Thursday, 20 February 2014

Client's Incapacity and Solicitor's Retainer

Matthew Smith of Kings Chambers reports on the recent decision in Blankley-v-Central Manchester.

A recent High Court appeal has determined that a solicitor's retainer is not automatically determined by the loss of mental capacity of the client. In the judgment, Phillips J held that, whilst Yonge v Toynbee  [1910] 1 K.B. 215 is long accepted authority that a solicitor's authority automatically and immediately determines upon the loss of capacity of the client, that does not equate to a frustration of the entire retainer. In that regard, the judge disapproved the earlier conclusion of Chief Costs Judge Hurst in Findley v Barrington Jones [2009] EWHC 90130 (costs) that the retainer was frustrated.

In Blankley v Central Manchester and Manchester Children's University Hospitals NHS Trust [2014] EWHC 168 (QB) (05 February 2014), Phillips J noted that if frustration occurred, any appointed deputy would have to incept a new retainer. In certain circumstances, of course, that could result in the loss of ability to recover additional liabilities from the losing party where the client had previously been funded by way of a CFA..

The judge likened the situation to one where an employee is temporarily incapacitated or where a company is temporarily unable to provide instructions due to a temporary absence of directors able to provide instruction. So long as the hiatus is dealt with sufficiently swiftly, the contract survives. In Blankley, the claimant had lost capacity on 9 February 2007 and authority was restored through the appointment of a (then) receiver whose application for appointment was dated the 26th of Feburary 2007.

Clearly, in order to preserve a retainer in a similar situation swift action is necessary especially as there can be occasions where there can be some delay between loss of capacity and a retained solicitors discovery of that fact.

Matthew was instructed on behalf of the Defendant by David Abraham at Clyde & Co. 

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