Plaintiff not protected from costs order

LAW REPORT 27 February 1996

Turner v Plasplugs Ltd; Court of Appeal (Sir Thomas Bingham, Master of the Rolls, Lord Justice Peter Gibson and Lord Justice Schiemann); 26 January 1996

Once the steps covered by a plaintiff's legal aid certificate had been accomplished, the certificate was spent and the plaintiff was no longer a legally assisted person protected against an order for costs in respect of any further steps taken in the proceedings.

The Court of Appeal dismissed an appeal by the plaintiff from Judge Ford's decision in the Patents County Court that the plaintiff was not a legally assisted person entitled to protection against an order of costs under section 17 of the Legal Aid Act 1988.

Section 17 provides:

The liability of a legally assisted party under an order for costs made against him with respect to any proceedings shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances, including the financial resources of all the parties and their conduct in connection with the dispute.

The plaintiff, a registered proprietor of a United Kingdom patent, was granted legal aid to take proceedings against the defendant for breach of patent rights,

limited to obtaining further evi-

dence and thereafter counsel's opinion as to the merits and quantum, and to include settling of proceedings or defence (and counterclaim) if counsel so advise.

Counsel was unable to advise on the validity of the patent as he was not provided with details of any prior art but advised that, if the patent was valid, the plaintiff had a good arguable case. He settled a draft statement of case. Without further reference to the legal aid committee proceedings were then issued. The defendant denied infringement of the patent and challenged its validity, relying on prior art. The plaintiff subsequently discontinued the proceedings.

The defendant, who was not given notice of the issue of the legal aid certificate, sought to recover against the plaintiff the costs of preparing and settling a defence to the proceedings. The plaintiff applied for an order that his liability for costs should be limited as if section 17 applied.

Gilead Cooper (Mildred & Beaumont) for the plaintiff; Gregory Chambers (Eversheds, Nottingham) for the defendant.

Sir Thomas Bingham MR said that the appeal raised an issue of considerable practical importance on the legal effect of a legal aid certificate granted to the plaintiff and arose where a legal aid certificate was limited by reference to specific procedural steps or stages.

It was accepted that the issue of proceedings was a step which was outside the scope of the plaintiff's legal aid certificate. The plaintiff had been assessed as having a disposable income of nil and a disposable capital of nil and had not been required to make any contribution towards his legal aid expenditure. The question was whether section 17 protected the plaintiff against an order for payment of the defendant's costs.

The plaintiff did not have the benefit of a legal aid certificate to issue proceedings. The defendant incurred the relevant costs preparing and delivering a defence to proceedings which the plaintiff had no authority from the legal aid committee to issue.

His Lordship could not see how, in relation to those costs, the plaintiff was to be regarded as a legally assisted person. That was exactly what he was not. He had been such for the accomplishment of three clearly defined steps. Those steps had been accomplished. There was strictly no need to discharge the certificate. It was spent. Everything it authorised had been done.

The proposition that a legal aid certificate granted to cover certain procedural steps or stages protected the assisted party against an order for costs until the certificate was discharged was not sound. Littaur v Steggles Palmer [1986] 1 WLR 287 showed that the legal aid certificate did not have to be discharged if it was spent.

So, from the time of the issue of proceedings, the plaintiff held no relevant legal aid certificate. His solicitors were not thereafter entitled to be paid by the legal aid board until a new certificate had been issued. And the plaintiff was not entitled to the protection of section 17. Everything which the current certificate authorised to be done had been done. The appeal was dismissed.

Lord Justice Peter Gibson agreed. Lord Justice Schiemann concurred.

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