Dixon, R (on the application of) v Legal Services Commission

J U D G M E N T

1. MR JUSTICE HOOPER: The claimant challenges, by way of judicial review, a decision of the funding review committee of the legal services commission, dated 1 February 2002. On that date the committee dismissed the claimant's appeal against the discharge of her legal aid certificate on 9 January 2002. At the conclusion of the hearing this morning, I told the parties that I was going to quash the decision and would give my reasons at 2.15pm; this I am now doing.

2. The claimant had obtained the certificate in February 1998 for the purpose of suing her former solicitors, Messrs Clement Jones, for alleged negligence in the manner in which they brought a claim against the claimant's former accountants, Messrs Dyers, for negligent advice. The claim against Dyers concerned events which had taken place in the last two months of 1990 and the first month or so of 1991. The hearing before the committee was apparently brief.

3. I have been provided with a copy of the transcribed notes of that meeting and they occupy one and a half pages (313 to 314). It is noteworthy that during the hearing the solicitor for the claimant accepted that the case predominantly depended upon the evidence of the claimant, at least insofar as the Dyer claim is concerned. I have considerable sympathy for the committee. They had nearly 200 pages of documents in front of them. There was, apparently, no index to those documents. The documents raised a large number of different issues. They told a highly complex story, which was not always consistent. Different solicitors and different counsel had been involved, and different views had been taken by them about the events of 1990.

4. Matters did not improve when the case came before me. I was provided with two volumes of documents, each nearly two inches thick. In a case where one is being asked to review the decision of a funding review committee, the only material to which the court will normally refer is the material that was before the committee, the notes of the committee, the decision letter and any witness statement which the committee chooses to rely upon. Almost all of volume one was duplicated in volume two. Volume two contained, under the heading of an exhibit to a statement, nearly 200 pages of documents which had been before the committee. There was no index to that until one was provided to me during the course of the hearing. As I will show later, what I regard as the central and important issue in this case was, I am afraid, lost in the claimant's skeleton argument.

5. I turn to a brief history of the matters which concerned the committee. In late 1990 the claimant and her then partner, Mr Mooney, formed the idea of purchasing a property and converting it into a convenience store to be called "Moggy's" which they would run. Both were approaching 60. Both were experienced employees. Neither had run a business before. The premises, an old estate agents' sales office, were small, some 650 square feet. There was no doubt that Mrs Dixon was convinced that the premises were in an almost ideal location for such a store (see paragraph 3 of the advice of Mr Holtum at page 407).

6. In November 1990 they retained the firm of accountants, Dyers, although the exact nature of the retainer remains a matter in dispute. One bank refused to provide the necessary financing. That bank described the project as "little better than pawnbroking". In November 1990 Mrs Dyer introduced the claimant and Mr Mooney to a financial broker, Mr Chrimes. Through him a mortgage was obtained from NHL. The application for the mortgage contained a substantial misstatement of the income of the applicants. Responsibility for that misstatement would have been an issue in any trial against Dyers. The claimant denies that either she or Mr Mooney was responsible for that misstatement. The mortgage, which was obtained from NHL, was secured on the claimant's home. After refusal by one bank, Lloyds Bank granted the necessary overdraft to enable the business to start.

7. At one point the claimant and Mr Mooney thought of setting up the shop as a Londis outlet and a Londis representative produced two profit forecasts for them. Londis decided the shop was not big enough for them to become involved. The very rough figures produced by Londis were shown to Mrs Dyer. These figures were not before the committee, albeit there is reference to them in the advices. Although there were, apparently, some alterations to the figures in January 1991, on the material available to the committee any such alterations would not seem to be of great significance. The projected turnover, according to the Londis figures, was some £350,000. The actual turnover in the first year was only £227,000. The figures which the Londis representative produced, subject to some alterations, were apparently used in the successful and unsuccessful attempts to obtain the necessary financing.

8. On 25 January 1991 contracts for the purchase of the premises were exchanged and completion took place a month later, as did the mortgage on the house in the sum of £175,000. The claimant injected a further £50,000 into the venture. Sadly, the venture turned out to be a failure. Notwithstanding the injection by the claimant of a further £27,000, by 1994 they had entered into an IVA in order to continue trading. In 1995 NHL repossessed the claimant's house. The claimant by now had lost everything which she had put into the venture and was left with nothing.

9. The claimant decided at some point that it was appropriate to bring proceedings against Dyer. She had earlier made a complaint about their conduct to the appropriate professional body. Although the alleged negligence of Dyer might also relate to matters after 1 January 1991, the principal complaint against them related to the period from November 1990 through to the exchange of contracts for the purchase of the premises. Insofar as that short period is concerned, one issue in the case would have related to the ambit of the retainer: did Dyers agree to assess the overall viability of the plan or did they only agree to provide "bookkeeping" advice? If the former, then there would be an issue as to whether the advice which was given was negligent. In examining that issue, a number of further issues would have arisen, such as:

"If, as appears to be the case heavy reliance was placed upon the Londis predictions, was it negligent for reliance to be placed upon them, if such reliance was placed?

"What are the duties of an accountant asked to advise on the viability of a plan such as this being put forward by persons inexperienced in running a retail outlet?

"Ought an accountant to have relied in these circumstances upon the Londis projections?

"To the extent to which the projected figures did not materialise, why?

"Why did the business fail?

"Would the claimant have, in any event, continued with the plan, even if she had received advice that the Londis projections were unsound (if they were)?"

That list does not include all the issues, but sets out, I hope, some of them.

10. A second issue, insofar as Dyers is concerned, related to the mortgage of the house. Complaint is made that Dyers did not explain to the claimant the possibly disastrous consequences of using her house as security for the loan to buy the premises in which the retail shop would be located. It is her case that she was assured that she would not lose the house if things went wrong. This aspect of the claim would raise such issues as:

"What advice, if any, was she given by Dyers in respect of the mortgage, and were they retained to advise on that matter?"

Insofar as this issue is concerned, there appears, on the documents available, to be no contemporaneous documentary support for the claimant's case. If she was given the advice which she says she was within the ambit of the retainer, then another issue would arise:

"Would the claimant, in any event, have continued with the project?"

There was material before the committee to show that Dyer rejected the claims made against them by Patricia Dixon.

11. In February 1995 a legal aid certificate was issued to a firm of solicitors called Hewetts to take proceedings on behalf of the claimant against Dyers. An opinion by counsel, Robina Omar, given on 2 June 1995, refers to a request to her to advise upon whether a previous firm of solicitors, Trethowans, had acted negligently. Whether that related to these proceedings or some other proceedings, I am not clear. Hewetts instructed Robina Omar, whose opinion, dated 2 June 1995, is in volume two from page 345. I do not propose to go into the details of that opinion. It is not necessary to do so for the purposes of the judgment I am now giving, although it is obviously an important document in this case. In her opinion, Robina Omar had drafted a number of questions which, in her view, ought to be submitted to an expert. That did not occur at that time.

12. In July 1995 the claimant instructed another firm of solicitors. The firm that took over the case after Hewetts did not, I am told, advance the matter. A further firm became involved, but the legal aid certificate was not transferred to them.

13. On 19 January 1996 the claimant instructed Clement Jones solicitors. As the chronology before the committee showed, this was nearly six years since the retention of Dyers. On 7 February legal aid was transferred to Clement Jones and on 26 February, sadly, Mr Mooney died. In a later opinion Miss Omar was to say that his death had a substantial impact upon the likely outcome of the case. In April 1996 Clement Jones applied for an extension of the costs limitation in order to obtain an expert accounting report. According to the chronology before the committee, which I am told was prepared by an employee of the defendant, Clement Jones valued the claim "erroneously" at £40,000. That erroneous value was translated into "£4,000" by the legal aid board, on a misreading of the £40,000. In July 1996 Clement Jones informed the claimant about this valuation of £4,000. On 16 August 1996, according to the chronology, Clement Jones wrote to the legal aid board advising that the estimated quantum of claim was actually £200,000. In the chronology it is stated:

"This error did not affect legal aid entitlement which continued at least as far as early 1997."

14. On 4 September 1996 an amendment was granted to permit the obtaining of an expert accountancy report. That amendment is not before this court and was not before the committee. When this matter is reconsidered by a committee, it would seem to me important to make it available, in the light of a number of criticisms which Mr Holtum makes about the background to the obtaining of that report.

15. On 6 November 1996 a firm of chartered accountants, Henry R Davis & Co, at the request of Clement Jones, answered the questions posed by Robina Omar in her 1995 advice to Hewetts. Question two asked:

"Would the accountants have advised the proposed Plaintiffs that the business could succeed in being profitable on the basis of the forecasts?"

It seems clear to me that Miss Omar intended that the accountant would see what I have called the Londis projections as amended, in order to answer that question. For reasons which appear to have nothing to do with Miss Omar (who at this stage does not appear to have been involved in the case), the expert was not sent those projections. He was certainly sent a number of documents because in his letter of 6 November (page 335) he refers to "having read and re-read the papers a number of times". The answer which he gave to this question is as follows:

"The accountant would be expected to advise that the business might or might not be a viable proposition but it would be necessary to advise what in this context is profitable and this in turn would depend on how much time and effort the proprietors were able to put into the project.

"Comment

"Counsel refers at the end of paragraph 5 of her opinion to the fact that 'on or about 28 November 1990 Sue Dyer prepared cash and profit projections for their first 12 months of trading'. Without these projections it is impossible to comment further and it is noted that the comments provided by Dixon and Mooney do not confirm or deny the existence of any such projections. Enquiry must be made as to these projections because a simple comparison of these against the actual figures achieved (which should have been done by the proprietors) would make clear if the business was achieving the desired results."

16. Although a number of the questions and answers do not, on the face of it, seem to be particularly relevant to the issues, I shall refer to the last answer given. In question eight the expert was asked whether he could make any further observations about the way that Dyers handled the then proposed plaintiff's affairs. The expert answered:

"From the evidence provided being Dyer's Partnership letters to Lloyds Bank of 20 August 1992 and two letters to the proposed Plaintiff's [sic] dated 21 September 1992 and 18 May 1993 it is clear that the accountants put much effort in providing a professional service to their clients in this instant case."

That answer, of course, does not, on the face of it, relate back to the crucial period between November 1990 and January 1991.

17. Miss Omar was then instructed by Clement Jones to give an opinion. It is clear that she formed an early view that the case being brought against Dyers now had little merit. The opinion is a short one but builds upon conclusions which she had reached in her earlier opinion. She had before her the report from Davis & Co, and she concluded that it was not helpful to the proposed plaintiff's case and did not provide any support for the commencement of the proceedings. She was concerned with what she described in paragraphs 5 to 9 as inconsistent instructions from the claimant. She wrote that the evidence indicated that the claimant had "already concluded on the viability of the venture" and merely wanted advice on the setting up of the business. In paragraph 11 she referred, as I have indicated earlier, to the death of Mr Mooney, and she wrote:

"I had the pleasure of meeting him in conference and in my opinion of the two he was more consistent and without his evidence the case will prove an uphill struggle."

18. In paragraph 12 she says that, having considered the matter at length and from all angles and with the help of an expert, she would not advise a privately paying client of moderate means to issue proceedings in this matter. She had sympathy, so she said, for the claimant, but she said that she could not recommend for the extension of legal aid to cover the issue of proceedings. She recommended that the legal aid certificate be discharged forthwith. It appears that Clement Jones neither queried what she was saying, nor sought to undermine the strong conclusions which she had reached.

19. Turning back to the chronology (page 324), one sees that the legal aid certificate was discharged on 26 February 1997 on the basis that it was:

" ... unreasonable ... that the assisted person should continue to receive legal aid."

In May an appeal against that discharge was heard (page 325). That was refused. By then the claimant had instructed another firm of solicitors. The fact that the legal aid was discharged and that, on appeal, that discharge was upheld was a very important plank in the reasoning of the committee, as revealed in the witness statement of the chairman (page 305). I shall return to that a little later.

20. Against that background, I read out the decision letter (volume one, page 238):

"Having considered the documentation provided and having heard the Appellant's solicitors [sic] oral representations the Funding Review Committee make the following determination:

"The Committee considered that having regard to Counsel's assessment of the prospects of success which on the 'lost chance' assessment basis is 27%, and having regard to the passage of time which has elapsed since 1990, and the fact that no statements or proofs of evidence have been taken for any of the relevant witnesses, the Committee believed there were very formidable obstacles to success and that a private paying client of modest means would not be advised to incur any additional expenditure.

"The appeal is therefore dismissed."

21. I turn now to the grounds upon which the claimant relied before this court. In ground (1) it is submitted that the committee misunderstood counsel's advice "as being that there was a 27 per cent chance of success against Clement Jones". Because I am going to quash this decision, I do not intend to deal with all the grounds in any detail. Insofar as this ground is concerned, I was quite satisfied that it had no merit at all. It is clear, both from the letter itself and from the witness statement of the chairman, David Rea, that there was no such misunderstanding. It was, in my submission, inconceivable that an experienced committee, against the background of all the documents which they had before them, including the notice to show cause, the letter which followed that, counsel's notes, and the final letter which was delivered to the committee, made such a fundamental misunderstanding of what was a very simple point.

22. Secondly, it is submitted that the committee concluded that the 27 per cent "lost chance" assessment, which I stress was only a provisional assessment in any event, was a formidable obstacle to success. Again, even if one could read the letter in such a way as to suggest that they were saying that, it is clear from David Rea's witness statement that the committee knew what the law was and knew that that figure could not possibly be a formidable obstacle to success. This point has no merit at all.

23. Criticism is then made, under the heading "Ground B", of a paragraph in Mr Rea's witness statement, which is at page 309. Both in his skeleton argument and before me, the paragraph, which starts with the words "First the case" and ends with the word "report", was minutely analysed. With all respect to Mr Holtum, part of that analysis, in my judgment, demonstrated an overly legalistic approach to the document.

24. Complaint is made by Mr Holtum of the rejection by the committee of the need for a further report. I do not propose to give any definitive views about that rejection. As I see the issues in this case, it may well be that the committee could decide, in favour of the claimant, that any report which dealt with the issue of the Londis projections and what actually happened whilst the business was running could be assumed in favour of the claimant. I can see good reasons why, at this stage, it may not be necessary to spend further money on an expert report. The Woolf report, prepared by an accountant later instructed, is very much in favour of the claimant's case against Dyer. However, I do not resolve that issue and that will be a matter which the committee will have to consider, should it be decided to persist with the suggestion that such a report is necessary at this stage.

25. At page 5, paragraph 14 of the skeleton argument the point which is central to this case is made. What caused the withdrawal of legal aid in February 1997, and what caused the appeal to be unsuccessful, was, first, the failure on the part of Clement Jones to obtain proper accountancy evidence and, in particular, deal with the Londis projections and the manner in which the business was run; and, secondly, instructing Robina Omar, in whom, it is said, the claimant had lost confidence. It is further submitted that even if Clement Jones were not negligent in instructing Robina Omar, the advice that she gave was negligent and Clement Jones relied upon that negligent advice when forwarding it to the legal aid board. I shall return to that later.

26. In ground (2) complaint is made about the reliance which the committee placed upon the "fact that no statements or proofs of evidence have been taken for any of the relevant witnesses", set against the background of the passage of time which has elapsed since 1990. I do not propose to give a definitive answer to that complaint. I do note, however, that the committee, through Mr Rea, make it clear that they accepted the 27 per cent assessment, and what the committee were concerned with was whether or not the prospects of success against Clement Jones were, as Mr Holtum advised, 50-50, or significantly less. Again, I make it clear that his views on the prospects of success were very provisional and, of course, were dependent upon the documents which he had at that time. What is made clear (page 307) is that, in the view of the committee, the conclusion of 50-50 was a gross overestimate and, to use the words at the end of Mr Rea's witness statement, "the claim against CJ was considered to be speculative". If the committee, as they say and I accept, were proceeding on the assumption that 27 per cent was the correct "lost chance" assessment, then it is difficult to see how the absence of statements relating to the period in late 1990 and early 1991 would have any significance. Any significance that that might have would be relevant to the assessment of the lost chance.

27. Mr Holtum argues that it would not be difficult for the claimant now to give a proof of evidence, given the documents which are available. Whether that is right or wrong, I give no view. The committee, no doubt, were also influenced by concerns which had been expressed about the consistency of the claimant (see, for example, pages 441,357,413 but contrast page 389).

28. I turn to ground (3) which, with all respect to Mr Holtum, was a point that should never have been taken. The decision letter refers to a "private paying client of modest means", whereas the appropriate word is "moderate". Nothing arises out of that.

29. In ground (4) complaint is made about the test that was being applied by the committee. I do not need to consider that ground, in view of my conclusions.

30. Ground (5) makes a complaint about the failure to give the representative of the claimant a chance to deal with the issue of the weakness of the case against Clement Jones. I form no concluded view about that, but I have considerable doubts whether that is a good point in the light of the correspondence and issues. It seems to me that it was incumbent upon the claimant's representative to present a coherent picture of the whole case and deal with this potential issue.

31. I now turn, therefore, to what I regard as the central issue in this case. If one looks at the note which Mr Holtum prepared in answer to the request by the defendant for the claimant to show cause why public funding should not be withdrawn, one finds, in paragraphs 13 and 14 the following (page 513):

"I thus respectfully suggest that the Legal Services Committee have misunderstood the issues relating to the discharge of legal aid in 1997. Mrs Dixon's case on causation against Clement Jones is that through their negligence in instructing the accountants a wholly inadequate expert accountant's report was produced and then sent to counsel who Clement Jones should not have been [sic] reinstructed. Counsel then (also wrongly) used this report as one of the reasons she gave for advising that legal aid should not be continued. Mrs Dixon's case is not that the same report and same advice would have been given to the LAB.

"Thus, if Clement Jones had acted competently, I think there is reasonable prospect of establishing that a competent accountant's report and competent advice by counsel would have been produced for the Legal Aid Board. It seems to me that faced with such information and applying the reasonableness test in the 1988 Act the Board would then have continued legal aid."

If the committee were minded to conclude that the 50-50 assessment was a gross overestimate and that the chances of success were no more than speculative, it was, in my judgment, incumbent upon the committee to deal with the points there being made. In my judgment, the committee had to consider whether Clement Jones was negligent in the manner suggested in the note and, if so, what would have been the consequences if they had not been negligent. What is missing from both the decision letter and from the witness statement of Mr Rea is an analysis of this issue.

32. Mr Otwal, who appears for the defendant, accepted that neither in the letter, nor in the witness statement, was this issue addressed. He submitted to me that they must have decided it against the claimant and, therefore, this claim should fail. Whilst not seeking to impose upon the committee an unnecessary burden for explaining the conclusions which they have reached, it seems to me that on such an important point it was necessary for an explanation to be given as to how they reached the conclusion which Mr Otwal says they must have reached.

33. In cases such as this, the court always asks itself whether, notwithstanding any error that may have been made, would the result would necessarily have been the same? I do not think it is proper for me to make an assessment of the claim made by Mr Holtum that, but for the negligence of Clement Jones, the legal aid certificate would not have been discharged. That, in my view, is something that ought properly to be done by the committee. I therefore quash this decision and return it for reconsideration by another committee. I invite that committee to meet with the representatives of the claimant, so that the committee need only have before it those documents which are necessary to the resolution of the issues, and to ensure that the committee understands what it is they will have to decide.

34. MR HOLTUM: My Lord, I would ask for an order for costs.

35. MR JUSTICE HOOPER: Show me where. You are legally aided, are you not? You are paid already by the legal services commission?

36. MR HOLTUM: The position on taxation will be very different. I am told by those instructing me, and it would, of course, be my position as well, that if only a public funding assessment is ordered, then scale rates will be applied, as opposed to being able to recover something more like private client rates. There are fixed hourly rates which will be imposed on a public funding assessment. On the basis that it is normal now in judicial review cases -- I do not know if it is in the White Book. In my understanding, my Lord, inter partes orders are normally made. Proceeding on that basis, my Lord -- costs at a proper commercial rate be paid. The effect will be, my Lord, that those instructing me, and possibly myself, but no doubt it is not a matter that I should really allude to, will end up paying, by being paid at an uncommercial rate as opposed to being paid at a normal rate.

37. MR JUSTICE HOOPER: If I were --

38. MR HOLTUM: I do not see why the legal services commission should be in a better position than any other public body, my Lord.

39. MR JUSTICE HOOPER: If I were to order that -- if I were and I have not heard from Mr Otwal -- I would make a number of very strong comments about the manner in which this case has been presented, and suggest that serious consideration be given to reducing the amount of money being claimed, for the reasons which I have set out in my judgment. It might be better, in those circumstances, if you were content to have the normal order, whereupon I will not be making any comments, but it is a matter for you.

40. MR HOLTUM: My Lord, if I may say, your Lordship obviously made observations. You did not feel that there was much in a number of points. My Lord, I have to say that in front of Crane J when he gave permission, he took a very different view to your Lordship, and he accepted all the arguments as being properly arguable. My learned friend turned up on that occasion and we had about an hour in front of Crane J, my Lord.

41. MR JUSTICE HOOPER: What evidence did Crane J have in front of him? Did he have two volumes?

42. MR HOLTUM: No, my Lord. He had, effectively, volume one. Volume one consists of the material we put forward on the permission application, which was, as far as we knew, all the material that was in front of the committee. He did not have Mr Rea's witness statement, but for example, my Lord --

43. MR JUSTICE HOOPER: I cannot imagine that Crane J was able to spend the many hours that I have had to spend on these documents. We did not even get through to the point upon which I have quashed this decision until yesterday afternoon, by my recollection, and I am not even certain to this moment that it is actually in your skeleton argument, although you developed it during the course of argument and during the course of interventions which I invited you to make while Mr Otwal was on his feet.

44. MR HOLTUM: Well, with respect, my Lord, I do not think that is fair --

45. MR JUSTICE HOOPER: You may not think it is fair --

46. MR HOLTUM: My Lord, I plainly said from paragraph 11 onwards, what I described as "Ground 1B", that they said that they did not agree with it being 50-50 and that the chance should be taken as being significantly lower, and I said the reasons he gave for that were irrational and unreasonable.

47. MR JUSTICE HOOPER: "He gave no reasons" is the answer. They gave no reasons at all, apart from the evidentiary point; that is my point. Your central case is not addressed at all and, if we had started this case yesterday morning with me understanding that the real issue in this case is that they took it down from 50-50 to speculative without analysing why, in their view, the certificate would not have been discharged if Clement Jones had not acted negligently, and, of course, on the assumption that they did act negligently -- that is the crux of the case and we did not get it until yesterday afternoon. This was set down for four hours.

48. MR HOLTUM: With respect, my Lord, I plainly did put that --

49. MR JUSTICE HOOPER: You did not. You started off with ground (1), which was --

50. MR HOLTUM: My Lord --

51. MR JUSTICE HOOPER: The art of advocacy is to choose your best point, to go in front with it and convince me of it. I then turn to the opponent and say "Is there any answer to this?". He would have sought to give an answer, I am sure, and the whole case would have been over and done with very quickly.

52. MR HOLTUM: My Lord, I am sorry your Lordship feels that way, but we argued this, I put in the ground (1). My recollection is that we did not take very long --

53. MR JUSTICE HOOPER: Why take --

54. MR HOLTUM: -- because your Lordship made it very clear that --

55. MR JUSTICE HOOPER: Why not take the strongest point? You have a perfect point: they did not even address their minds, either in the decision letter or in the witness statement, to the central issue that you were advancing to them. Now, we usually start with that.

56. MR HOLTUM: I thought it was more logical to start with the position as it appeared to me from the decision letter and then to say that, even if the decision letter did --

57. MR JUSTICE HOOPER: No, you start with the strongest point first, not linguistic points like that.

58. MR HOLTUM: I am sorry. I thought it made sense the way that I did it. My Lord, with respect, I really do not think it right to say that we took a long time over the initial point --

59. MR JUSTICE HOOPER: Well, I take that view, but it is not for me, it is for the taxing office, to decide.

60. MR HOLTUM: My Lord, I would invite your Lordship, with respect, not to make any observations, but simply to order -- any other public body would be in that position, my Lord, and I do not see why the legal services commission should --

61. MR JUSTICE HOOPER: What do you say about an order for costs, on the issue that the taxation is better on an order for costs?

62. MR OTWAL: Yes.

63. MR JUSTICE HOOPER: You accept that proposition. What do you have to say about the substance?

64. MR OTWAL: I adopt what your Lordship has indicated. It was not until, in essence, late on in the day that we found out what the true complaint against the committee was.

65. MR JUSTICE HOOPER: Yes.

66. MR OTWAL: That is obvious.

67. MR JUSTICE HOOPER: What would be the appropriate percentage, if I were minded to reduce it? It is now half past three on the second day. We lost some time yesterday afternoon.

68. MR OTWAL: My Lord, I would say about 75 per cent.

69. MR JUSTICE HOOPER: Only 75 per cent should be awarded?

70. MR OTWAL: It should be reduced by 75 per cent.

71. MR JUSTICE HOOPER: It should be reduced by 75 per cent. What do you have to say?

72. MR HOLTUM: My Lord, I simply resist that. One has to look at this in the way that it developed, my Lord. The decision letter gave two apparent reasons. It was only from Mr Rea's witness statement that the disagreement with the 50 per cent actually emerged. My Lord, I say I stuck to what I thought was the logic of what I was saying by taking the pure points of construction on the decision letter first, but I did, with all respect, deal fair and square with my ground (1), which we ended up renaming as ground (2), saying they had no good grounds for departing from the 50-50 assessment --

73. MR JUSTICE HOOPER: Where are the words: "They never addressed their mind to it" -- not that their decision was irrational and their reasoning was bad -- where are the words: "They never actually addressed that central issue as to whether or not --

74. MR HOLTUM: I do not think --

75. MR JUSTICE HOOPER: Just listen to me. Where do you say these words: "On the assumption that they were satisfied that Clement Jones was negligent, where do they deal with the issue as to how that might have affected the discharge of the legal aid certificate?"? Where in your skeleton argument do you say, "They give no reasons at all for their conclusion that, even if Clement Jones were negligent, and even if they had obtained a proper report and a proper advice, nonetheless legal aid would have been discharged". Where do you say that in your skeleton argument?

76. MR HOLTUM: My Lord, I am addressing it, I believe, in ground 1B where -- I could only look -- Mr Rea did give some reasons as to why he thought the prospects of success were not right. That is what he was dealing with on pages 309 and 310, in some detail, where he opposed the quashing of the order. For me to say "he gave no reasons" is the converse of saying "the reasons he gives are irrational and unreasonable". I dealt with what he was saying in the witness statement at paragraph 11 onwards. In my submission, my Lord, it is most unfair to say that I did not address those. I did address them. I addressed what he said. He did not say that he had no reasons; he said that he had these reasons and I addressed those.

77. MR JUSTICE HOOPER: Thank you very much. Anything more you want to say?

78. MR HOLTUM: No, my Lord. Certainly to reduce the costs to 25 per cent would be absolutely draconian and, in my submission, completely unfair. My Lord, we have been successful in this claim, against strong opposition from my learned friend and those instructing him.

79. MR JUSTICE HOOPER: Thank you very much. On the 13 August 2002 Crane J gave permission to argue a number of points. Sometime after September 2002 the defence were served with the witness statement of David Rea, which included within it matters to which I have already referred in my judgment. Notwithstanding that witness statement, the claimant continued to argue a number of points which, for reasons I have set out in my judgment, were without merit.

80. The central point in this case was only raised during the course of argument in the latter part of yesterday. I take the view that that principal point should have been taken early in the case. The case should have concentrated on it. It should not have been hidden. In those circumstances, I make an order of costs against the defendant. Those costs will be at the full 100 per cent until one month has elapsed after the service of that witness statement. Thereafter, the costs are reduced to 80 per cent.

81. MR HOLTUM: My Lord, I am obliged. I do also need a public funding assessment.

82. MR JUSTICE HOOPER: Of course you can have that.