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Civil Litigation Section

McKenzie friends: one step too far?

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Changes in funding and the abolition of legal aid are causing well-publicised problems in relation to representation – or the lack of it – in court. Coupled with the significant increase in litigants in person (LiPs), they are dramatically slowing down the courts system. Kerry Underwood explains why he is so concerned about the rise of non-traditional representation arrangements.

Lawyers aid settlement, so cases involving LiPs tend to proceed further through the courts system, using up what are now scarce resources.

Hearings involving LiPs take far longer than those in which the parties are represented. A survey by The Spectator suggested that hearings in the High Court in which both parties were LiPs took four times longer.

Ravenscroft: do we need lawyers?

Inevitably, the use of McKenzie friends has increased. In Ravenscroft v Canal & River Trust [2016] EWHC 2282 (Ch), Chief Master Marsh gave guidance. He stated that the starting point was to consider whether the applicant reasonably needed such assistance. If so, the scope of that assistance should be determined, which required consideration of: the applicant’s personal position; the context in which the application was made; the principles in the overriding objective; and the guidance in Practice Notes: McKenzie Friends: Civil and Family Courts [2010] 1 WLR 1881.

In Ravenscroft, the Master held that it was appropriate to appoint a McKenzie friend and for him to have rights of advocacy in a full High Court trial, but that this was ‘an exceptional course of action … only justified by exceptional circumstances’.

The Master said that the permission was not open-ended and could be withdrawn at any time if it was abused or if the McKenzie friend sought to delay conduct of the trial.

The claimant had difficulty in understanding written material, as well as the technical nature of the case, so it was reasonable for him to call on assistance. The McKenzie friend proposed to act free of charge and had already won a similar case when representing himself. However, the McKenzie friend also had a number of unmet costs orders against him, including ones in favour of the defendant here.

Ravenscroft is a worrying decision that comes very close to saying that anyone who needs representation can choose anyone they wish and does not need a lawyer. Yet this McKenzie friend has ignored costs orders against him and can represent people in court. Such conduct by a solicitor would result in automatic suspension and subsequent striking off.

The Master was influenced by the facts that: the McKenzie friend had helped draft the proceedings; the claim was ‘in a reasonable shape’; and his ‘impression of [the McKenzie friend] from the three hearings when he has appeared in front of me is that he is capable of acting in a measured and helpful way’.

What is the logic of this? That if I illegally prescribe medication, but it works, then having acted illegally but reasonably successfully, as a non-qualified doctor I should be allowed to conduct major surgery? If anyone may now appear as an advocate in a full High Court trial, as this case was and in which the Master accepted that it involved an issue of ‘real public importance’, then what is the point of being a barrister or a solicitor?

It seems as though anyone can now appear in court and ignore court orders with impunity. There will be hearingless Briggs courts.

Stage 3 hearings and disposal hearings

Meanwhile, in McShane v Lincoln (Birkenhead County Court, 28 June 2016) the district judge held that a stage 3 hearing in the portal process requires a qualified solicitor or barrister to appear and that no one else has rights of audience.

In my view, it is the right decision. Stage 3 hearings are in front of a judge and can finally determine a matter. However, the combination of these two cases produces a puzzling result. The High Court has given a McKenzie friend the right to appear as an advocate in a fully contested High Court trial on a matter of public importance, with a QC instructed on the other side. However, an unqualified employee of a firm of solicitors cannot appear on a stage 3 hearing or a disposal hearing.

Something somewhere is wrong.

Presumably, the solicitor’s representative could appear, in the capacity of a McKenzie friend – in which case, costs would not be recoverable from the other side, although a McKenzie friend may charge their own client.

Clear guidance from the Court of Appeal in relation to unqualified people appearing in court for a fee, and to the rights of audience of those working for, or involved with, law firms in an age of fixed costs, alternative business structures and paid McKenzie friends would be most welcome.

Third party funder’s fee

In Essar Oilfield Services Ltd v Norscot Rig Management Pvt Ltd [2016] EWHC 2361 (Comm), the Commercial Court, in refusing to set aside part of an arbitrator’s award, held that an arbitrator’s general power to award costs included the power to award the costs of third party funding.

In an International Chamber of Commerce (ICC) arbitration, the arbitrator ordered Essar to pay costs on an indemnity basis, including £1.94 million which Norscot had paid to a third party funder. The arbitrator held that Essar had deliberately put Norscot in a position where it could not fund the arbitration from its own resources, and therefore it was reasonable for Norscot to obtain third party funding.

That funding consisted of an advance of around £650,000 on the basis that, if successful, Norscot would repay either 300 per cent of that sum (i.e. £1.94 million), or 35 per cent of the damages.

Essar challenged the award on the basis of serious irregularity under section 68(2)(b) of the Arbitration Act 1996, but the High Court rejected that challenge and held that the third party costs were recoverable in principle under section 59(1)(c) of the act and the relevant ICC Arbitration Rules.

The High Court held that the third party costs fell within the definition of ‘other costs’ in section 59(1)(c).

Has the High Court just reintroduced recoverability of additional liabilities? If so, call it a third party funder’s fee and not a success fee, and, hey-ho, recoverability is back!

Next March Kerry will be trekking the Sahara to raise money for the Lord’s Taverners’ charity for disabled and disadvantaged children and for the EY Foundation which raises funds to help young people find alternative routes into work and education. Donations can be made on the My Donate website here.

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