A judicial review has overturned in part a decision by the Legal Ombudsman (LeO) to award a family law firm’s client over £50,000 after they complained the firm had failed to adequately assess capacity and charged excessive costs in a divorce matter.
In a provisional decision in August 2023 LeO awarded £35,500 in recompense for failures by Aina Khan Law Ltd to adequately assess their client’s litigation capacity and for charging excessively high costs. A further £1,000 was awarded for ‘distress.’ After further representations, in November 2023 a revised provisional decision awarded the former client £51,192.60 which took into account LeO’s view the client was ‘vulnerable’ from the outset of instruction; did not full understand the costs implications of decisions to continue to instruct her solicitor; and costs reviews were too late and too infrequent. By the time of the first review, costs had exceeded the original estimate of £43,500 by over £20,000 and subsequent reviews at £75,000 and £89,000 were too late. The £51.192.60 was made up of £35,500 as a ‘refund of the costs paid as a remedy for the impact of the firm’s poor service relating to costs’ and £15,692.60 for the failure to adequately assess capacity.
Aina Khan Law Ltd disputed the award, saying LeO had ‘exceeded its remit’ and ‘discriminated’ against the firms by making an award that was disproportionate to it turnover. The firm also said LeO had ‘conflated’ mental illness with capacity and was reliant upon certificates of capacity from after the date of instruction in its case.
In coming to his conclusion David Pievsky KC sitting as a deputy High Court judge, said LeO had indeed ‘conflated’ indications of mental health conditions with lack of capacity, or ‘at best failed to keep the critical distinction between those concepts in mind.’ The client might have been suffering from mental health but LeO had not sufficiently considered whether it was reasonable for a solicitor to have doubts about the client’s capacity; not was there sufficient evidence the solicitor had failed to assess capacity.
Judge Pievsky said LeO had not exceeded it remit, nor had it discriminated against the firm in its award. On the issue of excessive fees, which was a separate decision, the judge said the £35,500 award was not ‘infected’ by other elements of the claim, and should stand.
The quashing order will say this: “the Decision is quashed in respect of the Defendant’s finding that the Claimant failed adequately to assess the IP’s capacity, and in respect of the Defendant’s decision to award the IP compensation in the sum of £15,692.60 as a result of that finding.”
In applying for costs Aina Khan Law Ltd was awarded 40% (£19,036 inc VAT) which accounted for the appeal being partly upheld and the court’s disapproval of delays caused by the failure of the frim to file evidence on time resulting in the postponement of a substantive hearing. The judge also refused permission to appeal.
