QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
B e f o r e :
|THE QUEEN ON THE APPLICATION OF PATRICIA DIXON||(CLAIMANT)|
|LEGAL SERVICES COMMISSION||(DEFENDANT)|
Smith Bernal Wordwave Limited
190 Fleet Street London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)
MR M OTWAL (instructed by Legal Services Commission) appeared on behalf of the DEFENDANT
Thursday, 30 January 2003
Crown Copyright ©
"If, as appears to be the case heavy reliance was placed upon the Londis predictions, was it negligent for reliance to be placed upon them, if such reliance was placed?
"What are the duties of an accountant asked to advise on the viability of a plan such as this being put forward by persons inexperienced in running a retail outlet?
"Ought an accountant to have relied in these circumstances upon the Londis projections?
"To the extent to which the projected figures did not materialise, why?
"Why did the business fail?
"Would the claimant have, in any event, continued with the plan, even if she had received advice that the Londis projections were unsound (if they were)?"
That list does not include all the issues, but sets out, I hope, some of them.
"What advice, if any, was she given by Dyers in respect of the mortgage, and were they retained to advise on that matter?"
Insofar as this issue is concerned, there appears, on the documents available, to be no contemporaneous documentary support for the claimant's case. If she was given the advice which she says she was within the ambit of the retainer, then another issue would arise:
"Would the claimant, in any event, have continued with the project?"
There was material before the committee to show that Dyer rejected the claims made against them by Patricia Dixon.
"This error did not affect legal aid entitlement which continued at least as far as early 1997."
"Would the accountants have advised the proposed Plaintiffs that the business could succeed in being profitable on the basis of the forecasts?"
It seems clear to me that Miss Omar intended that the accountant would see what I have called the Londis projections as amended, in order to answer that question. For reasons which appear to have nothing to do with Miss Omar (who at this stage does not appear to have been involved in the case), the expert was not sent those projections. He was certainly sent a number of documents because in his letter of 6 November (page 335) he refers to "having read and re-read the papers a number of times". The answer which he gave to this question is as follows:
"The accountant would be expected to advise that the business might or might not be a viable proposition but it would be necessary to advise what in this context is profitable and this in turn would depend on how much time and effort the proprietors were able to put into the project.
"Counsel refers at the end of paragraph 5 of her opinion to the fact that 'on or about 28 November 1990 Sue Dyer prepared cash and profit projections for their first 12 months of trading'. Without these projections it is impossible to comment further and it is noted that the comments provided by Dixon and Mooney do not confirm or deny the existence of any such projections. Enquiry must be made as to these projections because a simple comparison of these against the actual figures achieved (which should have been done by the proprietors) would make clear if the business was achieving the desired results."
"From the evidence provided being Dyer's Partnership letters to Lloyds Bank of 20 August 1992 and two letters to the proposed Plaintiff's [sic] dated 21 September 1992 and 18 May 1993 it is clear that the accountants put much effort in providing a professional service to their clients in this instant case."
That answer, of course, does not, on the face of it, relate back to the crucial period between November 1990 and January 1991.
"I had the pleasure of meeting him in conference and in my opinion of the two he was more consistent and without his evidence the case will prove an uphill struggle."
" ... unreasonable ... that the assisted person should continue to receive legal aid."
In May an appeal against that discharge was heard (page 325). That was refused. By then the claimant had instructed another firm of solicitors. The fact that the legal aid was discharged and that, on appeal, that discharge was upheld was a very important plank in the reasoning of the committee, as revealed in the witness statement of the chairman (page 305). I shall return to that a little later.
"Having considered the documentation provided and having heard the Appellant's solicitors [sic] oral representations the Funding Review Committee make the following determination:
"The Committee considered that having regard to Counsel's assessment of the prospects of success which on the 'lost chance' assessment basis is 27%, and having regard to the passage of time which has elapsed since 1990, and the fact that no statements or proofs of evidence have been taken for any of the relevant witnesses, the Committee believed there were very formidable obstacles to success and that a private paying client of modest means would not be advised to incur any additional expenditure.
"The appeal is therefore dismissed."
"I thus respectfully suggest that the Legal Services Committee have misunderstood the issues relating to the discharge of legal aid in 1997. Mrs Dixon's case on causation against Clement Jones is that through their negligence in instructing the accountants a wholly inadequate expert accountant's report was produced and then sent to counsel who Clement Jones should not have been [sic] reinstructed. Counsel then (also wrongly) used this report as one of the reasons she gave for advising that legal aid should not be continued. Mrs Dixon's case is not that the same report and same advice would have been given to the LAB.
"Thus, if Clement Jones had acted competently, I think there is reasonable prospect of establishing that a competent accountant's report and competent advice by counsel would have been produced for the Legal Aid Board. It seems to me that faced with such information and applying the reasonableness test in the 1988 Act the Board would then have continued legal aid."
If the committee were minded to conclude that the 50-50 assessment was a gross overestimate and that the chances of success were no more than speculative, it was, in my judgment, incumbent upon the committee to deal with the points there being made. In my judgment, the committee had to consider whether Clement Jones was negligent in the manner suggested in the note and, if so, what would have been the consequences if they had not been negligent. What is missing from both the decision letter and from the witness statement of Mr Rea is an analysis of this issue.