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||Neutral Citation Number:  EWHC 612 (Admin)
||Case No: CO/1647/2015
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
||Birmingham Civil and Family Justice Centre
33 Bull Street, Birmingham B4 6DS
||18 March 2016
B e f o r e :
THE HON MR JUSTICE COULSON
|| Mr John Stenhouse
||- and -
||The Legal Ombudsman
- and -
Miss Lucy De La Pasture
The Claimant appeared in person
Ms Rebecca Stickler (instructed by General Counsel) for the Defendant
The Interested Party did not appear and was not represented
Hearing dates: 17 and 18 March 2016
HTML VERSION OF JUDGMENT
Crown Copyright ©
The Hon. Mr Justice Coulson:
- This is a sorry saga and one from which nobody emerges with any credit.
- In October 2010, the Interested Party ("IP") engaged the claimant on a direct access basis to assist her in a negligence claim against a surveyor following her purchase of a house at auction. The claimant and the IP concluded a CFA. Almost four years later, in June 2014, the IP terminated the CFA and, on 11 August, she sent the claimant a formal letter of complaint. On 12 September, she complained to the defendant ("LO") about the service provided by the claimant.
- The complaint process involving the LO proceeded side-by-side with the claimant's county court action against the IP for unpaid fees, which are currently stayed awaiting the outcome of these proceedings. On 17 February 2015, the LO's investigating officer produced a Recommendation Report ("RR") and, on 12 March 2015, the LO produced a Determination. In the latter, two separate criticisms were made of the claimant.
- On 7 April 2015, the claimant commenced these proceedings, seeking judicial review of the Determination. On 21 July, permission to bring these proceedings was refused but on 4 November, Lang J granted permission at an oral hearing.
- There are three volumes of correspondence and other material, and three volumes of authorities. 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.
2. THE LAW
- The Legal Ombudsman Scheme
- The Legal Ombudsman Scheme ("the Scheme") was created by Parliament by Part 6 of the Legal Services Act 2007 ("the Act"). Section 113(1) indicates that the purpose of the scheme is to enable complaints to "be resolved quickly and with minimum formality by an independent person". Section 137(1) provides that a complaint is to be determined "by reference to what is, in the opinion of the ombudsman making the determination, fair and reasonable in all the circumstances of the case".
- Relevant sections of the Act to which reference was made during the course of argument include:
"125. Jurisdiction of the ombudsman scheme
(1) A complaint which relates to an act or omission of a person ("the respondent") in carrying on an activity is within the jurisdiction of the ombudsman scheme if–
(a) the complaint is not excluded from the jurisdiction of the scheme by section 126, or by scheme rules made under section 127,
(b) the respondent is within section 128, and
(c) the complainant is within section 128 and wishes to have the complaint dealt with under the scheme.
(2) In subsection (1) references to an act or omission include an act or omission which occurs before the coming into force of this section.
(3) The right of a person to make a complaint under the ombudsman scheme, and the jurisdiction of an ombudsman to investigate, consider and determine a complaint, may not be limited or excluded by any contract term or by notice.
(4) The second condition is that–
(a) the services to which the complaint relates were provided by the respondent to C;
(b) the services to which the complaint relates were provided by the respondent to an authorised person who procured them on C's behalf;
137. Determination of complaints
(1) A complaint is to be determined under the ombudsman scheme by reference to what is, in the opinion of the ombudsman making the determination, fair and reasonable in all the circumstances of the case.
(2) The determination may contain one or more of the following–
(a) a direction that the respondent make an apology to the complainant;
(b) a direction that–
(i) the fees to which the respondent is entitled in respect of the services to which the complaint relates ("the fees") are limited to such amount as may be specified in the direction, and
(ii) the respondent comply, or secure compliance, with such one or more of the permitted requirements as appear to the ombudsman to be necessary in order for effect to be given to the direction under sub-paragraph (i);
(c) a direction that the respondent pay compensation to the complainant of such an amount as is specified in the direction in respect of any loss which has been suffered by, or any inconvenience or distress which has been caused to, the complainant as a result of any matter connected with the complaint;
(d) a direction that the respondent secure the rectification, at the expense of the respondent, of any such error, omission or other deficiency arising in connection with the matter in question as the direction may specify;
(e) a direction that the respondent take, at the expense of the respondent, such other action in the interests of the complainant as the direction may specify."
- There is a helpful guide to this area of the law in the judgment of Popplewell J in R (Crawford) v Legal Ombudsman  EWHC 182 (Admin):
"20. These provisions [of the Act] illustrate two important aspects of the scheme:
(1) It is intended to resolve complaints swiftly and informally. In order to achieve this, the Ombudsman will often have to do the best he can on limited material and without hearing detailed evidence. To assist in these objectives, he can rely on evidence which would not be admissible in court, and may draw adverse inferences from failure to provide information or documents.
(2) In resolving complaints by reference to the statutory criterion of what is fair and reasonable in the circumstances, the Ombudsman is afforded a considerable latitude of discretion. The test is what "in his opinion" is fair and reasonable. He is not bound by the Approved Regulator's code of conduct, although he must take account of it. He may apply his own standards of what he considers to have been good practice at the time.
21. In exercising powers of review, this court does not put itself in the position of the Ombudsman and test the reasonableness of the decision against the decision the Court would make. It does not review the merits of the decision as if it were exercising the statutory powers itself. To do so would be to subvert the intention of Parliament in vesting the Ombudsman with the function of administering the scheme. His decision may only be overturned as unreasonable if it is unreasonable in the Wednesbury sense (Associated Provincial Picture House Ltd v Wednesbury Corporation  1 KB 223). There are a number of different formulations of this well-known and oft-applied test. A common modern formulation is that the decision must be outside the range of reasonable responses open to the decision maker (see e.g. Boddington v British Transport Police  2 AC 143 at 175H per Lord Steyn). This is a high threshold, particularly in the context of a scheme intended to resolve complaints swiftly and informally in which the decision maker is afforded a wide discretion to do what he thinks is fair and reasonable in all the circumstances. One way in which a decision may pass the threshold is if it is irrational in the proper sense of the word, that is to say if its reasoning is not logically capable of supporting the conclusion (see e.g. R v Parliamentary Commissioner for Administration, ex parte Balchin  1 PLR 1, 13E-F per Sedley J and R (Norwich and Peterborough Building Society) v Financial Ombudsman Service Ltd  EWHC 2379 (Admin) at  per Ouseley J).
25. Decisions of the Legal Ombudsman are to be read with a degree of benevolence (see R (Siborurema) v Office for the Independent Adjudicator  EWCA Civ 1365,  ELR 209 at ) and should not be construed as if they were statutes or judgments, nor subjected to pedantic exegesis (see Osmani v Camden LBC  HLR 325 at [38(9)] per Auld LJ).
- The Scheme Rules
- Relevant Scheme Rules to which I was referred during the course of argument are as follows:
"What they can complain about
2.6 The complaint must relate to an act/omission by someone who was an authorised person at that time but:
a) an act/omission by an employee is usually treated also as an act/omission by their employer, whether or not the employer knew or approved;20 and
b) an act/omission by a partner is usually treated also as an act/omission by the partnership, unless the complainant knew (at the time of the act/omission) that the partner had no authority to act for the partnership.
2.8 The complaint must relate to services which the authorised person:
a) provided to the complainant; or
b) provided to another authorised person who procured them on behalf of the complainant; or
c) provided to (or as) a personal representative/trustee where the complainant is a beneficiary of the estate/trust.24; or
d) offered, or refused to provide, to the complainant.
Time limit from authorised person's final response
4.2 But a complainant can use the Legal Ombudsman if:33
a) the complaint has not been resolved to the complainant's satisfaction within eight weeks of being made to the authorised person; or
b) an ombudsman considers that there are exceptional reasons to consider the complaint sooner, or without it having been made first to the authorised person; or
c) where an ombudsman considers that in-house resolution is not possible due to irretrievable breakdown in the relationship between an authorised person and the person making the complaint.
Grounds for dismissing or discontinuing a complaint
5.7 An ombudsman may (but does not have to) dismiss or discontinue all or part of a complaint if, in his/her opinion:
f) a comparable independent complaints (or costs-assessment) scheme or a court is dealing with the same issue, unless those proceedings are first stayed (by the agreement of all parties or by a court order) so that the Legal Ombudsman can deal with the issue; or
g) it would be more suitable for the issue to be dealt with by a court, by arbitration or by another complaints (or costs- assessment) scheme;44 or
Determinations and awards by an ombudsman
5.36 An ombudsman will determine a complaint by reference to what is, in his/her opinion, fair and reasonable in all the circumstances of the case.
5.37 In determining what is fair and reasonable, the ombudsman will take into account (but is not bound by):
a) what decision a court might make;
b) the relevant Approved Regulator's rules of conduct at the time of the act/omission; and
c) what the ombudsman considers to have been good practice at the time of the act/omission."
- The Proper Approach to Review Decisions
- The proper approach to review decisions was set out by Lord Neuberger in Holmes-Moorhouse v Richmond upon Thames London Borough Council  1 WLR 413;  UKHL 7:
"50. Accordingly, a benevolent approach should be adopted to the interpretation of review decisions. The court should not take too technical a view of the language used, or search for inconsistencies, or adopt a nit-picking approach, when confronted with an appeal against a review decision. That is not to say that the court should approve incomprehensible or misguided reasoning, but it should be realistic and practical in its approach to the interpretation of review decisions.
51. Further, as the present case shows, a decision can often survive despite the existence of an error in the reasoning advanced to support it. For example, sometimes the error is irrelevant to the outcome; sometimes it is *429 too trivial (objectively, or in the eyes of the decision-maker) to affect the outcome; sometimes it is obvious from the rest of the reasoning, read as a whole, that the decision would have been the same notwithstanding the error; sometimes, there is more than one reason for the conclusion, and the error only undermines one of the reasons; sometimes, the decision is the only one which could rationally have been reached. In all such cases, the error should not (save, perhaps, in wholly exceptional circumstances) justify the decision being quashed."
- Natural Justice
- There is plenty of authority to support the proposition that an ombudsman might act in accordance with the rules of natural justice: see Duffield v Pensions Ombudsman  OPLR 149, 30 April; and Seiffert v Pensions Ombudsman  1 All ER 214. In a more recent case (R (Rosemarine) v Office for Legal Complaints  EWHC 601 (Admin) HHJ Stephen Davies emphasised the importance of the LO's speedy and informal process, but made plain that this was always subject to overriding considerations of fairness.
- Ms Stickler referred to R (Heather Moor and Edgecomb Ltd) v Financial Ombudsman Service  EWCA Civ 642, and the finding that an ombudsman could come to a view that was not in accordance with English law, but she accepted in answer to a question from the court that, in broad terms, the rules of natural justice applied to the LO's investigation. I agree with that: it seems to me that that was why Judge Davies was so anxious to stress in Rosemarine that the LO had considerable latitude, but that it was subject to the overriding principle of fairness.
3. THE RELEVANT FACTS
- Pursuant to the CFA, the claimant acted for the IP in pursuing the claim against the surveyor who had provided a report about the property which the IP subsequently purchased. The claimant acted for the IP for some 3½ years. In that time he had considereable dealings with the IP, her experts, and the surveyor's insurers. One of the complaints in the LO investigation concerned the claimant's discourteous and aggressive manner with all those parties.
- The correspondence demonstrates that, in the first part of 2014, the claimant and the IP fell out. The claimant said that the matter was "dragging on unnecessarily and without justification". On 10 June he confirmed that if he did not receive a response from the IP, he would consider that she had terminated the CFA. A week later on 17 June, the IP informed the claimant, for the first time, that negotiations were ongoing directly between her and the insurers acting for the surveyor and that there was nothing further for the claimant to do. She asked for a fee note.
- The claimant replied, telling the IP that her letter constituted a termination of the CFA. He said that his bill would be payable within 30 days, and not once negotiations with the insurers had concluded. On 26 June he sent the IP a bill for £15,120 including VAT.
- Unknown to the claimant, on 23 July 2014, the surveyor's insurers made a Part 36 offer of £100,000. Three weeks later, on 13 August, the IP accepted an offer of £129,000 (including costs) from the surveyor's insurers.
- By then, on 11 August, the IP had written a formal letter of complaint to the claimant about the services that he had provided. The letter ran to five pages. At the same time, the IP paid the sum of £15,120 which had been sought in the claimant's fee note.
- On 14 August, the claimant replied both in letter form and by way of email. The letter said:
"I am sure you will appreciate that I cannot accept and will not [accept] a cheque from you knowing that you are disputing my fees and demanding that I reduce my Fee Note. I am afraid that your disputes will need to be resolved before I can accept any payment."
- In the email of the same day, the claimant said:
"In the meantime I note that while you are disputing my fees you also enclose a cheque in the sum of £15,120. I am afraid that you cannot have it both ways – you cannot dispute my fees and pay them at the same time. You either pay the fees and withdraw your objection to my fees or you maintain your objections to my fees and refuse to pay."
- On 6 September, the claimant replied in detail to the IP's formal letter of complaint. It was a letter that ran to 23 pages. It was couched in aggressive language. Amongst other things, the claimant told the IP that her complaints were "utterly ridiculous and without merit"; that "your characterisation of my service [is] self-indulgent, self-serving, disingenuous and ungenerous"; and that her accusations "are a blatant attempt to justify a demand for reduction in my fees because you have settled your claim at a level that leaves you embarrassed financially".
- As the claimant well knew, the IP had suffered from a brain injury; indeed it is referred to in his letter of 6 September. Accordingly, she was to say in her LO claim form that she was particularly upset by the paragraph on page 7 of the claimant's letter of response:
"I have given consideration to the possibility that your letters of complaint are the product of a muddled mind created by your condition, but against that I have to weigh in the balance the time that your letters would have to write, the effort and care that you would have had to indulge in to find the emails you refer to and select out the parts that you wanted to rely on, and the time it would have taken you to put your complaints together in a coherent fashion. On that basis and with those factors in mind, my conclusion is that your selective and self-serving presentation and your misrepresentations and falsehoods are deliberately dishonest and knowingly false and are motivated by your present financial situation."
- As the letter indicated, this was the first time that the claimant had become aware that the IP had settled with the surveyor's insurers. In consequence, on page 22 of the letter, the claimant said:
"However, I should point out to you that since you confirmed in your letter dated 25 August 2015 that you have now reached a settlement with Travellers [the insurers] that you are happy with and accepted, that settlement counts as a "win" as defined under the Fee Agreement and therefore the Uplift of my fees becomes payable. The uplift is 50% of the Basic Charges, meaning that the Uplift is £6,300 plus VAT. I will therefore issue my Fee Note with the Uplift accounted for. Since this is an upwards increase in what is due, I will allow the 30 day grace period under the reissue Fee Note to run afresh, after which if my fees have not been settled in full, I will commence legal proceedings for recovery."
The claimant reissued his Fee Note in the total sum of £22,464, in accordance with the letter, and sent it on the same day.
- On 12 September 2014, the IP completed her Complaint Form to commence the LO investigation. Amongst the problems to which she referred were the following:
"Barrister unsatisfactory breakdown of HRS in fee note, charges for work before accepting instructions formally or a fee agreed. Barrister charging uplift under CFA when I do not consider due to him under the contract because he effectively removed himself from the case by his refusal to communicate further with Travellers Insurance (see above).
The manner of his response to my complaint which is abusive, emotive and bullying in tone, is not in accordance with the BSB Code of Conduct and does not inform me of my right to bring to the Legal Ombudsman. He also is threatening to take me to court after 30 days when I have not refused to pay, indeed he has already returned my cheque to me…
I have suffered extreme fatigue throughout this 3½ years of his involvement, which has been characterised by conflict, emotional responses and difficulty. As soon as he resigned himself from the case my health improved so significantly that I have been able to maintain some permitted work. In his final response letter his personal comments greatly upset me, especially his reference to my 'muddled brain' which I find an offensive and incorrect reference to my disability. I may get fatigued easily but I am not intellectually impaired in any way! I have felt bullied, especially in the last few months of his involvement…
He has sent me a 23 page response letter in which he mounts a personal attack on my motives for making a complaint based on his own assumptions, none of which are founded in any fact whatsoever. He makes reference to my disability which I find offensive. I find the manner of his response unprofessional and bullying…he has made a number of threats to take legal action to recover his costs when I have never refused to pay him and he in fact returned the cheque in full payment of his initial fee note because I was making a complaint. He ends his Response letter with another threat to start legal proceedings. He has made the assumption that the settlement I negotiated has left me 'financially embarrassed'…"
- Thereafter the LO investigation process commenced. This was marked by lengthy letters from the claimant to the LO, one of which ran to 18 pages. The claimant also took various points in respect of disclosure. On 14 November 2014 the claimant issued a claim for judicial review seeking an order preventing the LO from proceeding with the complaint on the basis of inadequate disclosure. The application for permission was refused by Gilbart J and deemed totally without merit.
- In late November/early December 2014, the claimant issued county court proceedings for non-payment of his fees in the sum of £22,464. The IP served a defence and counterclaim on 23 December 2014. The defence and counterclaim raised a number of the matters which she had raised in the investigation by the LO. Those County Court proceedings are now stayed pending the outcome of the LO investigation (and therefore presumably this application).
- By an unknown date in early 2015, the IP had incurred costs in mounting her defence and counterclaim in the county court proceedings in the sum of £2,199 including VAT. This becomes important because the LO was to make an order requiring the claimant to pay this amount to the IP.
- On 17 February 2015, the LO provided its RR. I shall refer to the detail of that document when I look at the particular issues between the parties. On 12 March, the LO issued his Determination. Again I will set out the relevant parts of that document when I look at the individual issues.
- On 7 April, the claimant commenced these proceedings. On 21 July, permission to apply for judicial review was refused. However on 4 November, at the oral hearing, Beverly Lang J granted the requisite permission. In so doing she referred to various matters which were of particular concern to her, including the contradictory and inconsistent stance taken by the LO; the possible failure to take into account what decision a court might make by reference to Rule 5.37; that the findings in relation to the fee claim were "difficult to square with the correspondence"; that it was questionable whether the LO could or should have adjudicated upon matters relating to the County Court claim; and issues of procedural fairness.
4. THE COMPLAINTS
- It is a feature of both the RR and the Determination that the IP's Complaints were set out in full. They were recorded in the same terms in each document:
"(1) Acted in a discourteous and aggressive manner towards her, the experts and the insurance company (the insurer).
(2) Refused in May 2014 to respond to requests for information from the insurer and incorrectly advised her that she had no further option other than litigation.
(3) Stated that she had terminated the Conditional Fee Agreement (CFA) when she did not consider that she had done so.
(4) Failed to reach a negotiated settlement with the insurer.
(5) Did not explain that he would charge her for work done prior to the signing of the CFA.
(6) Relied in his fee breakdown on estimates of time spent.
(7) Charged for 3 hours time spent emailing the insurer despite asserting in an email to them on 21 July 2011 that he did not charge for general email correspondence.
(8) Made an excessive charge for 14 hours' time for reviewing her case on 21 August 2013."
- It is important to note that, although neither the RR nor the Determination dealt clearly with the Complaints under these 8 headings, it is common ground that Complaints 2-8 inclusive were not upheld. There is a dispute about whether Complaint 1 was or was not upheld. At most, as set out in Section 5 below, the only part of Complaint 1 that could be said to have been upheld related solely to the claimant's letter of 6 September (paragraphs 20-22 above). In addition, there is a separate criticism of the claimant, which I address in Section 6 below, as to the circumstances surrounding his claim for fees. That is not identified in either the RR or the Determination as a complaint.
- Accordingly, the casual observer will note that, on any view, the claimant was substantially successful in the LO investigation. 7 out of the 8 complaints were rejected. In addition, that same casual observer might question the utility of the entire LO investigation, given that the IP has apparently raised many of the same issues in the investigation by way of defence and counterclaim in the county court proceedings.
5. COMPLAINT 1: ACTING IN A DISCOURTEOUS AND AGGRESSIVE MANNER
- The RR
- The writer of the RR was an investigating officer. The relevant parts of her RR were as follows:
"The evidence shows that both the experts and the insurers found counsel's manner and tone of correspondence to be rude and offensive, what the insurer has termed 'obnoxious and frankly bizarre behaviour'…I note that on a number of occasions [the IP] has found it necessary to intervene in order to placate those offended by counsel's behaviour. I consider that this would have exacerbated her stress and anxiety of bringing a claim and impacted on her already diminished health. I note that at the time she brought the complaint to the Legal Ombudsman, she was in the ESA Support Group which is for those claimants that DWP consider to have such severe health problems that there is no current prospect of their being able to undertake work or work-related activities.
There is also evidence of both unprofessional language used towards [the IP] (in counsel's email of 1 May 2012 concerning the behaviour of experts) and an aggressive verbal attack in his response to her complaint on 8 September 2014. I note that [the IP] has been particularly upset by counsel's reference to her 'muddled mind'; this is a particularly sensitive area for her in view of her recent brain injury. I am astonished by the contemptuous and dismissive tone of the letter and do not consider this an appropriate way to deal with complaints, whether or not the complaint handler considers they are justified."
There is then this by way of conclusion:
"In conclusion, I find that whilst counsel's legal service had been reasonable, his language and behaviour towards [the IP] and others involved in the case has certainly on occasions been unprofessional and aggressive and discourteous in tone."
It appears that the sum of £600 (plus VAT) was identified by the writer of the RR as being proper compensation for this conduct.
- The Determination
- The Determination was written by the LO, Mr Gary Garland. It is in different terms to the RR. It does however adopt the same basic fault of setting out the Complaints but then not dealing with each in a clear way, making the piecing together of what had been actually determined (and why) much more difficult than it should have been. That problem has been exacerbated by Mr Garland's attempts to have two further 'go's' at "clarification", first in the grounds of resistance to the judicial review, and then again in his witness statement.
- On Complaint 1, the charge of aggressive and discourteous behaviour, the relevant passages of the Determination appear to be these:
"Much of what is complained of is, in my opinion, very subjective and difficult to determine as poor service as it relates to professional judgment, though there are very serious questions about approach. Whilst it is clear that both the insurer and the surveyor were offended by Mr Stenhouse's approach that in itself does not amount to poor service: a robust approach is sometimes the best approach. However I struggle to see how some of Mr Stenhouse's language could be described as professional and is not something I would expect to see from a member of the Bar. Having said that I do agree with [the IP] in her surprise as the way Mr Stenhouse dealt with her complaint and the response she received, which in my view was uncalled for and totally inappropriate: I can see why she felt upset by it. I shall deal with this issue in due course (page 4)…
Looking over all that the service delivered on the actual case whilst there are criticisms that can be properly made about the language and the communication skills deployed by Mr Stenhouse, which I find are unprofessional and the report sets them out in more detail that I do here, those issues are ones for the Bar Standards Board and not this office…however, as to the case itself, as I have said Mr Stenhouse's approach was robust and not one all clients would appreciate. Much of [the IP]'s criticism is to do with professional judgment which varies from practitioner to practitioner. I cannot see anything of Mr Stenhouse's approach that is so off the mark that I could consider it unreasonable and therefore cannot properly conclude it was poor service. (Page 6)"
- At that point in the Determination, one reading might be that Complaint 1 had either been rejected or had been said to be a matter for the BSB, not the LO. However, the LO reverted to this issue on page 7 of the Determination:
"There was a subsequent reply to the complaints in a letter of 8 September 2014 which displayed a very intemperate approach and language bordering on offensive which clearly upset [the IP]."
And then, on page 8 there was this:
"In addition, having reviewed this matter overall, I am very disappointed in the way Mr Stenhouse dealt with his vulnerable client. He seems to have paid no heed to her position at all and his conduct towards the end of the matter, never mind his at times choice language obviously caused [the IP] great distress."
- Was There a Relevant Finding on Complaint 1?
- The mere fact that this point is in issue at all demonstrates the sloppy nature of the Determination itself. If the LO had conformed to the basic precepts of written decision-making – What is the issue? What is my determination of that issue? – it would at least be clear at a glance whether Complaint 1 (or any part of it) had been upheld. Instead we have all had to engage in a deconstruction exercise to try and work out what the Determination says and what it does not say.
- However, I am required to give the LO considerable latitude on this issue, and read his Determination with benevolence. On that basis, I conclude that he has made a finding under Complaint 1 against the claimant, in respect of his letter of 6 September (which the LO wrongly refers to as 8 September). It seems to me that the passage on page 6 of the Determination rejected Complaint 1, but only insofar it related to the claimant's treatment of the experts and the insurers. The passage in respect of the claimant's response to the complaints letter on page 4, an issue to which the LO says he will return 'in due course'; the absence of any reference to the letter on page 6, when the general charge is dismissed; the express reference to the response to the complaints letter on page 7; and the reference on page 8 to events "towards the end of the matter" all lead me to conclude that Complaint 1, limited only to the claimant's handling of the IP's formal complaint letter, by way of his own letter of 6 September 2014, was upheld in the Determination.
- Did the LO Have the Jurisdiction to Make That Finding?
- The claimant submits that, if that was the LO's finding, it was outside his jurisdiction. He argues that this was a finding about conduct rather than service, and therefore within the jurisdiction of the BSB, not the LO. I reject that submission for a number of reasons.
- First, I consider that the claimant is wrong to try and differentiate between services and conduct, and to say that only the former fell within the LO's jurisdiction. There is nothing in the Act or the Scheme to justify that distinction. The Act and the Scheme concern acts and omissions arising in respect of the services provided. That covers all acts and omissions, and would therefore ordinarily embrace both what was done by the barrister, and how it was done.
- Secondly, I consider that any jurisdictional differentiation between services and conduct – between what was done and the way in which it was done – would be impossible to police in practice. It would be absurd for an LO investigation to be hamstrung in this way. It would mean that the subject of the investigation could always present the complaints against them as an issue of conduct outside the LO's jurisdiction, and thereby defeat in every case the LO's investigation. In addition, the fact that some of the complaints might be the subject of a BSB enquiry does not mean that the LO has no jurisdiction to address them.
- Thirdly, in answer to one of the claimant's subsidiary submissions on this topic, I am in no doubt that the handling of complaints by a barrister or solicitor does arise out of the services provided. The Act and the Scheme expressly envisage that lawyers will have their own internal complaints-handling procedure if there are complaints about the services provided. A failure to implement a proper complaints-handling procedure therefore arises out of the provision of the relevant services.
- Fourthly, I consider that Rosemarine is directly in point. That was a case where the LO upheld complaints arising out of the barrister's complaints-handling procedure; indeed, how he dealt with the complaints made was central to the Determination against him. To that extent, therefore, this case is on all fours with that. There are also factual similarities here with the ill-advised nature of the response to the complaint in Rosemarine.
- For all those reasons I conclude that the LO had the jurisdiction to uphold that element of Complaint 1 which related to the claimant's response to the IP's formal letter of complaint of 11 August.
- Was It Agreed That This Matter Would Not Be Dealt With By The LO?
- The claimant's next submission was to the effect that he had an agreement with the LO that this issue (that is to say, that part of Complaint 1 which dealt with the claimant's letter of 6 September) was not part of the LO's investigation. This alleged agreement arose in the following way:
(a) In his letter of 21 October 2014, the claimant agreed with the investigating officer that she was right "to seek to limit your investigation only to those matters of complaint/allegations that are set out in the [IP's] letter of 11 August 2014."
(b) The investigator replied on 3 November attaching an annotated copy of the IP's letter of complaint of 11 August identifying which parts translated into the 8 complaints referred to above. There was of course no reference in the letter of 11 August to the claimant's response of 6 September for the very good reason that it did not exist at the time of the IP's original letter.
(c) In response, on 5 November, the claimant said:
"I note from your email that you appear to accept the point I have previously made about what you were entitled to investigate, namely that you are restricted solely to the complaints that are set out in the Letter of Compliant as sent to me and as they have actually stated in that letter."
- In my view, there is therefore force in the submission that, as at November 2014, the claimant was entitled to assume that matters not within the IP's letter of complaint of 11 August were not being pursued by the investigator. Again, I consider that this potential confusion comes back to the LO's persistent lack of clarity about the detail of what his investigation comprised.
- However, to the extent that there was any sort of agreement as at November 2014, it may be more difficult to say that, as part and parcel of an informal process, it was legally binding on the LO. Moreover, the complaint about the claimant's letter of 6 September was front and centre in the IP's Complaint Form (paragraph 23 above) and was an example of the generic Complaint 1, namely the discourteous and aggressive manner allegedly adopted by the claimant. In any event, the investigating officer made plain in the RR that the "aggressive verbal (sic) attack in his response to her complaint on 8 September" was a central part of her findings. Thus, if there was any doubt before – and I think there was – it was dispelled by the RR.
- The claimant alleges that he was prejudiced by this change of position because he only became aware that this matter was in play when he saw the RR, and he was not able to deal with it properly. He suggested that he was then under a strict time limit to reply and so was hampered by what he categorised as the late raising of a matter which he thought was not in issue.
- On the evidence before me, I simply cannot accept that submission. The reason for that lies in the claimant's response to the RR. In that response, which was extremely lengthy and attached a variety of documents, the claimant made plain, in unequivocal language, that he stood by everything that he said in the letter of 6 September 2014. He said:
"…I wish to make it quite clear that as far as I am concerned, my description of LP's allegations in her Complaint Letter, as set out above, is both factually accurate and justified, and I maintain and repeat what was said without hesitation and without regret. The adjectives used by me in my Response Letter are entirely accurate."
- In those circumstances, whatever the claimant's understanding as a result of his exchanges with the investigating officer in October and November 2014, the position in February/March 2015 was crystal clear. The claimant's letter of 6 September was an important element of the RR and one of the few findings against the claimant in the RR. The claimant knew that and had the opportunity to address it. He chose to stand by every word of the original response letter (including, I remind myself, an allegation of dishonesty). In those circumstances, there can be no question of any prejudice arising out of the earlier exchanges with the investigating officer about the scope of the investigation.
- The Failure to Follow Rule 5.37
- The claimant's next submission is that, in upholding this part of Complaint 1, the LO failed to have regard to Rule 5.37 (paragraph 9 above). The argument is that this complaint would never have been considered by the tribunal of the Bar Standards Board, because they only look at conduct that is "really serious", and so the LO should have reflected that in his Determination. Instead the LO made no mention of Rule 5.37 at all.
- I reject this submission for a number of reasons. The LO has to reflect what the relevant tribunal might have done, but he is not bound by it. The argument that the BSB may well not have dealt with this point because it was too trivial works against the claimant: it would be contrary to the Act and the Scheme if the LO could only investigate and make findings about "really serious" acts and omissions of barristers. The whole purpose of the LO Scheme is to allow a user to complain about matters which may not be "really serious" but which nevertheless are important to the complainant.
- It is not right to say that every determination of the LO is to solemnly recite Rule 5.37 and then make a finding in respect of it: see the decision of Judge Gore in Ralli Solicitors v Legal Ombudsman (unreported) CO/17464/2013. It is merely a matter for him to consider.
- In the present case, the LO upheld the complaint about the aggressive nature of the claimant's letter of 6 September. As noted in Section 5.8 below, this translated into an award of £600 plus VAT by way of compensation. Subject to questions of irrationality (dealt with in the next section), that decision was open to him under the Act and the Scheme, and the fact that the BSB might well not have been able to make any such finding – because the matter was not sufficiently serious – supported the LO's approach. If he had said that he could not deal with it because the BSB could not deal with it, the IP's complaint would never have been adjudicated at all.
- For those reasons, I reject the claimant's submission based on Rule 5.37.
- Was the Finding on Complaint 1 Irrational?
- Having dealt with the jurisdictional/procedural hurdles raised by the claimant, I then finally turn to the issue on the merits. Because this is a judicial review, the claimant needs to demonstrate that the decision to uphold Complaint 1 (limited to the claimant's letter of 6 September 2014) was irrational. In my view, he has failed to do so.
- It is quite clear that both the investigating officer, and the LO, were shocked and surprised at the tome and content of the claimant's letter of 6 September. In my view, that response was fully justified. The letter is indeed aggressive and discourteous. Some might regard it as dismissive and arrogant.
- The claimant contends that he was entitled to defend himself in a robust way and relies in the decision of Richards J (as he then was) in Law Society v Brammall  EWHC 1570. I agree that he was entitled to defend himself in a robust way, although Brammall is a decision which is contrary to the claimant's case on the facts, because it was differentiating between a response to a client and a response to a disciplinary body, and stressed that the former would need to be more "balanced and helpful" than the latter. The real point here is that, 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.
- The claimant also submits that his use of the expression "muddled mind" was not intended to be offensive, and he criticises the LO for failing to have regard to his explanation for using the phrase. The difficulty with that argument is that the claimant has to argue that the finding that it was offensive and distressing was not within the range of reasonable conclusions available to the LO. It obviously was. Indeed, in the context of the letter as a whole, it is very difficult to read it as anything other than offensive.
- On a related point, the claimant argues that he has not seen the medical evidence relating to the IP's brain injury, and the particular distress that the LO found this comment caused her. There is nothing in this point, which seems to hark back to the claimant's application for judicial review, which was itself based on the absence of these documents, and which was said by Gilbart J to be totally without merit. The claimant knew that the IP had a brain injury, and a section of his letter of 6 September dealt (in unsympathetic terms) with what he calls "her condition". In those circumstances, the LO was entitled to conclude that the reference to her "muddled mind" caused the IP particular distress.
- For all these reasons, I reject that submission that the LO's findings in respect of the letter of 6 September were irrational or outside the range of reasonable conclusions open to him.
- The LO had the power to award financial compensation to the IP as a result of the distress he found that the claimant's letter of 6 September had caused the IP. He identified the relevant sum as £600 plus VAT. In view of my other findings, the claimant cannot overturn this conclusion. Although there is a suggestion that VAT should not have been added, I consider that the decision to add it cannot now be challenged. It is a matter for the LO. However I can see the logic because the £600 plus VAT will be set off by the IP against the sums due to the claimant by way of fees, which also attract VAT.
- Accordingly, I do not quash that part of the Determination which finds the claimant liable to pay the IP £600 plus VAT.
6. THE FINDINGS IN RESPECT OF THE CLAIMANT'S CLAIM FOR FEES
- The RR
- As noted in paragraph 23 above, the IP's complaint form made a reference to the claimant's threat to issue proceedings in respect of his fees. But that was the extent of the reference. It was not a complaint articulated in the 8 complaints that I have set out at paragraph 29 above, as recorded in both the RR and the Determination. Neither is it something which subsequently featured in the text of the RR, save for this passage:
"I also consider that counsel acted totally inappropriately in issuing debt proceedings against [the IP] when he had refused her cheque for the full amount of his fees on 14 August 2014 and he was aware that there was an ongoing investigation of [the IP] complaint with the LO. This has led her to incur further costs at £2,199 to date in defending those proceedings and has caused her considerable additional stress and anxiety."
- The Determination
- This is a topic which is revisited in the Determination, but in very different terms. The relevant passages are as follows:
"However, where I do find that there has been a real and material failure in service is how Mr Stenhouse dealt with his fees." (Page 6).
"In my opinion when counsel rendered his bill for £15,120 and [the IP] sent a cheque to pay those costs that should have dealt with the matter. However, without any real explanation the cheque was sent back with a demand for £22,464 (now including CFA uplift)…if that was not bad enough, Mr Stenhouse without as far as I can see ever following the general practice of trying to sort this matter out or the protocols under the Civil Procedure Rules, resorted to unwarranted court action to recover his fees. I find it extremely difficult to see how this could be a reasonable course given that he has not given any explanation to [the IP] as to why he did not accept her cheque, or any proper notice or demand. I may even go as far as saying that resorting to court to pursue this debt is bordering on an abuse of the court process." (Page 7).
"Complain as he may about this office's jurisdiction to deal with this matter, I am satisfied that it was the intention of the legislature that matters just like this do fall within the gambit of the client's service as it would be a reasonable expectation of any client to be told why the cheque was returned and why the revised bill was sent some months later. It has the appearance of trying to penalise [the IP] for having the audacity to complain. Similarly, whilst of course the courts could determine the claim for the costs of defending the debt action that [the IP] has had to pay in defending herself, this office as an alternative to the courts has the authority to determine the issue as well. Therefore I see no problem in reaching the decision on the matter." (Pages 7-8).
"It therefore seems to me [the IP] was ready, willing and able to pay Mr Stenhouse's bill and tried to do so. It was none of her doing that he refused the cheque. That being so it seems to me that the costs she has had to run up defending the debt claim all came about by Mr Stenhouse's unreasonable behaviour and service towards her." (Page 8).
"I do not accept that the service is confined to the actual legal work done but covers all aspects of the relationship. Therefore it seems to me that Mr Stenhouse should meet all those costs triggered by his unreasonable behaviour which add up to £2,609 (including VAT) as of today)." (Page 8).
- What Were the LO's Findings in Respect of the Claim for Fees?
- It is important to take as a starting point a consideration of what particular findings the LO made in respect of the claimant's fee claim. In my view the LO made the following four sets of findings in connection with that topic:
(a) When the claimant sent his bill for £15,120 and the IP sent a cheque for the same amount, "that should have dealt with the matter".
(b) The cheque was sent back in circumstances where the claimant "was not given any explanation" alternatively "without any real explanation".
(c) There was no explanation alternatively "no real explanation" for why a revised bill was sent "some months later".
(d) The proceedings in the county court were "unwarranted"; they were started by the claimant "without…ever following the general practice of trying to sort this matter out or the protocols under the Civil Procedure Rules" and without "any proper notice of demand". As such, this was "bordering on an abuse of the court process".
- In my view, the findings at (d) above, which are the culmination of the previous three sets of findings, are expressed in intemperate language. Just as I was surprised by the claimant's letter of 6 September and the unprofessional language that he used, I am equally surprised at the vehemence of the language used by the LO, as summarised at paragraph 65(d) above. This is particularly unfortunate since I consider that the LO did not have the jurisdiction to make any of these four sets of findings; that he acted in breach of natural justice in making them; and that he also acted irrationally in making them. My reasons for these views are set out below.
- Did the LO Have The Jurisdiction to Make These Findings?
- In my view these findings were made without jurisdiction. Unlike the findings in respect of the claimant's response to the IP's complaint letter, they do not relate to any of the 8 complaints made by the IP, as articulated in the RR and repeated in the Determination. They were never part of the IP's complaint letter of 11 August, so they fell outside the matters which the Investigating Officer said she was looking at in the October/November exchanges (paragraph 44 above).
- Moreover, again unlike the findings in respect of the claimant's response to the IP's complaint letter, these four sets of findings cannot be traced back to the RR. There, the only point that was made was that it was inappropriate to issue proceedings when the cheque had been returned, which is a different point, and even then made only in passing.
- It is axiomatic that the LO can only investigate the complaints that have been made. That is the source of his jurisdiction. He does not have the jurisdiction to make findings in his Determination without prior notice, or to make findings which have never been the subject of complaint.
- In addition, I consider that there is an additional jurisdictional problem with the compensation order made in consequence of these findings, namely the order that the claimant pay the IP the equivalent of the costs which she has incurred in defending his county court claim. 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. Liability for costs in those proceedings will depend on the outcome of the action and the parties' conduct in those proceedings. It has nothing to whatsoever to do with the LO and the complaints that he was addressing.
- Here there is also a valid Rule 5.37 argument. The county court could not make the order which the LO made. The county court can only decide liability for costs at the end of the case. The IP may recover this element of her costs; but then again she may not. So the LO is making an order by reference to county court costs which the county court could not make; it is a final determination of costs partway through the proceedings. The LO should have explained how and why he justified such an unusual order, but he failed to do so. I apprehend that, had he attempted to do so, he would have realised that he could not make the order he was about to make.
- Were the Findings Made in Breach of Natural Justice?
- In my view, the findings that I have summarised at paragraph 65 above were made in breach of the rules of natural justice. This follows from my conclusions that they were not the subject of any of the IP's 8 complaints; they had been ruled out by the investigator in October/November 2014; they had not been included in the RR (or certainly not clearly enough to alert the claimant to them); and so were set out, for the first time, in the LO's unappealable Determination.
- I recognise the latitude I have to give the LO. But it goes too far to traduce a barrister for conduct "bordering on abuse of the process of the court" when that barrister had no idea that this was even being suggested until he read it in the Determination. In my view that was unfair by any standard.
- Were the Findings Irrational?
- In my view, the sets of findings that I have summarised at paragraph 65 above were irrational.
- As to paragraph 65(a), it was on any view wrong to say that the IP's payment of the cheque "should have dealt with the matter". How could it, when the IP had already issued a formal letter of complaint by the time she sent the cheque? The IP has pursued those complaints both in the LO process, and again in the county court proceedings by way of her defence and counterclaim. To say that she only did that because the claimant sent her cheque back is both irrational and groundless. All the evidence indicates that the IP would always have pursued her complaints, whatever happened to the cheque, so that would never have been the end of the matter.
- Thus the finding noted at paragraph 65(a) above, which had never even been suggested until the Determination, was irrational. No reasonable decision-maker could have reached such a perverse conclusion.
- This has a direct effect on the remedy, namely the compensation by reference to the IP's County Court costs. Assuming that I am wrong to find that the LO had no jurisdiction to make this order, I conclude that the LO acted irrationally in so doing. It is an order that flowed from the unjustified/irrational conclusion that the sending of the cheque "should have dealt with the matter". It was therefore itself irrational.
- As to the findings noted at paragraph 65(b), the LO seemed confused as to whether there was no explanation at all, or no real explanation (by which I take it he meant there was no satisfactory explanation). It is unclear whether he had regard to the explanation of 14 August (paragraphs 18-19 above) because he does not refer to them. It seems to me that the explanation was satisfactory; it was in some ways a curiously honourable way of dealing with the IP's stance. There is nothing to say that any further explanation by the claimant could or should have been provided.
- This it seems to me that the LO either failed to have regard to the explanation at all, or he did but he failed to understand it. Either way, his finding set out at paragraph 65(b) above was irrational and perverse.
- As to paragraph 65(c) above, precisely the same considerations apply. The LO either failed to have regard to the explanation as to why the uplift was now being applied, or failed to understand it. In truth, this was a perfectly simple point: the case had now settled, so the uplift was at least arguably due. Moreover, the uplift was claimed straightaway not, as the LO said, "some months later". Again therefore, either way, the LO's finding was irrational.
- As to the set of findings noted at paragraph 65(d) above, I have already said that the language was intemperate, particularly in circumstances where no hint of these findings had been made prior to the Determination. The findings were irrational because, once the claimant had been the subject of the complaint letter of 11 August, he was aware that his relationship with the IP had come to an end, and was entitled to claim his fees. After all, he had been working for the IP for nothing for 3½ years. How could it possibly be said to be "unwarranted" to then claim the fees that the claimant considered were due?
- Indeed, subject to being put to proof of the calculation, and subject to the counterclaim (which is only quantified in the sum of £5,926), the claimant is and always has been entitled to his fees. It cannot be "unwarranted" for the claimant at least to seek those fees in such circumstances. The idea, suggested in both the RR and the Determination, that the claimant was obliged to sit back and let the LO process reach a conclusion before even considering his remuneration is absurd. It wrongly suggests that the most important thing about this whole series of events was not the services provided by the claimant to the IP (which are not themselves criticised by the LO), or the outcome of the claim against the surveyors, or the claimant's remuneration, but was instead the LO's determination of the complaint about the tone of the claimant's response to the IP's complaint letter. That underlines a fundamental failure on the part of the LO to grasp the relevant priorities.
- It was also quite wrong for the LO to say that the claimant had not complied with the pre-action protocols. The claimant had made a claim and given the IP 30 days to pay. No payment was forthcoming; the original cheque was not re-presented. In those circumstances, nothing more was required. Ms Stickler suggested that the letter of 6 September did not say that it was a letter before action but that was, with respect, a pointless technicality, and hardly a reason to suggest non-compliance with the protocols. It is of course noteworthy that the LO did not deign to explain what this non-compliance consisted of. All the LO said was that the fee claim was made without notice, which completely ignored the notice in the letter of 6 September.
- In debating these points with me, Ms Stickler repeatedly fell back on the argument that the Act allows the LO to say what he thinks is fair and reasonable, so that no criticism can now be made of his findings. I do not agree that this helps on the facts of this case. Here, the LO's findings were irrational and perverse, and therefore should never have been made.
- I should add this. The LO said in his Determination that his office was "an alternative to the courts". In certain circumstances, that is correct, but only if his Determinations pass the relatively low threshold required by public law. If, as here, the Determination does not even get over that straightforward hurdle, then it is an empty boast.
- For these reasons, I uphold the Determination in so far as it relates to that aspect of Complaint 1 concerning the claimant's letter of 6 September 2014, and the award of £600 plus VAT. I quash the remainder of the Determination, including the decision to award the IP £2,609, as the equivalent of her costs in the county court proceedings.
- Having heard argument from both sides, I make no order as to costs. The two issues in these proceedings took an equal amount of time: one party was successful on one and one party was successful on the other. That is therefore the appropriate costs order.
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