swarb.co.uk - law index
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Legal Aid - From: 1970 To: 1979
This page lists 6 cases, and was prepared on 02 April 2018.
Hanning v Maitland (No 2) [1970] 1 QB 580
1970
CA
Edmund Davies LJ
Legal Aid
Edmund Davies LJ rejected 'serious impoverishment' as a description of the test for severe financial hardship in the context of a Legal Aid: "the statute does not make impoverishment a prerequisite to the granting of relief to the unassisted litigant." The phrase should be given an expansive interpretation rather than a narrow one.
1 Citers
General Accident Car and Life Assurance Corporation Ltd v Foster [1972] 3 All ER 877
1972
CA
Lord Denning MR
Legal Aid
The court considered the use of the word 'proceedings' in the 1964 Act: "The first point is: what are the 'proceedings'? Are they the proceedings from beginning to end - from the very first time when legal aid was granted? I think not. The only 'proceedings' with which we are concerned is the interlocutory appeal to this court, which we heard on 19 January 1971 ..... " (Lord Denning MR)
Legal Aid Act 1964
1 Citers
Davies v Taylor (No 2) [1974] AC 225
2 Jan 1974
HL
Viscount Dilhorne
Damages, Legal Aid, Costs
The plaintiff argued that no costs had been incurred by the successful defendant, as he was insured, and the insurance company was bound to pay his costs. Held: "In this case the solicitors, no doubt first instructed by the insurance company, were the solicitors on the record as the solicitors for the respondent. They acted for him and, in the absence of proof of an agreement between him and them or between them and the insurance company that he would not pay their costs, they could look to him for payment for the work done and his liability would not be excluded by the fact that the insurance company had itself agreed to pay their costs. In my opinion the costs incurred were incurred by the respondent in the sense in which those words are used in the Legal Aid Act 1964."
Legal Aid Act 1964 1(1)
1 Cites
1 Citers
Wallersteiner v Moir (No 2) [1975] QB 373; [1975] 1 All ER 849; [1975] 2 WLR 389
1975
CA
Buckley LJ, Scarman LJ, Denning LJ
Litigation Practice, Legal Aid, Company
The court was asked whether Moir would be entitled to legal aid to bring a derivative action on behalf of a company against its majority shareholder. Held: A minority shareholder bringing a derivative action on behalf of a company could obtain the authority of the court to sue as if he were a trustee suing on behalf of a fund, with the same entitlement to be indemnified out of the assets against his costs and any costs he may be ordered to pay to the other party. The court said that the minority shareholder could make a Beddoe application in the same way as a trustee and so secure an assurance that he would not be personally liable for any costs. Since he was asserting the company's cause of action on the company's behalf, the Legal Aid provisions prevented the grant of legal aid.
Denning LJ said of someone bringing an action on behalf of the company that "the minority shareholder, being an agent acting on behalf of the company is entitled to be indemnified by the company against all costs and expenses reasonably incurred by him in the course of the agency. It is analogous to the indemnity to which a trustee is entitled from his cestui que trust who is sui juris."
As to the position of a solicitor in litigation, he said: 'It may be worthwhile to indicate briefly the nature of the public policy question. It can, I think, be summarised in two statements; first in litigation a professional lawyer's role is to advise his client with a clear eye and an unbiased judgment; secondly, a solicitor retained to conduct litigation is not merely the agent and adviser to his client, but also an officer of the court, with a duty to the court to ensure that his client's case which he must of course present and conduct with the utmost of care of his client's interests, is also presented and conducted with scrupulous fairness and integrity. A barrister has similar obligations. A legal adviser who acquires a personal financial interest in the outcome of the litigation may obviously find himself in a situation in which that interest conflicts with those obligations.'
. . And "It is a fundamental principle of our law that a company is a legal person, with its own corporate identity, separate and distinct from the directors or shareholders, and with its own property rights and interests to which alone it is entitled. If it is defrauded by a wrongdoer, the company itself is the one person to sue for the damage. Such is the rule in Foss v. Harbottle (1843) 2 Hare 461. The rule is easy enough to apply when the company is defrauded by outsiders. The company itself is the only person who can sue. Likewise, when it is defrauded by insiders of a minor kind, once again the company is the only person who can sue. But suppose it is defrauded by insiders who control its affairs - by directors who hold a majority of the shares - who then can sue for damages? Those directors are themselves the wrongdoers. If a board meeting is held, they will not authorise the proceedings to be taken by the company against themselves. If a general meeting is called, they will vote down any suggestion that the company should sue them themselves. Yet the company is the one person who is damnified. It is the one person who should sue. In one way or another some means must be found for the company to sue. Otherwise the law would fail in its purpose. Injustice would be done without redress."
Scarman LJ said: "The indemnity is a right distinct from the right of a successful litigant to his costs at the discretion of the trial judge; it is a right which springs from a combination of factors - the interest of the company and its shareholders, the relationship between the shareholder and the company, and the court's sanction (a better word would be 'permission') for the action to be brought at the company's expense. It is a full indemnity such as an agent has who incurs expense in the authorised business of his principal."
Buckley LJ said: "[T]here are circumstances in which a party can embark on litigation with a confident expectation that he will be indemnified in some measure against costs. A trustee who properly and reasonably prosecutes or defends an action relating to his trust property or the execution of the trusts is entitled to be indemnified out of the trust property. An agent is entitled to be indemnified by his principal against costs incurred in consequence of carrying out the principal's instructions . . The next friend of an infant plaintiff is prima facie entitled to be indemnified against costs out of the infant's estate . . It seems to me that in a minority shareholder's action, properly and reasonably brought and prosecuted, it would normally be right that the company should be ordered to pay the plaintiff's costs so far as he does not recover them from any other party. In all the instances mentioned the right of the party seeking indemnity to be indemnified must depend on whether he has acted reasonably in bringing or defending the action, as the case may be: see, for example, as regards a trustee, In re Beddoe, Downes v Cottam [1893] 1 Ch 557. It is true that this right of a trustee, as well as that of an agent, has been treated as founded in contract. It would, I think, be difficult to imply a contract of indemnity between a company and one of its members. Nevertheless, where a shareholder has in good faith and on reasonable grounds sued as plaintiff in a minority shareholder's action, the benefit of which, if successful, will accrue to the company and only indirectly to the plaintiff as a member of the company, and which it would have been reasonable for an independent board of directors to bring in the company's name, it would, I think, clearly be a proper exercise of judicial discretion to order the company to pay the plaintiff's costs. This would extend to the plaintiff's costs down to judgment, if it would have been reasonable for an independent board exercising the standard of care which a prudent business man would exercise in his own affairs to continue the action to judgment. If, however, an independent board exercising that standard of care would have discontinued the action at an earlier stage, it is probable that the plaintiff should only be awarded his costs against the company down to that stage . . There is a well established practice in Chancery for a trustee who has it in mind to bring or defend an action in respect of his trust estate to apply to the court for directions: see In re Beddoe, Downes v Cottam [1893] 1 Ch. 557. If and so far as he is authorised to proceed in the action, the trustee's right to be indemnified in respect of his costs out of the trust property is secure. If he proceeds without the authority of an order of the court, he does so at his own risk as to costs. It seems to me that a similar practice could well be adopted in a minority shareholder's action."
Buckley LJ also discussed the role of a legal adviser in litigation and the nature of a contingency fee, saying: "A contingency fee, that is, an arrangement under which the legal advisers of a litigant shall be remunerated only in the event of the litigant succeeding in recovering money or other property in the action, has hitherto always been regarded as illegal under English law on the ground that it involves maintenance of the action by the legal adviser. Moreover where, as is usual in such a case, the remuneration which the adviser is to receive is to be, or to be measured by, a proportion of the fund or of the value of the property recovered, the arrangement may fall within that particular class of maintenance called champerty . . It may, however, be worthwhile to indicate briefly the nature of the public policy question. It can, I think, be summarised in two statements. First, in litigation a professional lawyer's role is to advise his client with a clear eye and an unbiased judgment. Secondly, a solicitor retained to conduct litigation is not merely the agent and adviser to his client, but also an officer of the court with a duty to the court to ensure that his client's case, which he must, of course, present and conduct with the utmost care of his client's interests, is also presented and conducted with scrupulous fairness and integrity. A barrister owes similar obligations. A legal adviser who acquires a personal financial interest in the outcome of the litigation may obviously find himself in a situation in which that interest conflicts with those obligations."
1 Cites
1 Citers
Currie and Co v The Law Society [1977] QB 990; [1976] 3 All ER 832; [1976] 3 WLR 785
1976
May J
Legal Aid, Legal Professions, Costs
Set-off of costs or damages to which one party is entitled against costs or damages to which another party is entitled depends upon the application of equitable rules. May J said: "[T]he set-off takes precedence over the solicitor's particular lien, which will then be limited to the balance, if any, due to his client after the set off" and it is "a 'question for the court's discretion.'
1 Citers
Airey v Ireland; ECHR 9-Oct-1979 - 6289/73; Series A no 32; (1979) 2 EHRR 305; [1979] ECHR 3
