What happens when a Solicitors Act assessment is brought to challenge £72,000 worth of invoices and retainer on the grounds that the client, who had dementia, lacked the capacity to instruct?
The SCCO decision in Furley Page LLP v KFL is a crucial read for all law firm partners and risk managers, providing a real-world masterclass in managing instructions from vulnerable clients.
The client’s representatives sought to void the entire retainer. However, the solicitor firm had been proactive at the outset, commissioning contemporaneous capacity assessments which found the client was able to provide instructions at that time.
Costs Judge Whalan delivered a nuanced judgment that established a “sliding scale” of capacity:
Initial Retainer was Valid
The judge found the solicitor’s proactive, contemporaneous capacity reports were persuasive. The retainer was valid at the start.
Capacity Lost Mid-Retainer
Based on the evidence, the judge determined a specific later date by which the client had lost the capacity to contract due to the sad progression of his dementia.
Constructive Knowledge is Key
The solicitor was found to have had actual or constructive knowledge of this loss of capacity from a specific date. This means that while the bulk of their fees were safe, any costs incurred after this date are now at risk of being irrecoverable.
This case is a powerful blueprint for risk management. It demonstrates that while the presumption of capacity is a starting point, it is not a shield. Proactive, documented assessments are the best defence, and firms must remain vigilant to changes in a client’s capacity throughout a retainer.
You can read the full judgment here.
Useful Information:
- More about William
- More about arch.law costs – our cost management solution
