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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Toovey & Anor, R (on the application of) v Law Society [2002] EWHC 391 (Admin) (18th March, 2002) URL: https://www.bailii.org/ew/cases/EWHC/Admin/2002/391.html Cite as: [2002] EWHC 391 (Admin) |
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QUEENS BENCH DIVISION
ADMINISTRATIVE COURT
Strand, London, WC2A 2LL | ||
B e f o r e :
____________________
THE QUEEN ON THE APPLICATION OF (1) PAUL H TOOVEY (2) STEPHEN B GWENLAN | Claimants | |
- and - | ||
THE LAW SOCIETY | Defendant |
____________________
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Nigel Giffin (instructed by Norton Rose) for the Defendant
____________________
AS APPROVED BY THE COURT
Crown Copyright ©
Mr Justice Stanley Burnton:
Introduction
The facts
“(i) First, an ‘unadjusted basic contribution’ was worked out, based simply on the amount of the firm’s turnover.
(ii) Secondly, the basic contribution was adjusted by applying risk factors according to the nature of the firm’s work.
(iii) Thirdly, a claims adjustment was made by applying a loading or a discount according to the claims record of the principals in the firm. The maximum loading was 100%, and the maximum discount was 30% in 1997/1998 and 65% in 1998/1999. Contributions would be loaded if the ratio of payments out of the Fund to contributions received during the relevant period was greater than 1.2, and discounted if it was 0.8 or less. … there was a ‘cap’ on the loading to which a claim could lead.”
“Waivers
The Society shall have power in any case or class of cases to waive in writing prospectively or retrospectively any obligation on any solicitor, recognised body or registered foreign lawyer under these Rules and to amend or revoke any such waiver.”
“Can I apply for a waiver of the Solicitors’ Indemnity Rules?
Rule 10 of the Solicitors’ Indemnity Rules (at Annex A) enables the Law Society to waive, retrospectively and prospectively, any obligation on a solicitor imposed by the Rules. The Law Society can also amend and revoke waivers that have been granted.
However, Rule 10 does not enable the Law Society to waive the obligation on a solicitor to contribute to the Solicitors’ Indemnity Fund (SIF) in favour of finding alternative means of providing cover. (This would require an amendment to the Rules by the Council of the Law Society with the concurrence of the Master of the Rolls).
In general, therefore, an application for a waiver would involve a request that the Law Society relaxes a particular provision(s) of the Rules.
Who will decide my application?
Your application will be considered by a senior member of staff within the Policy Directorate, usually the Head of the Professional Indemnity Section. The member of staff will have been delegated power by the Professional Standards Committee to consider and grant applications for waivers of the Solicitors’ Indemnity Rules.
In what circumstances will the Law Society grant a waiver?
All applications will be considered on their individual merit. At Annex B is a copy of the Indemnity Waivers Policy. The Policy was formulated to provide guidelines to those who are empowered to grant waivers. Please note that although it is called a “policy” it is a set of guidelines, which is not exhaustive.”
“Waivers might be appropriate in the following circumstances:
(i) to remedy serious injustice resulting from either an anomaly created by, or the strict operation of, the Indemnity Rules:
(ii) to alleviate serious hardship arising out of exceptional circumstances. In considering hardship applications, the following questions should be addressed:
(a) Is the applicant suffering severe financial difficulties?
(b) What are the circumstances giving rise to the hardship?
(c) What other options are available to the applicant?
(d) Is the relief being sought reasonable?
(iii) where the absence of a waiver would involve a breach of the Indemnity Rules which would be no more than in technical character (sic);
(iv) in any other case that is wholly exceptional in character.”
“5. Following the decision to increase the maximum discount to 65%, from last year’s 30% maximum, the amount of “lost discount” has dramatically increased and the cost of the suggested relief has proved to be prohibitively expensive, amounting as it does to some £52.9 million. This would mean that a further £53 million would need to be raised by increasing the general rates above and beyond the amount already needed to finance the 65% level of discount.
6. Although it is disappointing to abandon the prospect of any measure that might encourage greater acceptance of the experience loading formula, it is an example of the inherent problems in attempting to provide a mathematical answer to every possible unfairness in the contribution calculation.
7. In the event that particular and substantial injustices arise from the formula it would remain open to the Law Society to grant waivers as they have done in the past. Between 20 and 25 waivers have been granted this year.”
“It appears to me that a strict application of the Rules has produced an anomalous result in the assessment of the 1998 contribution.”
The complaint in relation to 1997 referred to the fact that one claim had appeared in every year, and stated:
“… I would have thought that if the same matters are used over and over again then there is a danger that we may have been penalised too much in this year as well. I should be grateful if you would look at the figures and confirm that you will also grant a waiver to allow discount to apply to this year also.”
“4. It would appear that the Rules are operating as they should. In view of the claims in the applicants’ claims pool, they have experienced a subsequent loss of discounts. At around 6% of their gross fee income, the initial annual contribution for 1997/1998 and 1998/1999 respectively are not disproportionate.
5. However, the applicants’ statement that the loss of discount they have experienced is disproportionate to the value of the claims in their claims pool appears to merit some consideration. For 1997/1998 the firm attracted neither a claims loading or a discount. A loss of discount equivalent to 15% of the claims pool would have been £4,100.54 but instead, the firm has lost all discount obtainable worth £6,393.60.
6. For 1998/1999 the firm was awarded a claims discount of 16%, worth £4,630.37, whereas the maximum obtainable was 65%, worth £18,810.87. The firm lost discount of £14,180.50 whereas 9% of the claims pool was only £2,035.79.
7. If the loss of discount formula is applied in respect of 1997/1998, a 30% discount would be £6,393.60. A loss of discount if restricted to 15% of the claims pool would be £4,100.54. The applicant would receive a discount of £2,293.06. This equates to a discount of 11%.
8. If the loss of discount formula is applied in respect of 1998/1999, a 65% discount would be £18,810.87. A loss of discount, if restricted to 9% of the claims pool would be £2,035.79. The applicants would receive a discount of £16,775.08. This equates to a discount of 58%.”
“1. To grant Hibberts a waiver of the Solicitors’ Indemnity Rules 1997 such that the practice attracts a claims discount of 11% on the initial annual contribution calculated in accordance with rules 39 and 42.
2. To grant Hibberts a waiver of the Solicitors’ Indemnity Rules 1998 such that the practice attracts a claims discount of 58% on the initial annual contribution calculated in accordance with rules 39 and 42. For the avoidance of doubt the shortfall contribution remains unadjusted.”
“To assist you in preparing your representations you have sought full reasoning for the decision and evidence of the preparation that went into the presentation of your matter. The evidence of preparation is attached in the form of the report that I considered. As to the reasoning for the decision, you will note that I did not accept the recommendations of Mr Dempsey that I should grant relief in respect of both years. In reaching my decision I had regard to the waivers policy (attached to the guidelines) and I took the view that your application did not fall within those guidelines. I also took account of the fact that in respect of both years the contribution as a percentage of declared gross fee income was not disproportionate. I also had regard to the length of time that has elapsed between the periods relevant to your application and the date your application was received. In all the circumstances, I did not feel it was appropriate to grant any relief.”
(1) They had an excellent claims record that was not recognised in the contribution calculations resulting from a strict application of the Rules.
(2) Their contributions were higher than could be considered fair.
(3) Their only paid claims were repeatedly used in their contribution calculations.
(4) The size of their contributions, and the uplift for claims paid by the Fund, were not in reasonable proportion to the value of the claims.
(5) The lost discount should be no more than the 15 per cent and 9 per cent used by Mr Dempsey. Their lost discount represented 23 per cent and 63 per cent of claims in 1997/98 and 98/99 respectively, and was grossly excessive.
(6) The level of discount of 49 per cent received in 1999/2000, with no real difference in claims experience, showed that the discount received for the 2 earlier years was inappropriate.
(7) Mr Dempsey’s memorandum showed that they met the requirement of anomaly as set out in paragraph (i) of the Waivers Policy.
(8) Mr Darby had had a potential conflict of interest: as a result, their application had not been impartially considered. He had as a result taken irrelevant considerations into account, namely the Claimants’ delay in making their application for discount, and failed to take meritorious considerations into account.
(9) Mr Darby had imposed additional waiver-qualification criteria that were not present in the Waivers Policy or in the Rule (presumably a reference to Rule 10).
(10) The decision to refuse waiver was contrary to the previous and continuing practice of granting waivers evidenced in the waiver reports made to the Council.
“5.5 As Mr Darby provides no sound reasons for deducing that we do not meet the waivers criteria we can infer that there are no good reasons. Further, in refusing our application he has disregarded both his previous and continuing practice to grant ‘loss of discount’ waivers and there is a legitimate expectation that having presented a case that demonstrates this particular type of serious injustice/anomaly, and where relief has been granted to hundreds of other such practices, that we too should receive the corresponding and appropriate level of remedy. To refuse a waiver when we meet the criteria and where waivers have been, and continue to be, granted in such cases is unfair, perverse and discriminatory.”
“Of the 566 waivers that were granted 249 related to “loss of discount” waivers. This was a manual fix of an anomalous result in the application of the Rules whereby a firm could experience a reduction in their discount which was detrimentally out of proportion to the value of the claims. Consideration was given to an appropriate rule change at the time but the cost was estimated to be in excess of £50m which was felt to be too high. This has now been ‘remedied’ in the 1999 Rules and therefore this type of waiver will now only exist for firms who are in a nil discount nil loading position….”
The report did not indicate what reduction in discount was regarded as detrimentally out of proportion to the value of claims or the extent of relief granted.
“(1) … The contributions rises suffered by the Claimants were not as high as many others in the profession and were by no means exceptional.
(2) although … the Claimants’ claim history was not such as to cause concern, claims records only formed part of the formula for calculating contributions and were (sic) not on its own a reason for granting a waiver.”
(3) The fact that payments made by the Claimants exceeded the claims paid on their behalf “was not an indication of unfairness - practices who had no claims record could make the same point.”
(4) The fact that a cap on loss of discount had been introduced in 1999 did not justify grant of a discretionary discount. The Rules changed from year to year, and were applied by the Sub-Committee “unless persuaded to grant a waiver, and whilst considering applications will take into account that relieving a burden for one firm might not necessarily be fair to the profession as a whole.”
(5) The fact that Mr Dempsey had recommended grant of a waiver did not bind Mr Darby, who considered each report from a waivers executive on its merits.
(6) As to the contention that Mr Darby had a conflict of interests, he acted under powers delegated by the Council of the Law Society. “The Indemnity Waivers Policy had been introduced by the Sub-Committee to provide guidelines for considering waivers and was used by Mr Darby and the Sub-Committee in their determinations.”
(7) As to the statistics showing the proportion of waivers that had been granted, “each waiver was looked at on its merits, whether by the office decision maker or the Sub-Committee, however when new rules were first made practices might experience circumstances that would justify the granting of waivers. In following years the profession would be expected to have made adjustments to accommodate the changes. It was not possible therefore to read the statistics without looking at the Rules background and, in any event, whilst striving for measure of consistent decision-making, each application was considered … individually and on its merits.”
“there was no serious injustice arising from an anomaly created by, or the strict operation of, the Indemnity Rules;
there was no serious hardship arising out of exceptional circumstances;
there was no question of remedying a purely technical breach of the Indemnity Rules;
the case was not wholly exceptional in character;
no argument had been put forward to show that the waivers policy was not appropriate in this case.”
The minutes stated that the Sub-Committee had considered whether there were any other circumstances justifying the exercise of their discretion to grant a waiver and concluded that there were not. They therefore resolved, by a majority, to refuse the Claimants’ appeal.
The Grounds of Judicial Review
(a) The Claimants had a legitimate expectation that their waiver application would be granted because Mr Dempsey had so recommended: paragraph 6 of the Claim Form.
(b) Irrationality: “there is a disproportion when the Rules produce an uplift for claims that is out of all proportion to the very claims for which the uplift is made.” It was irrational of the Sub-Committee to deny this disproportion and to refuse a waiver in such circumstances: paragraph 8 of the Claim Form.
(c) Misdirection: Mr Darby applied a limitation period in the application of the Waivers Policy.
(d) Perversity on the part of Mr Darby, who said: “I note that your application relates to the 1997/1998 and 1998/1999 indemnity year and on the face on it there would appear to be no reason to deal with your application in advance of those already received.”
(e) Perversity in failing to look solely at whether there was a disproportion in the claims penalty or not (paragraph 9 of the Claim Form, which confuses the question whether an application for waiver should be expedited with the substantive question whether a waiver should be granted).
(f) Breach of Article 6 of European Convention on Human Rights, because the Sub-Committee were not independent or impartial, both Mr Goode and Mr Pharaoh of the Sub-Committee being solicitors in private practice liable for contributions; and in relation to Mr Darby, because he is the company secretary of Solicitors Indemnity Fund Limited.
(g) Breach of the Common Law Rules requiring absence of bias.
(h) Breach of Article 1 of the First Protocol to the Convention.
(i) The conclusions of the Sub-Committee referred to at sub-paragraphs (3), (4) and (5) of paragraph 28 above were incorrect.
“The Law Society has made use of its Waivers Policy. The Law Society has granted ‘Loss of Waiver Discounts’ in all years since 1997. Thus, of the 566 waivers granted in 1998, nearly half, namely 249 were ‘Loss of Discount Waivers’.”
The Claim Form bases no legal conclusion on this statement. The statistics as to the grant of waivers, however, played a large part in Mr Juss’s argument before me.
Legitimate Expectation: Mr Dempsey’s recommendation
Irrationality: “there is a disproportion when the Rules produce an uplift for claims that is out of all proportion to the very claims for which the uplift is made”. It was irrational to deny this disproportion and to refuse a waiver: paragraph 8 of the Claim Form.
Misdirection: application of a limitations period by Mr Darby
Perversity on the part of Mr Darby: paragraph 8 of the Claim Form
Perversity in failing to look just at whether there was a disproportion in the claims penalty or not
Breach of Article 6
Bias at Common Law
“8. In the context of automatic disqualification the question is not whether the judge has some link with a party involved in a case before the judge but whether the outcome of that cause could, realistically, effect the judge’s interest. In the Dimes case the outcome of the litigation certainly could have such an effect on the Lord Chancellors personal position. In Clenae Pty Limited v Australia and New Zealand Banking Group Ltd [1999] V.S.C.A. 35. It was held that the outcome of the litigation could not have had such an effect. That will often be the case where the judge holds a relatively small number of shares in a large company and the sums involved in the litigation are not such as could, realistically, affect the value of the judge’s share or the dividend he could expect to receive….
9. …
10. While the older cases speak of disqualification if the judge has an interest in the outcome of the proceedings ‘however small,’ there has in more recent authorities been acceptance of a de minimis exception: B.T.R Industries South Africa (Pty.) Ltd v Metal and Allied Workers’ Union, 1992 (3) S.A. 673, 694; Reg. v Inner West London Coroner, Ex parte Dallaglio [1994] 4 All ER 139, 162; Auckland Casino Ltd v Casino Control Authority [1995] 1 N.Z.L.R. 142, 148. This seems to us a proper exception provided the potential effect of any decision on the judge’s personal interest is so small as to be incapable of affecting his decision one way or the other; but it is important, bearing in mind the rationale of the rule, that any doubt should be resolved in favour of disqualification. In any case where the judge’s interest is said to derive from the interest of a spouse, partner or other family member the link must be so close and direct as to render the interest of that other person, for all practical purposes, indistinguishable from an interest of the judge himself.”
“If, appropriate disclosure having been made by the judge, a party raises no objection to the judge hearing or continuing to hear a case, that party cannot thereafter complain of the matter disclosed as giving rise to a real danger of bias. It would be unjust to the other party and undermine both the reality and the appearance of justice to allow him to do so.”
(1) The Claimants did not know that their matter would not receive proper or fair consideration.
(2) The Law Society did not advise the Claimants as to the Committee members’ status within private practice.
The first point is irrelevant to the claim of waiver. The whole point of waiver is that a party must decide whether to object to a tribunal before he learns of its decision. The second point does not meet the fact that the relevant information was available to the Claimants had they sought it. Ms Marsay-Jones noticeably did not assert that the Claimants were unaware of the status of the members of the Sub-Committee, although I was told by Mr Juss, on instructions, that the Claimants had not actually known their status.
Article 1 of the First Protocol
The Appeals Sub-Committee were wrong to arrive at conclusions (3), (4) and (5) set out at paragraph 28 above.
Inconsistency
“It was determined within the Indemnity Section that an appropriate level of claims repayment had to be established as without this we would not know to what level the excessive penalty should be reduced. It was advised that the level of claims repayment that might be experienced on the open market would be no more than 45% of a claim’s value – I believe that this figure may have been established by the then underwriter at SIF.”
Ms Marsay-Jones deposed that this figure was applied in practice, by the grant of discounts where the loss of discount exceeded 15 per cent of claims in 1997/1998 (when a 3-year period was used for the determination of claims experience) and 9 per cent in 1998/1999 (when a 5-year period was used). In 1999 the Rules were changed so as to incorporate a 9 per cent cap on loss of discount.
“65. I accept that the Indemnity Section, when considering applications for waivers, did use the 15% cap on loading which applied under the 1997 Rules, and the 9% cap on loading which applied under the 1998 Rules, as a ‘rule of thumb’ when looking at the question of whether a practice’s loss of discount appeared excessive in relation to the size of the claims which it had made upon the Fund. I further accept that waivers were in fact granted in a large number of cases in which the loss of discount exceeded those levels, and that the grant of such ‘loss of discount waivers’ meant that a high proportion of the total number of applications for waiver in respect of the 1997/1998 and 1998/1999 years were successful. It is also true that, at one time, when large numbers of applications for waivers were being received, cases to which that ‘rule of thumb’ applied were fast tracked for consideration, precisely because it was anticipated that waivers were likely to be granted in such cases.
66. But there never was any rule, policy or invariable practice that a firm whose loss of discount exceeded 15% of its claims pool in 1997/1998, or 9% of its claims pool in 1998/1999, would automatically be given a waiver if one was sought, without any consideration of the other circumstances of the case. That would have been quite inconsistent with the whole nature of a waiver as a discretion to be exercised on the merits of the individual case, and with the Waivers Policy. As I have already sought to explain, it would have involved rewriting the Rules in a way that it was not open to us to do, and which would have been contrary to the specific decision not to introduce a cap on loss of discount in 1998.
67. What needs to be borne in mind, when considering the high proportion of applications for loss of discount waivers which were successful, is that those who were most likely to apply for a waiver were those who had suffered a particularly harsh or burdensome result from the strict application of the Rules, and were therefore likely to have a strong case for an exercise of discretion in their favour. This was particularly true of waiver applications made soon after the relevant notices of contribution were issued. It was also the case that, when risk banding was introduced in 1998, practices carrying on higher risk work were vulnerable to losing large sums by way of discount when only one, not especially large, claim had been made against them, and quite a lot of waivers were granted in those circumstances. Later on, and particularly after firms became aware of the introduction of the cap on loss of discount in the 1999 Rules, some of the applications for retrospective waivers that were made were much less obviously meritorious. The application by Mr Toovey and Mr Gwenlan is not the only application for a waiver that was refused even though it was possible to demonstrate that, had a cap on loss of discount been in force, the required contribution would have been reduced.
68. It follows that, whilst a firm’s claims record (including the relationship between the size of its claims pool and the size of its resulting loss of discount) was indeed a factor for me to consider, it was only one of a number of factors that had to be taken into account.”
“Inconsistency
Undoubtedly ministerial and similar decisions can be struck down on the grounds of inconsistency in certain circumstances, which include those in which the authority in question has been inconsistent and has abused its discretion or unfairly misled a party into taking action which it would not otherwise have taken. Undoubtedly, also, the decisions on these applications were wholly inconsistent with the decision on the application against Derbyshire. But in my view, had there been no failure to take into account the meaning of a relevant Circular, and had the determination not been invalidated for any other reason, I would not have decided that they should be invalidated because of this inconsistency, because there is no evidence that it amounted to any sort of an abuse of discretion, and because LPA cannot say that they did anything in reliance upon the Derbyshire decision: they already had in effect, no alternative but to apply to the Secretary of State for these determinations.
Nonetheless there is another respect in which this inconsistency would have troubled me if I had not, by the time I had to consider it, already decided this application in LPA’s favour: for although the Secretary of State has explained why he, by his officials, made the Derbyshire decision in the way in which he did, and although he had explained why he made these determinations in the way in which he did, he has at no point said, in giving very full reasons in the affidavit of Mr. Addison for these determinations, that when making these determinations he took into account, in favour of LPA, the fact that he had already determined the Derbyshire application in its favour. Although it is unnecessary for me to decide this point, I would have given it much closer consideration and thought if the outcome of this application had been dependent upon it.”
“Inconsistency
Insofar as the challenge is based on inconsistency between the first and second decisions, I reject it. I accept that there is an inconsistency, in the sense that the second decision is based on substantially the same material and yet comes to the conclusion that C has no SEN whereas the first decision seems to be premised on a conclusion that C does have SEN. However, all that this tells us is that the decisions differ. Such a difference can be accounted for on a number of different possible bases: that the first decision was flawed in law, that the first decision was reached after an inadequate examination of the facts, that there are borderline cases and different assessments of the same facts can be made at different times by different persons in the Department for Education and Science each of whom is acting within the law, or that there is something unlawful about the second decision. In my judgment there is nothing on the face of it irrational even in the same person reaching a different conclusion when he re-examines the same facts. If the reasons given for reaching the second decision are inadequate or betray illegality then the second decision will be struck down. There is however no legal obligation for him to lengthen his reasons for reaching the second decision by setting out what he considers was wrong with the first decision.”
“Mr. Valentine Holmes, in his able argument for the respondents, asked us to consider whether this House would be justified in disturbing a view of the law which has prevailed for nearly forty years, which has been so frequently affirmed, which has been constantly applied in working out the rights of the parties to commercial contracts, and which, moreover, at any rate furnishes a simple rule against the effect of which the parties to a contract can, if they so desire, expressly provide. These are weighty considerations, but I do not think they ought to prevail in the circumstances of this case over our primary duty of doing our utmost to secure that the law on this important matter is correctly expounded and applied. If the view which has hitherto prevailed in this matter is found to be based on a misapprehension of legal principles, it is of great importance that these principles should be correctly defined, for, if not, there is a danger that the error may spread in other directions, and a portion of our law be erected on a false foundation. Moreover, though the so-called rule in Chandler v. Webster [1904] 1 K B 493 is nearly forty years old, it has not escaped much unfavourable criticism. … I think, therefore, that we ought to regard ourselves as at liberty to examine the challenged proposition freely, and to lay down what we regard as the true doctrine in English law without being hampered by a course of practice based on previous decisions in the Court of Appeal.”
“I would not seek to lay down any general rule as to the circumstances which ought to prevent this House from correcting a long standing error. But one consideration is, I think, of paramount importance. In arranging their affairs people are entitled to rely on a decision which appears to have gone unchallenged, and it would require some exceptional reason to justify a reversal if it appeared that that was likely to create any serious embarrassment for those who had acted on the faith of what seemed to be settled law.”
“It follows that, in my judgment, Simonin v. Mallac cannot now be supported either on the ground that it could be related to some jurisdiction previously possessed by the ecclesiastical courts or on the ground stated in the judgment. No other ground has been suggested in argument in this case or in any of the numerous cases which follow the decision in Simonin's case. Should it, then, be overruled? That is, to my mind, a very difficult question. On the one hand, it has stood for a century virtually unchallenged and it has very frequently been followed. I do not think it necessary even to mention the numerous decisions which found on it. On this aspect the case could hardly be stronger. But, in my view, there is very little else to be said in favour of the decision. It would have been a compelling reason against overruling that decision if it could reasonably be supposed that anyone has regulated his affairs in reliance on its validity, but it would be fantastic to suppose that anyone has married, or indeed entered into any kind of transaction, on the faith of being able to obtain a decree of nullity in a particular jurisdiction. And no decree of nullity already pronounced could be affected.”
Conclusion
Other matters
Disposition
Case No: CO/3334/2001
Neutral Citation No.: [2002] EWHC 391 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand,
London, WC2A 2LL
Friday 18th March 2002
(1) PAUL H TOOVEY (2) STEPHEN B GWENLAN |
Claimants |
|
- and - | ||
THE LAW SOCIETY | Defendant |
The calculation of the Claimants’ contributions
MR JUSTICE STANLEY BURNTON: My judgment in this matter has been distributed in draft, there are some changes between the draft and the final judgment, they are relatively minor, and for the reasons set out the application for judicial renew is dismissed.
I have received a chronology, which I have not read, Mr Juss, and a letter of 18th March, which I have not read. Do you want to tell me about them?
MR JUSS: My Lord, basically the position is as follows, there are, might I just say, negotiations, even as we speak, afoot between Mr Toovey and Lawton Rose (?) with a view to deciding how to proceed, and if they will be able to offer what we want then, of course, our position would be different in the light of that.
But, basically, in the light of the fact that there is going to be an application this morning, as we speak, that there be costs paid by Mr Toovey on an indemnity basis that hangs on a number of matters, one of which is that the application of malice was raised by us.
MR JUSTICE STANLEY BURNTON: You will not have noticed, you have not had time to, Mr Juss, I changed that paragraph to read: "malice or other improper motive" because I certainly did understand the submission to be that because Mr Derby had been pushed into accelerating the claimant's case, he decided against them; he resented that and decided against them. That is what I understood the allegation to be.
MR JUSS: Your Lordship will recall how that point was raised by myself on the hearing, and I took you to Part 8 of the claim form. I said that if one looks at the facts and looks at the correspondence one finds an acrimonious set of correspondence between the parties. In the light of that fact the decision, eventually reached by Mr Derby, is not rational. It may well be that that might be the backdrop to it, at which point my learned friend rose to his feet and said: "If malice is being alleged then this ought to be properly pleaded." I said that it was not being alleged, and your Lordship then uttered out aloud that malice was not an allegation. My Lord, it never surfaced in argument again, and if one looks at the affidavit of Mr Toovey malice is not alleged at all; discourtesy is alleged, but malice is not.
MR JUSTICE STANLEY BURNTON: It is touched on, as I said in my judgment, it is an odd paragraph in his affidavit, is it not? Anyway, if I am assured that no allegation of malice was intended, I am perfectly happy to take out that paragraph of the judgment.
MR JUSS: I am grateful, my Lord. My Lord, might I just say this. We on this side feel, Mr Toovey feels, that he has conducted himself in a most commendable manner, every extension that has been applied for he has acceded to and all correspondence has been totally courteous. If, in the light of that, there is to be any allegation of discourtesy by Mr Toovey, it naturally is a matter that will concern us. So, unless it can be substantiated in any way, it really out to be taken out.
MR JUSTICE STANLEY BURNTON: I shall, subject to what Mr Giffin may say, happily remove that from the final judgment. I shall withdraw these versions and versions with that paragraph omitted will be available by 10.15, and I shall deal with it in that way.
MR JUSS: My Lord, the only other thing is that, of course, since I am on it, if one looks at the grounds for alleging, or asking, for costs on an indemnity basis, one goes to the four grounds, and one of them is that the whole of the second day was taken up with a totally improper allegation that the judge had recused himself. My Lord, I was uncomfortable making that application, I do accept that I did make it, and matters just moved on. In fact, the second day was not as productive from our point of view. The second day was the day when your Lordship said, 'Well look, let us see what else you can come up with.'
MR JUSTICE STANLEY BURNTON: The application to recuse did not take more than 20 minutes or so.
MR JUSS: Yes, my Lord, and that was not causative of extra costs. So if that is being used as a basis to ask for costs on an indemnity basis that really is -- the only thing, my Lord is----
MR JUSTICE STANLEY BURNTON: Should not Mr Giffin make his application before you respond to it?
MR JUSS: Yes, my Lord. Might I just say that the only thing I would say, if your Lordship is in the process of looking at the decision, and possibly amending parts of it, your Lordship made the point, in fact this was also raised by the other side, that paragraph 29 had the greatest mileage in it, and paragraph 29 deals with the statistics that I raised. My Lord, I thought that, although your Lordship is entirely right to say that, in the claim form that is set out but no conclusions are drawn in the claim form. The way in which the case ran throughout was on the basis that if 355 applications had been allowed and only eight had been refused, what we were saying was that our case was as meritorious as any of the others. We were, in fact, therefore, drawing a deduction from those facts, and if it is going to go away----
MR JUSTICE STANLEY BURNTON: What was the deduction?
MR JUSS: The deduction was precisely this, my Lord, that---
MR JUSTICE STANLEY BURNTON: That "if they got, we should get"?
MR JUSS: Yes, we would say that like cases must be treated like. That it is a phenomenal disparity, my Lord, that 355 are allowed and eight are refused.
MR JUSTICE STANLEY BURNTON: I addressed all that in the judgment.
MR JUSS: What your Lordship said in the judgment was no conclusions must be drawn from that, and this is the best argument that there is.
MR JUSTICE STANLEY BURNTON: In the claim form no conclusion was drawn, and the only such conclusions, as there were, were made in submissions.
MR JUSS: Could it be added that there were submissions to this effect in relation to that? In paragraph 29 that point is not made and that is the only thing we say.
MR JUSTICE STANLEY BURNTON: From paragraphs 59 on I make it clear. I dealt at length with your argument on inconsistency. Indeed, it gets something like 20 paragraphs, more than anything else, and I would not have done that if there had been no argument on it.
MR JUSS: Indeed, which is why, my Lord, as I say, in relation to the malice argument as well, there are at least two occasions in the judgment when your Lordship does say that the essential argument is that of common interest rather than malice per se. If your Lordship has addressed this point subsequently, then it ill-fits with the apparent impression given at paragraph 29. But if the point could be simply made that "In argument counsel addressed/purported to say the following points..." or something like that. It would not detract, my Lord, from the point your Lordship makes, which is that in the claim form it is true that we do not draw any conclusion from it.
MR JUSTICE STANLEY BURNTON: It is now paragraph 31.
MR JUSS: Paragraph 31 deals with legitimate expectations.
MR JUSTICE STANLEY BURNTON: No, you are probably not looking at the final version. It says this: "The Claim Form bases no legal conclusion on the statements. The statistics as to the grant of waivers, however, played a large part in Mr Juss's argument before me." What else do you want me to say?
MR JUSS: My Lord, my concern was heightened in relation to this because of the application to be made by my learned friend which focuses on paragraph 29.
MR JUSTICE STANLEY BURNTON: Let him make his application then you can reply to it. Mr Giffin, do you have any applications to make?
MR JUSS: My Lord, subject to how Mr Toovey gets back to me in the next five or ten minutes or so, my application would be that really there ought to be no order as to costs in this.
MR JUSTICE STANLEY BURNTON: Do you have an application other than that, are you asking for leave to appeal?
MR JUSS: My Lord, this is something we will appeal if, in fact, the response from the Law Society is not favourable this morning.
MR JUSTICE STANLEY BURNTON: You must either ask for leave to appeal or not. This is the occasion when you must decide what you are doing.
MR JUSS: Could I just say that Mr Toovey has been negotiating throughout the weekend and this morning, now this court is sitting an hour earlier than it would normally, and by 10.30 I am sure we will have a response. My Lord, the position is this, I can tell the court the position is this---
MR JUSTICE STANLEY BURNTON: Yes?
MR GIFFIN: My Lord, there has, I now believe, been a successful attempt to take instructions this morning. If I were to have, I think, one minute, I think we might find that I could invite your Lordship to make an order by consent without----
MR JUSTICE STANLEY BURNTON: Are you asking me to rise?
MR GIFFIN: My Lord, yes, if your Lordship would do that.
(The Court Rose)
MR GIFFIN: My Lord, I am able to tell your Lordship it is agreed between the parties that, subject to the court being willing to make this order, the order should be an order for costs in the defendant's favour on the standard basis from the date on which Lawton Rose came on the record, I am afraid I cannot give your Lordship that date at the moment and that there be no other order. On that basis, the claimant will not be seeking permission to appeal. I am sorry that communication difficulties meant that we were not able to sort that out before your Lordship came into court.
MR JUSTICE STANLEY BURNTON: It is agreed then, Mr Juss?
MR JUSS: Those are also my instructions.
MR JUSTICE STANLEY BURNTON: I see no reason why I should not make such an order. But, I think, I hinted in almost the last paragraph of this judgment, that other means of disposing of this dispute would have been very sensible, simply having regard to the amount involved. There we are, it has taken to this late stage. Thank you both very much.
MR JUSS: My Lord, can I just ask that the amendments that I proposed this morning be taken on board?
MR JUSTICE STANLEY BURNTON: I did take them on board, Mr Juss, and I am taking out the paragraph I said I would take out a moment ago.
MR JUSS: My Lord, on the suggestion that the grounds of review tended to alternate. The grounds of review were exactly those set out in the claim form. They were followed word by word exactly as they stood.
MR JUSTICE STANLEY BURNTON: There we are.
MR JUSS: My Lord, finally, may I say, this has been a difficult case.
MR JUSTICE STANLEY BURNTON: Mr Juss, I appreciated that you were in a difficult position. I have softened to some extent, as you will see, if you look at the final version, and what was said at the end. I appreciated the difficulties of your position.
MR JUSS: It is also very difficult to (inaudible) between one's duty to the court, which is very, very high, but equally high is the duty to one's client----
MR JUSTICE STANLEY BURNTON: There are occasions when one has to turn to one's client, even a client who is a solicitor, perhaps when it is a solicitor it is more difficult, and be firm. I appreciate that when one is under pressure it is sometimes difficult to realise where the line is, and I was not suggesting in any way that you had been guilty of anything in the shape of misconduct, but one is concerned that applications, such as the application to recuse, are becoming very common; they have become fashionable. I have increasingly seen cases in which applications to recuse a judge have been made in circumstances where three or four years ago no one would have dreamt of it. I did feel I had to say something about it.
Good, unless there is anything further, the corrected amended version of the final judgment will be here by 10.15, if not earlier.
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