Court rejects ombudsman’s ‘perverse’ costs award

Topics: Costs, fees and funding

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  • Royal Courts of Justice, Strand London

The High Court has sharply criticised the Legal Ombudsman for meddling in matters beyond its own jurisdiction when handling a complaint against a barrister.

The Honourable Mr Justice Coulson said the ombudsman’s decision to award costs to a former client of direct access barrister John Stenhouse was made in breach of the rules of natural justice.

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The £2,609 costs were incurred in the county court during proceedings – stayed until the outcome of this judgment – ongoing between Stenhouse and his client over fees. The issue was not even part of the client’s original eight-point complaint against Stenhouse, yet the ombudsman ruled that Stenhouse should meet the costs triggered by his behaviour.

‘Here, the LO’s findings were irrational and perverse, and therefore should never have been made,’ said Coulson. ‘No authority has been cited to me as to how or why the LO could decide a costs issue which is a matter within the sole jurisdiction of the county court.’

However the judge upheld a £600 award to the client, named as Lucy De La Pasture, to compensate for Stenhouse acting in a ‘discourteous and aggressive manner’ towards her.

The court heard that the barrister knew his client had a brain injury, and in his response to her complaint he suggested her letters were ‘the product of a muddled mind created by your condition’.

In Stenhouse v The Legal Ombudsman & Anor, Coulson said the ombudsman had made the ‘basic’ fault of setting out complaints but then not dealing with each in a clear way. The judge said the ombudsman’s determination was ‘sloppy’ and forced the court to ‘engage in a deconstruction exercise to try and work out’ what was being expressed.

Nevertheless, Coulson upheld the element of the complaint related to Stenhouse’s manner, saying the ombudsman had jurisdiction to make a finding on the issue and was not prejudiced by earlier exchanges between the parties.

The judge added: ‘For the LO, the claimant’s defence of himself exceeded the boundaries of acceptable robustness, and in my view, that was a conclusion which the LO was plainly entitled to reach.

‘In the context of the letter as a whole, it is very difficult to read it as anything other than offensive.’

A theme of the judgment was Coulson’s dismay at the conduct of all parties and even at the case being brought at all.

He explained that the case required three volumes of correspondence and other material, and three volumes of authorities.

‘This is a sorry saga and one from which nobody emerges with any credit,’ said Coulson. ‘No possible stone has been left unturned by both the claimant and the LO.

'The costs and the time devoted to the LO’s complaint process and these resulting proceedings are out of all proportion to the sums at stake. Some may regard it as one of the great glories of the English legal system that so much effort and public money can go into a claim worth at most £3,000. It is not a view that I share.’

No costs order was made, as both parties had been successful in one element each of the case.

Readers' comments (9)

  • The statement that "the costs and the time devoted to the LO’s complaint process are out of all proportion to the sums at stake" pretty much sums up the experience of every solicitor who has had to spend £400 plus several billable hours dealing with an unjustified complaint.

    This seems to be the correct outcome for this case though; it is surely not within the LO's jurisdiction to make costs orders.

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  • This makes it all the more important that people make representations in the strongest terms to the LeO proposal to entertain third party complaints. It raises important issues of privilege and confidentiality (which the courts have confirmed is a fundamental human right), as well as our duties as lawyers to act in the best interests of our clients. I do not immediately see how the Ombudsman can claim jurisdiction having regard to the provisions of s.128 of the LSA 2007.

    For the original Gazette article see http://goo.gl/GbxWEI and for further comment see http://goo.gl/yQHgEa.

    If nothing is done, the consequences will be dire for firms doing debt collection, matrimonial and child care in particular.

    Responses are required by 4 April 2016. So far, I have heard nothing from the Law Society on this.

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  • Frank,

    I wholly agree but I fear that the consultation is a dialogue of the deaf with the LSB neither intent on listening nor able to understand the matters before them.

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  • isnt this an indictment on the Govt/LeO because the office of LeO is deliberately staffed with non-lawyers who, lo and behold, act on behalf of and THINK LIKE the "consumer" complainant therefore they start from the position that all lawyers are overpaid sharks and work from there. full of righteous indignation "how dare that solicitor charge this much or act like that". having said that this Counsel (who I did instruct once, many years ago and whose fee was several times that of counsel in a chambers) appears to have dug his own grave by writing a letter of response in the same vein as the consumer complainant. not being able to step away from agressive and abusive language to write a rational and reasoned response is a severe professional failing it seems to me but not one which is ever stamped on as oodles of correspondence on my dispute resolution files will show.

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  • This just shows that when you a the dog off its leash, you can't expect it to behave as you've trained it to do

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  • 'However the judge upheld a £600 award to the client, named as Lucy De La Pasture, to compensate for Stenhouse acting in a ‘discourteous and aggressive manner’ towards her.'

    Oh, if only it worked both ways. If I'd been awarded £600 compensation each time a client had acted in a 'discourteous and agressive manner' toward me, by now I'd have retired very comfortably!

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  • And what will happen at the office of the LeO? Will anyone be disciplined? Will lessons be learnt and changes made? Can we safely assume that we will not see the like happen again? Not likely! No doubt it will be shrugged off like water off a duck's back. Probably the powers that be will take the view that the Judge was wrong but it isn't cost effective (!) to take the matter further. The likelihood is that the LeO will simply move on to its next crusade without regard to cost and proportionality, justifying this by considering itself to be 'the people's champion' and knowing that whatever, someone else will foot the bill. Such is one of the joys of working in the public regulatory sector!

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  • The SCB used to deal with third party complaints and, in a case of mine where they asked for my file they didn't seem to understand that s.44B of the Solicitors Act wasn't designed to override client privilege. It took the threat of a judicial review before they backed down. Being a composite of the enthusiastically ignorant the LeO is less likely to understand the legal niceties so, if they too start accepting third party complaints I can see quite a few cases coming up where the courts have to reaffirm the importance of privilege.

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  • The term "ombudsman" is misleading. It should be termed "ombudsman's department" since there may be a single ombudsman but applications are handled by a gang of anonymous and often incompetent civil servants if my own dealings with the "Financial Ombudsman" are anything to go by. Each time, one gets a different person on the phone or in a letter, each less competent and intelligent than the last and each eager to palm one off with platitudes and, in the tradition of civil servants everywhere, they do as little as possible to resolve the problem.

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