taken to have the effect of immediately ending a solicitor’s retainer.”

The judge added that the possibility of the client losing mental capacity was plainly “within the reasonable contemplation of the parties”. The fact that the CFA expressly terminated upon death indicated that incapacity
was not regarded as bringing
the contract to an end.

Last week, the Court of Appeal upheld this decision and its reasoning ([2015] EWCA Civ 18). Giving the judgment of the court, Lord Justice Richards said: “Whilst a solicitor’s retainer is in one sense a personal contract,
I very much doubt whether it requires instructions to be given by the client personally even
in the general run of cases.
It must be commonplace for instructions to be given through an agent, such as an accountant or managing agent or a spouse.

“But whatever the general position, the parties must have contemplated in the particular circumstances of this case that the claimant might suffer from a further period of incapacity in which she would be unable to give instructions personally
but they could be given by a litigation friend or a receiver/deputy or on her behalf…

“The fact that supervening incapacity prevented
the claimant from giving instructions personally did not render the contract of retainer impossible of performance;
it simply gave rise to a short period of delay pending appointment of a receiver/deputy who could continue the conduct of the proceedings on the claimant’s behalf and give instructions to the solicitors
for that purpose.”

This is a common-sense decision that recognises the practicalities of a situation where a client loses capacity.
It will lead to swifter access to justice in that there will be no need to enter into a further funding arrangement and it should also avoid further satellite litigation. SJ

Sue Nash is chairman of the Association of Costs Lawyers