England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(HIS HONOUR JUDGE PAUL COLLINS)

		Royal Courts of Justice Strand London, WC2
		12th October 2005

1. LORD JUSTICE PILL: This is an application for permission to appeal against an order of His Honour Judge Paul Collins CBE made on 17th February 2005, following a claim for professional negligence by Mehmet Ebcin against Mr Toper Hassan, who is a solicitor. It is a renewed application, permission having been refused on the papers. A short extension of time in which to bring it has been granted.
2. Mr Ebcin (to whom I will refer as "the claimant") is serving a long prison sentence for a drugs conspiracy. That was imposed at the Central Criminal Court on 8th December 2003, though I understand that an appeal against that conviction was pending at the time the present case was heard by Judge Collins. The applicant was the claimant's solicitor from the day of his arrest, 21st March 2002, until after his committal for trial. A Public Funding Representation Order was granted by the magistrates on 23rd March 2002 and, while we have no document to support this proposition, it appears that the order was one which provided only for solicitors.
3. On 10th May 2002 the claimant was released on bail and met with the applicant in his professional office in north London. The two agreed that the claimant would pay the applicant privately for work to be done at the Magistrates' Court, agreeing a sum which the judge found to be £40,000, though the claimant had put it higher. The committal hearing was fixed for 24th May and the claimant paid to the applicant the sum of £40,000 the day before that. It was paid into the solicitors' client account. The applicant agreed a fee of £10,000 for counsel to appear the next day at the committal proceedings, and it was proposed that an application that there was no case to answer would be made by counsel. Counsel (described as Mr L) knew that the funding order was in force.
4. The submission of no case failed before the magistrates. The claimant was committed for trial and the District Judge granted, in the presence of counsel, a Public Funding Representation Order for the crown court. We assume that it was in the usual form which made provision for representation by solicitors and junior counsel.
5. On 27th May there was an acrimonious discussion between two of the claimant's brothers and the applicant. On 29th May the applicant wrote what was his only letter to the claimant, withdrawing from representing him. Of course the existing retainer which was for the Magistrates' Court had by then expired in any event. Thus the applicant represented the claimant from 21st March 2002 until 29th May 2002 and, for all but the first day or two of that period, had the benefit of a Public Funding Representation Order.
6. The applicant then sought to have the representation order discharged. He applied first to the Legal Services Commission. He was told that the application should be made to the Magistrates' Court. We have not seen the letter which was then written to the Magistrates' Court. We have seen the response of Bow Street Magistrates' Court in a document which has the stamp of 9th July 2002 on it and, in the applicant's chronology, it is said that the order was revoked by the magistrates on that date. However, the document itself is dated 22nd March 2002 and purported to revoke the order from the date on which we assume it had been granted, though there is some doubt whether it was 22nd or 23rd March. Nothing turns upon that.
7. Having received the revocation, the applicant paid the sum of £40,000 from his client account into his office account. He paid counsel's agreed fee. The applicant did prepare a bill in the sum £40,000 dated 23rd July 2002. That was ordered by District Judge Sabi Hasan on 4th August 2002 to be assessed. There had been no such assessment by the time Judge Collins heard the case, and we assume that still there has been no such assessment. It would, of course, be for the claimant's solicitor to seek such an assessment if he was challenging the amount of the fee, and no such challenge, as such, has been made. What the claimant claimed in the present action was that the applicant had acted unlawfully to take the sum of £40,000 from him, when at all material times he was an assisted person. Alternatively, the claim was for damages for negligence -- that is breach of duty of care to him, the client -- and breach of fiduciary duty. There was a further claim for negligence in relation to the bail application, but that was not successful.
8. There has, the court is told, been some investigation by the Office for the Supervision of Solicitors, but no action has been taken. The learned judge directed that his judgment in the case be referred to the Law Society.
9. On behalf of the applicant, Mr Alan Newman QC, who has not previously appeared either in the criminal or in the civil proceedings, submits that permission to appeal should be granted. He submits, first, that there is an arguable case that the judge was wrong to hold, as the judge did, in all three respects against the applicant and, secondly, that, under the provisions of CPR 52.3(6), there is some other compelling reason why the appeal should be heard. It is submitted under that head that the construction of section 22 of the Access to Justice Act 1999, and documents pursuant thereto, is appropriately considered by this court, and also that the judge's order has very serious consequences for the applicant and he should have the opportunity to argue his case before this court.
10. On the first question, as to whether the conduct was unlawful, the judge carefully set out his understanding of the appropriate regulations, and came to the conclusion at paragraphs 41 to 43 of his judgment that there was no power in the Magistrates' Court to revoke the representation order retrospectively. Mr Newman bases his submission substantially on documents which were not before the judge, in particular the Legal Services Commission manual which makes detailed provision for the basis on which claims are to be funded. We have been supplied with the full volumes, but also helpfully extracted parts of volume 3 which is entitled "The Funding Code".
11. Mr Newman's first point is in relation to the wording of section 22 itself and to the presence of the word "take" in section 22(2). He submits that the payment was not taken by the applicant, within the meaning of the section, until the £40,000 was transferred from the client account to the office account. The subsection reads:

"A person who provides services funded by the Commission as part of the Community Legal Service or Criminal Defence Service shall not take any payment in respect of the services apart from-

(a) that made by way of that funding, and

(b) any authorised by the Commission to be taken."

12. If the Funding Code was to be relied on it should, of course, have been brought to the attention of the judge. Moreover, looking at the contents page it appears to be concerned with civil legal aid rather than criminal legal aid. While on this issue one would certainly not expect there to be a difference of approach to postdated revocation -- we have to point out that we have not heard argument from both sides, we would not expect to at this stage -- but we cannot be certain that the several paragraphs to which we have been referred do apply to the funding in question. There is a section headed "Withdrawal of Funding", section 15, at 36-1 of volume 3 of the manual. Under the heading "The Funding Code: Procedures" at C51 there is provision for the Regional Director withdrawing funding:

"... by either revoking or discharging a certificate from such date as he or she considers appropriate in accordance with section 14 of the Criteria and these Procedures."

(I believe Mr Newman to be correct in saying that section 14 is a misprint for section 15.)

13. Mr Newman makes points about the difference between the concepts of withdrawal of funding, revocation of funding and discharge. He submits that the judge was wrong in law in the conclusion he reached that there is no power to operate a revocation retrospectively, as the Magistrates' Court, probably (though we do not have the relevant letter) at the invitation of the applicant, has done in this case.
14. I turn to the second ground of application before expressing a conclusion on the first. Mr Newman makes the point that the judge went beyond a mere finding of negligence against the applicant, and went on to state at paragraph 61:

"I am in no doubt that the Defendant's conduct went beyond a failure to take care."

15. Then at paragraph 62:

"All these considerations lead me to the inevitable conclusion that the Defendant [that is the applicant] deliberately took advantage of a vulnerable client for his own financial gain and was in breach of his fiduciary duty towards him."

16. I do not propose to recite at length from the judgment. It appears to me to be a careful and conscientious judgment, the reasoning in which I respectfully agree on the second of the points at issue. The judge referred to the fact that English was not the first language of the client and that he was facing a serious charge. He had just been released at the time of the discussion about money from six weeks in custody and was psychologically vulnerable. The judge held that there was a "marked failure" by the applicant to take reasonable care to discharge his duty to his client. He came to the conclusion that:

"There is no rationale for [the applicant's] behaviour other than a desire to make money."

17. The judge stated:

"A solicitor is under an obligation, imposed by binding rules of professional conduct, to endure that the particular client understands costs implications, makes adequate written records and confirms the position to his client in writing as soon as practicable."

18. In evidence the applicant had told the judge that Turkish people such as the claimant do not believe they get a good service unless they pay for it. As the judge noted, there was no suggestion that the applicant ever took any steps to disabuse the claimant of that notion, save for a slight reference to which the judge referred.
19. The one point made by Mr Newman on that aspect of the case was that there was an advantage to the claimant in paying privately. He submits that it arose from the fact that the order made by the magistrates provided for a solicitor only, and remuneration could be expected from the permission only for a solicitor, whereas by claiming private funding counsel could be instructed to appear at the committal proceedings. Of course it was open to the solicitor to instruct counsel within the limits of his order, and to make some arrangement whereby counsel had a share of the money under the solicitors' order. I make no comment as to the appropriateness of that in current circumstances. It is a practice which has been a very common one over the years.
20. However, there is no explanation whatever as to why, if there was be a submission of no case, application was not made to the magistrates that the order should be extended to cover counsel. We have no evidence of any such application being made, either when the order was first sought or at any stage before the committal proceedings two months later. Nor is there any evidence that any explanation was given to the client as to the legal aid procedure, whereby the order was only for the solicitor. I see no merit at all in that point.
21. I do not propose to deal with the rest of the points ventilated before the judge for the reason I have already given. It appears to me, with respect, that the judge dealt with them in a way which is entirely cogent and convincing. The strong conclusions which he reached as to the conduct of the applicant are set out in the reference to fiduciary duty, to which I have already referred, and as to negligence in strongly, and appropriately strongly, expressed views in paragraphs 58 and following. In my judgment, there is no arguable case that this court might disturb the judge's findings as to negligence.
22. I see no difficulty about his finding as to fiduciary duty. There is no basis for criticising the judge because he has not spelt the ingredients of that claim out in detail and dealt with it more than fully than he did. The particulars of claim did not seek to distinguish between the one and the other. Both claims are made, but particulars are stated which were claimed to support both of them. There was no need for the judge to particularise any more fully than he did. I make that point because of the argument that this is a compelling reason why the appeal should be heard. The judge has made a finding in relation to a breach of fiduciary duty as well as to negligence, and that has significance in relation to any disciplinary proceedings which may be taken in relation to the applicant.
23. In my judgment the entire lack of merit in the application is relevant to both limbs upon which permission to appeal is sought. Its relevance to the second limb needs no further elaboration. In my judgment, it goes also to whether permission should be granted on the first limb. If there is room for further debate on the question of retroactive revocation of representation orders, this case is not, in my judgment, an appropriate vehicle in which to take it. We have not been supplied with material in any comprehensive way, the material was not in any event before the judge, and it is not, in my judgment, appropriate to grant permission on the basis that this court should make rulings upon matters which it is to be hoped would arise only very rarely, if at all. I would certainly not expect them to arise in present circumstances, where the revocation order was sought for the very reason the judge had given. It was sought to enable the applicant to pay £40,000 from his client account to his office account, where he would have beneficial ownership of it, without any consultation with the client and when he was entitled to remuneration under a representation order and could have returned the £40,000 to the client.
24. However, having regard to the material to which our attention has tentatively been drawn and in any event, the refusal by this court of permission should not be taken as giving the imprimatur of this court to the learned judge's finding on this issue. I emphasise that that is no criticism of the learned judge. I find his reasoning on the point cogent, and I find it to accord with what I would expect to be good professional practice. I find no merit in the "take" point; that the money is only taken when it is transferred from the client account to the office account. The judge was correct, in my judgment, to hold that the money was taken at an earlier stage.
25. I simply add that I see no merit in the point made by Mr Newman that the judge's strong findings, to which I have referred, on the fiduciary duty and negligence issues were in some way contaminated by the view he took of the statute and regulations. Whatever is the correct interpretation as to retrospective revocation, it does not, in my judgment, bear upon the conduct of the solicitor or the judge's finding in relation to it. It is not a case where the applicant can say that he had examined all the relevant material and believed that the conduct was therefore justified.
26. Thus while not giving the imprimatur of this court by the refusal of permission -- that of course is stating the obvious, but I thought it right to state it in this case in view of Mr Newman's submissions -- this is not, in my judgment, a case where it is arguable that this court would reverse the judgment of His Honour Judge Collins, and I would refuse the applications.
27. LADY JUSTICE SMITH: I agree and add only this. If the judge's holding in respect of section 22 of the Access to Justice Act had been determinative of the outcome of the case, I, for my part, might have been prepared to grant permission to appeal on the point arising out of section 22. It does appear arguable that the judge erred in concluding that the purported retrospective revocation of the original representation order was of no legal effect. As my Lord has said, the judge concluded that the statutory power to withdraw a certificate does not include a power to revoke the certificate ab initio. We have been shown documents that were not before the judge which suggest that, at least in the context of civil proceedings, it is possible to revoke an order ab initio. It would be strange if the word "withdrawal" were to have different meanings in civil and criminal proceedings.
28. However, I agree that the application for permission should be refused because this issue of revocation was not determinative of the success of the claim. The judge also found in the claimant's favour on the basis of negligence and breach of fiduciary duty. For the reasons my Lord has given, he was in my view entitled to do so. In my judgment Mr Newman has been quite unable to undermine the judge's findings in these respects. Nor am I persuaded by Mr Newman that the fact that the judge's findings might trigger disciplinary proceedings against the defendant can be regarded as a compelling reason for hearing the appeal.
29. Accordingly I too would dismiss the application.

ORDER: Application for permission to appeal refused.

(Order not part of approved judgment) ______________________________