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Context is everything when advising your client on funding

The decision in Surrey v Barnet & Chase Farm Hospitals NHS Trust throws into sharp focus the need to give thorough advice as to funding options, tailored to the particular context of the case and the client. For that reason, it has repercussions beyond its clinical negligence sphere and beyond the switch to the new regime post-1 April 2013.

Although the decision turns on the particular facts, the general comments about funding explanations are worth bearing in mind, not just in future cases about recovery of additional liabilities inter partes where BTE cover of some sort was available, but also on a solicitor/own client basis in thinking about the funding advice which a solicitor needs to give during the course of a case.

Master Rowley held that it had not been reasonable inter partes for the claimant to move from public funding to a CFA, and so it followed that additional liabilities of £109,968.02 were not recoverable from the defendant paying party. One of the main planks of the defendant’s case was that Irwin Mitchell had not advised the claimant fully on the merits or otherwise of a change in funding.

The claimant suffered serious brain damage at the time of his birth in 2004. Public funding was granted in January 2006. On 15 March 2013, the legal aid certificate was discharged and on 21 March 2013 a CFA was entered into with his solicitors, Irwin Mitchell, with an ATE policy being taken out on the following day. By the time of assessment, the success fee was sought at £57,119.40 and the ATE premium at £50,681.78. By the time of the switch, judgment had been entered for the claimant for damages to be assessed, and a roundtable meeting had been arranged for July 2013.

The claimant argued that the fact that the funding switch was a long way through the case meant that this was not a case where Code of Conduct advice to a new client and a “textbook setting out all of the options” was appropriate, and relied on dicta in AMH v The Scout Association about incomplete advice being no bar to a reasonable decision in appropriate circumstances. But, crucially, the solicitor did not advise before the funding switch that if the claim remained publicly funded the sum recoverable as general damages would necessarily be increased (because of the Court of Appeal decision in Simmons v Castle), and the sums in issue were substantial.

The Master said that he did not see any objection to advice being provided on the basis of a particular outcome being preferable, or “nudging” the client, as Master Leonard described it in AMH, but everything was predicated on the basis that the solicitor would set out the various options fully and properly as part of explaining why her advice was to follow a particular course. This did not mean that every single fact and matter had to be set out before compliance had been achieved, but on the facts of this particular case, the failure to give advice regarding the post-LASPO landscape and in particular the Simmons damages, rendered the advice to be insufficient to found any proper or reasonable conclusion. The additional Simmons sum was a material factor which ought to have been mentioned, “borrowing” the definition of “material” from clinical negligence case law, namely Montgomery v Lanarkshire:

“The test of materiality is whether, in the circumstances of the particular case, a reasonable person in the patient’s position would be likely to attach significance to the risk”.

By contrast, earlier in 2015 in Hyde v Milton Keynes Hospital NHS Foundation Trust, the defendant had also argued that it was unreasonable to jettison public funding for a CFA (though there was also a prior question as to whether the clamant could enter into a CFA without formally discharging her public funding). Master Rowley found that the solicitor reasonably considered that the work to be done could not be done under the LSC’s figures and so the advice to switch funding was reasonable. See too AMH, where Master Leonard held that it did not follow that if a funding choice was not made on the best available information, it must be unreasonable. One has to consider whether the choice was reasonable in all the circumstances. On the facts, it was crucial that the client was being offered a CFA Lite, which guaranteed that he would not lose any damages to meet unpaid costs.

It is the concept of materiality which solicitors advising their clients will want to bear in mind. In Montgomery, it was held that “the doctor’s role involves dialogue, the aim of which is to ensure that the patient understands the seriousness of her condition and the anticipated risks and benefits of the proposed treatment and any reasonable alternatives, so that she is in a position to make an informed decision” and an old-fashioned paternalistic approach was deprecated.

39 Essex Chambers Judith Ayling

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