David Truex, Solicitor (a firm) – v – Kitchin  EWCA Civ 618
The Appellant acted for the Respondent in family proceedings and at the outset, the Respondent informed the Appellant that she would have to borrow money from her parents to meet the costs. She also informed them that a company jointly owned by herself and her husband had dividends of £100,000 per year, although she had no idea of the company’s finances and that her £4,000 salary had not been paid.
About three weeks after the Respondent had instructed the Appellant, her father enquired about public funding for her. The Appellant stated that legal aid work was not undertaken by the firm but the Respondent could be referred to another firm of solicitors that did. Eventually, the Respondent did transfer her instructions to another firm of solicitors and she was granted public funding immediately.
The Respondent had paid £9,000 on account of costs but the Appellant alleged that £21,000 worth of work had been carried out and so brought a claim against the Respondent in respect of this. The Respondent denied liability for the fees and counterclaimed for the money she had paid on account and alleged that the Appellant was negligent by not advising her that she might be eligible for public funding.
The Appellant argued that in light of the Respondent indicating at the outset that a company she jointly owned with her husband paid dividends of £100,000 per year, no reasonable solicitor would have formed the view that the Respondent was eligible for legal aid and that a solicitor was entitled to a period of time during which they continued to take instructions and carry out certain investigations so as to ascertain the client’s eligibility for public funding.
However, the Court of Appeal found that the so-called dividend had to be assessed in context and held that at the outset, a solicitor must be bound to consider the question whether a client might be eligible for legal aid. Therefore the appeal was dismissed.