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Law - duty of advocates
52. It follows that the willingness of professional
advocates to represent litigants should not be undermined
either by creating conflicts of interest or by exposing the
advocates to pressures which will tend to deter them from
representing certain clients or from doing so effectively.
In England the professional rule that a barrister must be
prepared to represent any client within his field of practice
and competence and the principles of professional independence
underwrite in a manner too often taken for granted this constitutional
safeguard. Unpopular and seemingly unmeritorious litigants
must be capable of being represented without the advocate
being penalised or harassed whether by the Executive, the
Judiciary or by anyone else. Similarly, situations must be
avoided where the advocate's conduct of a case is influenced
not by his duty to his client but by concerns about his own
self-interest.
53. Thus the advocate owes no duty to his client's opponent;
inevitably, the proper discharge by the advocate of his duty
to his own client will more often than not be disadvantageous
to the interests of his client's opponent. (Orchard v S E
Electricity Bd [1987] QB 565, 571) At times, the proper discharge
by the advocate of his duties to his client will be liable
to bring him into conflict with the court. This does not alter
the duty of the advocate. It may require more courage to represent
a client in the face of a hostile court but the advocate must
still be prepared to act fearlessly. It is part of the duty
of an advocate, where necessary, appropriately to protect
his client from the court as well as from the opposing party.
Similarly, the advocate acting in good faith is entitled to
protection from outside pressures for what he does as an advocate.
Thus, what the advocate says in the course of the legal proceedings
is privileged and he cannot be sued for defamation. For similar
reasons the others involved in the proceedings (eg the judge,
the witness) have a similar immunity.
54. The professional advocate is in a privileged position.
He is granted rights of audience. He enjoys certain immunities.
In return he owes certain duties to the court and is bound
by certain standards of professional conduct in accordance
with the code of conduct of his profession. This again reflects
the public interest in the proper administration of justice;
the public interest, covering the litigants themselves as
well, is now also expressed in Part I of the Civil Procedure
Rules. (See also Practice Direction 16 §9.) The advocate
must respect and uphold the authority of the court. He must
not be a knowing party to an abuse of process or a deceit
of the court. He must conduct himself with reasonable competence.
He must take reasonable and practicable steps to avoid unnecessary
expense or waste of the court's time. The codes of conduct
of the advocate's profession spell out the detailed provisions
to be derived from the general principles. These include the
provisions relevant to barristers which preclude them from
making allegations, whether orally or in writing, of fraud
or criminal guilt unless he has a proper basis for so doing.
Paragraph 606(c), which has already been quoted by my noble
and learned friend, requires express instructions and reasonably
credible material which as it stands establishes a prima facie
case of fraud. All this fits in well with an appropriate constitutional
structure for a judicial system for the administration of
justice.
55. The introduction of a wasted costs jurisdiction makes
an inroad into this structure. It creates a risk of a conflict
of interest for the advocate. It is intended and designed
to affect the conduct of the advocate and to do so by penalising
him economically. Ideally a conflict should not arise. The
advocate's duty to his own client is subject to his duty to
the court: the advocate's proper discharge of his duty to
his client should not cause him to be accused of being in
breach of his duty to the court. (Arthur Hall v Simons [2000]
3 WLR 543) But the situation in which the advocate finds himself
may not be so clear cut. Difficult tactical decisions may
have to be made, maybe in difficult circumstances. Opinions
can differ, particularly in the heated and stressed arena
of litigation. Once an opposing party is entitled to apply
for an order against the other party's legal representatives,
the situation becomes much more unpredictable and hazardous
for the advocate. Adversarial perceptions are introduced.
This is a feature of what happened in the present case. The
factors which may motivate a hostile application by an opponent
are liable to be very different from those which would properly
motivate a court.
56. In my judgment, the jurisdiction must be approached with
considerable caution and the relevant provisions of s.51 construed
and applied so as not to impinge upon the constitutional position
of the advocate and the contribution he is required to make
on behalf of his client in the administration of civil justice.
The judgment in Ridehalgh referred to most of the relevant
points.
First, from the point of view of the advocate the jurisdiction
is penal. It involves making a finding of fault against the
advocate and visiting upon him a financial sanction. Unlike
the position between the advocate and his own client where
the potential for liability will encourage the performance
of the advocate's duty to his client (see Arthur Hall v Simons,
sup) and the order would be truly compensatory, the jurisdiction
to make orders at the instance of and in favour of the opposing
party gives rise to wholly different considerations for the
advocate. The risk of such an application can, at best, only
provide a distraction in the proper representation of his
own client and, at worst, may cause him to put his own interests
above those of his client. The construction of the section
and the application of the jurisdiction should accordingly
be no wider than is clearly required by the statute.
Secondly, the fault must, in the present context, relate clearly
to a fault in relation to the advocate's duty to the court
not in relation to the opposing party, to whom he owes no
duty.
Thirdly, the terms used in subsection (7) should receive an
appropriately restrictive interpretation in relation to advocates.
The judgment in Ridehalgh spelled this out at p.232 of the
report. The use of the first two terms, improper and unreasonable,
call for no further explanation. The word negligent raises
additional problems of interpretation which are not material
to the present appeal since the respondents' allegation against
the appellants is impropriety not negligence. But it would
appear that the inclusion of the word negligent in substitution
for "reasonable competence", is directed primarily
to the jurisdiction as between a legal representative and
his own client. It is possible to visualise situations where
the negligence of an advocate might justify the making of
a wasted costs order which included both parties, such as
where an advocate fails to turn up on an adjourned hearing
so that a hearing date is lost. The breach of the advocate's
duty to the court will be clear and if the breach was not
deliberate, the term negligent would best describe it. For
a person exercising a right to conduct litigation (ie a litigation
agent) it is less difficult to think of apt examples affecting
the other side as was the situation in Myers v Elman [1940]
AC 282. The use of the same language in subsection (7) in
relation to both categories of legal representative does not
mean that it will have the same breadth of application for
both categories.
Fourthly, it is the duty of the advocate to present his client's
case even though he may think that it is hopeless and even
though he may have advised his client that it is. (Ridehalgh
pp.233-4) So it is not enough that the court considers that
the advocate has been arguing a hopeless case. The litigant
is entitled to be heard; to penalise the advocate for presenting
his client's case to the court would be contrary to the constitutional
principles to which I have referred. The position is different
if the court concludes that there has been improper time-wasting
by the advocate or the advocate has knowingly lent himself
to an abuse of process. However it is relevant to bear in
mind that, if a party is raising issues or is taking steps
which have no reasonable prospect of success or are scandalous
or an abuse of process, both the aggrieved party and the court
have powers to remedy the situation by invoking summary remedies
- striking out - summary judgment - peremptory orders etc.
The making of a wasted costs order should not be the primary
remedy; by definition it only arises once the damage has been
done. It is a last resort.
Practical Consequences:
57. The practical consequences of the wider use of the jurisdiction,
particularly where the client's opponent is the applicant,
were also commented upon in Ridehalgh. The first and most
striking is that it creates satellite litigation which too
easily gets out of proportion to the litigation which has
spawned it. The present case provides an educational but far
from extreme illustration. The principal trial was not wholly
straightforward, involving successive amendments of the pleadings,
questions of legal analysis and bitterly contradictory oral
evidence but the trial judge was able to deliver his judgment
at the end of the trial without having to reserve it. He held
in favour of the existence of a partnership and ordered an
account of profits. After various contested interlocutory
applications both to the judge and to the Court of Appeal,
the Court of Appeal, in March 2000, unanimously dismissed
Mr Mardell's appeal, dismissing also his application to amend
the notice of appeal and adduce fresh evidence. A month later
the main action was settled. The wasted costs application
has occupied the following two years with a further full hearing
in the Court of Appeal and an appeal to your Lordships' House.
If the policy of the wasted costs jurisdiction is to reduce
the costs of litigation and to save court time, it too often
fails to achieve this objective (as is confirmed by the Modern
Law Review article already referred to). The jurisdiction
is discretionary and should be reserved for those cases where
the unjustifiable conduct can be demonstrated without recourse
to disproportionate procedures. (See also Harley v McDonald
[2001] 2 AC 678.) The jurisdiction does not exist as an end
in itself; it is distinct from the professional disciplinary
structures. The procedures appropriate for wasted costs applications
were discussed in Ridehalgh at pp.238-9.
58. Once the power to initiate wasted costs procedures is
extended to the opposite party in the litigation, that party
is provided with a weapon which it is too much to expect he
will not on occasions attempt to use to his own advantage
in unacceptable ways. It must not be used as a threat to intimidate
the lawyers on the other side. (Ridehalgh at p.237, citing
Orchard v S E Electricity Bd [1987] QB 565) It should not
be motivated simply by resentment at an inability to obtain
an effective order for costs against an assisted or impecunious
litigant. (Ridehalgh at p.231, citing Symphony v Hodgson [1994]
QB 179) Nor should it be used as a means of continuing contentious
litigation by other means or to obtain from a party's lawyers
what cannot be obtained from the party himself. The legitimate
interest of an applicant for a wasted costs order is financial,
a reduction in the costs he has to bear, but the application
must be merits based and clearly made out; it must not raise
a suspicion of being itself abusive.
59. A further consequence of exercising the jurisdiction on
the application of an opposite party is that it raises questions
of the legal professional privilege of the lawyer's client.
The client very probably will have no interest in waiving
the privilege. Indeed the client may stand to gain if his
opponent can look to the client's lawyer for an indemnity
rather than to the client himself. This situation creates
a serious problem which may lead to the emasculation of the
wasted costs jurisdiction as between the opposing party and
the advocate. The appellants argue that in cases such as the
present it should do so: fairness requires that the privileged
material should be before the court; if it cannot be, the
application for wasted costs should fail. They submit that
this argument must be conclusive.
60. As already observed by my noble and learned friend Lord
Steyn, the nature and extent of legal professional privilege
has not been in question on this appeal nor has it been the
subject of any argument. Its absolute and paramount character
has been accepted by the respondents, citing R v Derby Magistrates'
Court, ex parte 'B' [1996] AC 487 and General Mediterranean
Holdings v Patel [2000] 1 WLR 272. However, the need of a
lawyer to be able to ask a court to look at privileged material
when a lawyer's conduct is in question may not be so intractable.
The material in question may be confidential rather than absolutely
privileged. (Parry-Jones v The Law Society [1969] 1 Ch 1)
It may be possible to restrict the use which can be made of
the disclosed material so as to reduce or remove the infringement
of the client's privilege. (See per Glidewell LJ in R v Commissioners
of Inland Revenue ex parte Taylor (No.2) 62 TC 578 at p.588.)
It may be that partially inquisitorial procedures can be adopted,
as in the inter partes taxation of costs. It should be remembered
that the subject matter of the wasted costs application is
an alleged breach of the lawyer's duty to the court and it
is not unique that a lawyer may have to refer to privileged
material in the context of explaining himself to the court
and defining his relationship to the court as, for example,
when a litigation agent is applying to come off the record
or a barrister is ceasing to represent an assisted defendant
during the course of a criminal trial. It may be that, as
in the context of Articles 6 and 8 of the European Convention
on Human Rights, the privilege may not always be absolute
and a balancing exercise may sometimes be necessary. (Campbell
v UK (13590/88) 15 EHRR 137 and Foxley v UK (33274/96) 31
EHRR 25) But on the present appeal it must be taken that the
material which the appellants say is relevant may not directly
or indirectly be made available to the court with the result
that it is open to the appellants to argue that the Court
of Appeal must have acted unfairly in making a wasted costs
order against them..
61. The point was specifically considered in Ridehalgh at
pp.236-7:
"The privilege is not theirs to waive. ...... So the
respondent lawyers may find themselves at a grave disadvantage
in defending their conduct of proceedings, unable to reveal
what advice and warnings they gave, what instructions they
received. In some cases this potential source of injustice
may be mitigated by reference to the taxing master, where
different rules apply, but only in a small minority of cases
can this procedure be appropriate. Judges who are invited
to make or contemplate making a wasted costs order must make
full allowance for the inability of respondent lawyers to
tell the whole story. Where there is room for doubt, the respondent
lawyers are entitled to the benefit of it. It is again only
when, with all allowances made, a lawyer's conduct of proceedings
is quite plainly unjustifiable that it can be appropriate
to make a wasted costs order." (emphasis supplied)
The answer given therefore was not to treat the existence
of privileged material as an absolute bar to any claim by
an opposite party for a wasted costs order but to require
the court to take into account the possibility of the existence
of such material and to give the lawyers the benefit of every
reasonably conceivable doubt that it might raise. So, all
that the lawyer has to do is to raise a doubt in the mind
of the court whether there might not be privileged material
which could affect its decision whether or not to make a wasted
costs order and, if so, in what terms and the court must give
the lawyer the benefit of that doubt in reaching its decision,
including the exercise of its statutory discretion. I see
nothing unfair about this approach. Further, if the use of
the jurisdiction on the application of an opposite party is
kept within the proper bounds, the frequency with which the
problem arises of taking into account the existence of possibly
relevant but unseen privileged material should be much reduced.
62. The contrary submission of the appellants on this appeal
treats the existence of privileged material as a kind of trump
card which will always preclude the making of a wasted costs
order on the application of an opposite party. They ask how
can a court evaluate whether privileged material which, ex
hypothesi, it has not seen would affect its decision without
first seeing that material. But this argument does not reflect
what was said in Ridehalgh. Once the lawyer is given the benefit
of any doubt, any element of unfairness is removed. It must
depend upon the circumstances of each particular case. For
example, a lawyer who has to ask for an extension of time
or an adjournment because, say, he has forgotten about a time-limit
or has accidentally left his papers at home, would not be
able to say that any privileged material could possibly excuse
his incompetent mistake. To make a wasted costs order against
him would not (absent some additional factor) be inappropriate
or unfair. In other situations privileged material may have
a possible relevance and therefore require assumptions favourable
to the lawyer to be made. Thus, in the present case it is
assumed that in all respects the appellant barristers were
acting on the express instructions of their lay clients although
a finding of fact to that effect could only be made after
the consideration of privileged material. The assumption removes
the unfairness which might otherwise, in this respect, exist.
63. Therefore, for myself, I would not qualify what was said
in Ridehalgh. But I agree that it may be salutary to remind
parties that each case must depend upon its own facts and
that the power to make an order is discretionary and material
which could affect the exercise of that discretion is also
relevant. I agree with my noble and learned friend Lord Bingham
of Cornhill that the court must be satisfied before it makes
the wasted costs order that there is nothing that the lawyer
could say, if unconstrained, to resist the order and that
it is in all the circumstances fair to make the order.
64. The facts leading up to the making by the Court of Appeal
of the wasted costs order against the barristers are fully
set out in the Court of Appeal judgments and have been summarised
in the Opinion of my noble and learned friend. The difference
between the majority and the minority in the Court of Appeal
was not in the test to be applied. All agreed that the barristers
should be given the benefit of any doubt: see Peter Gibson
LJ, [2001] Lloyd's Rep 146, at pp.153 and 157. The difference
lay in the outcome of applying the test. Thus Peter Gibson
LJ said at p.158 on behalf of himself and Schiemann LJ:
"Try though we might, we have not found it possible to
conceive of any circumstances in which the barristers in putting
their names to the particular allegations of impropriety in
the draft amended notice of appeal and supporting them in
their skeleton and at the hearing had relevant privileged
or confidential material which justified their conduct as
compliant with section 606 but had been withheld from the
court."
On the other hand, Wilson J said (at p.162):
"I remain in doubt whether on 3 and 4 February the barristers
were guilty of professional impropriety. It is doubt of which,
pursuant to the same passage in Ridehalgh v Horsefield, they
must have the benefit. It is better that in certain circumstances
the wasted costs jurisdiction should be emasculated by the
principle of legal professional privilege than vice versa."
65. With the one exception of the transcripts allegation,
I agree that the preferable view is that the wasted costs
order should not have been made. The complaint made on behalf
of Mr Medcalf was that an application had been made to the
Court of Appeal to allow the amendment of the notice of appeal
and for the admission of fresh evidence which included allegations
which could not properly be made. The application for a wasted
costs order was based upon the draft amended notice and the
accompanying skeleton argument. These documents were effectively
simultaneous although dated one day apart (3 and 4 February
2000) and they were signed by the barristers. It was a consequence
of these documents that additional time was taken up on the
first two days (14 and 15 February) at the hearing of the
appeal but there was not any additional waste of time caused
by counsel taking excessive time to argue Mr Mardell's case.
All the relevant points upon which the applications to amend
and admit fresh evidence were based were hopeless and were
roundly rejected by the Court of Appeal both at the time and
in their unanimous written judgment dismissing the appeal.
With the one exception already mentioned, I would put these
points into the category of arguing a hopeless case. How they
would ever persuade the Court of Appeal to allow the appeal
and reverse the judge's judgment escapes me. They related
to peripheral matters and, although the credibility of Mr
Medcalf was central to the judge's decision and the attempt
to upset it on appeal, they could not be thought sufficient,
nor were they all novel. Speaking for myself, I would put
these points into the category, not of impropriety, but of
counsel discharging their duty to present even a hopeless
case if instructed to do so, in which case no question of
making a wasted costs order against them should have arisen.
It must be remembered that the good faith of the barristers
and their consciousness of the rules of their profession are
not challenged nor is their statement that they acted upon
their clients' express instructions. If it is considered that
the barristers' inclusion of these points was improper, I
would not arrive at that conclusion without feeling doubts
which I would not wish to resolve without knowledge of the
surrounding circumstances and the privileged material covering
the relationship between the advocates and their client. I
do not believe that in these circumstances it would be fair
to exercise the discretion against the appellants.
66. This allegation was included in Ground 45 of the proposed
amendments to the notice of appeal. It was in the following
terms:
"The First and Fourth Defendants have fresh evidence
that since the trial there has been interference with the
official transcript of the trial. The First and Fourth Defendants
have caused a second set of transcripts to be prepared by
different transcribers. The first set of transcripts contain
alterations, deletions, interpolations, and false certifications
tending to the detriment of the First and Fourth Defendants'
already disclosed grounds of appeal and attempting to buttress
the learned Judge's Judgment, obscure perjured testimony and
prevent the discovery of additional substantive grounds of
appeal. The said interference casts such fundamental doubt
upon the integrity of the plaintiff and the process of the
court in this case that a new trial should be ordered ex debito
justitiae."
This is an allegation of serious fraud and conspiracy involving
not only Mr Medcalf but also the official court transcribers
and, presumably, the plaintiffs' solicitors. The accompanying
skeleton argument in 12 paragraphs identified the evidential
material relied on, going back to the previous summer.
67. There are three important features which are essential
to the proper evaluation of the allegation made in the proposed
Ground 45. The appellants' argument failed to have any regard
to them and the same could fairly be said of the dissenting
judgment of Wilson J.
68. The first and most important is that the allegation was
made as part of and was dependant upon a Ladd v Marshall (see
[1954] 1 WLR 1489) application to admit fresh evidence in
the Court of Appeal on appeal from a final judgment. The applicant
has to identify and place before the Court of Appeal in documentary
form the fresh evidence the subject of the application. The
fresh evidence to support the relevant ground of appeal has
thus to be fully disclosed. There is no room for the applicant
to say that if you grant my application to adduce the fresh
evidence then there is other evidence not adduced at the trial
and not included in my application upon which I will also
want to rely. The application is exhaustive of the opportunity
to adduce fresh evidence in the Court of Appeal. In any event,
the position was put beyond argument by an order of Clarke
LJ on 28th January directing that any evidence to be relied
on should be served by 4th February. The evidence placed before
the Court of Appeal on behalf of Mr Mardell was the only evidence
upon which Mr Mardell could rely in support of Ground 45 and
upon which the advocates could rely as justifying the allegation
in Ground 45 in compliance with Paragraph 606 of the Code
of Conduct.
69. There has been a discussion whether Paragraph 606 is satisfied
by an expectation of obtaining admissible evidence which has
not yet been obtained. I do not wish to enter upon this discussion
save to say that it is misconceived: the emphasis should be
upon whether the existing material discloses a prima facie
case, which is a concept well understood in many areas of
procedural law, not least in the criminal law. The question
which the advocate must ask is: is there a prima facie case
of the fraud which I am going to allege? It is important not
in any way to devalue the important principle encapsulated
in Paragraph 606. But, in any event the 'expectation' excuse
cannot, and could not on any hypothesis, assist the appellants
here. At the early stages of litigation, before the close
of pleadings, some of the relevant evidence supporting an
allegation may not yet have been put into a form which can
actually be used at the trial; discovery may yet have to take
place but a party may know what documents will have to be
produced on discovery. At the stage of trial, evidence which
has not been given and the advocate cannot adduce cannot be
relied upon to justify an allegation. After trial and judgment,
the situation is even more clear cut. Only evidence already
adduced in the action or for which leave to adduce is given
by the Court of Appeal under Ladd v Marshall can be relied
upon as justification. This was the position here in relation
to Ground 45. Ground 45 and the accompanying skeleton argument
made allegations which came within the scope of Paragraph
606 and clearly should have been (and the barristers say it
was) seen as engaging the professional responsibility of an
advocate to the court. Since the allegations related to matters
occurring after trial and judgment, the principle in Ladd
v Marshall was inevitably critical to the ability to sustain
the allegation. A specific application to admit fresh evidence
had to be made. The allegation had to be made on the evidence
which Mr Mardell as the appellant was asking the Court of
Appeal to admit. If that evidence did not disclose even a
prima facie case against Mr Medcalf, it follows that a breach
of Paragraph 606 and the advocates' duty to the court occurred.
http://www.parliament.the-stationery-office.co.uk/pa/ld200102/ldjudgmt/jd020627/medc-3.htm
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