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Separate Representation, Conflicts and Costs: A Practical View from the Bar

Reproduced from Practical Law with the permission of the publishers. For further information visit www.practicallaw.com or call 020 7542 6664.

In his monthly column, James Bickford Smith discusses the decision in Ong and others v Ping [2015] EWHC 3258 (Ch) and the apparent revival of the “rule” in Lewis v Daily Telegraph Ltd (No 2) [1964] 2 QB 601.

A principle drummed into lawyers by professional bodies, ethics courses and related materials is that of not acting where there is a conflict between clients. Indeed, the guidance issued by professional bodies often seeks to extend that principle beyond that of outright conflict as normally understood. For example, in addition to the rule that “your duty to act in the best interests of each client includes a duty to consider whether the client’s best interests are served by different legal representation, and if so, to advise the client to that effect”, one finds guidance that “you may only accept instructions to act for more than one client if you are able to act in the best interests of each client as if that client were your only client”.

A natural conclusion that many lawyers draw from such guidance, and from incidents in which other lawyers have been criticised for acting when “conflicted”, is that, in the case of doubt, clients should be positively advised to seek separate representation. Indeed, one finds plenty of lawyers who consider that it is generally better for everyone with different interests to be separately represented, whether or not those interests actually conflict.

This state of affairs needs to be considered against the practical reality that clients can be distinctly unimpressed by the suggestion that they engage, at substantial expense, their own additional set of lawyers. Further, in an environment where costs are high and ability to pay them is very far from universal, advice to seek separate representation can be perceived as condemnation to no representation at all. This is not an issue whose ethical ramifications have been properly grappled with by legal regulators.

A related blind spot in conflicts guidance is highlighted, in fairly stark fashion, by Morgan J’s decision in Ong and others v Ping [2015] EWHC 3258 (Ch) (see Legal update, Trust litigation costs partly denied where beneficiaries had separate representation (www.practicallaw.com/0-620-5284)). This addressed ancillary issues left over from the main trial, chief among which was whether the fact that two firms of solicitors had represented the claimants meant that:

The action had been irregularly conducted and, as such, had been an abuse of process.
Only one set of solicitors’ fees were recoverable.

The first submission marked an ingenious attempt to apply the rarely referred to decision in Lewis v Daily Telegraph Ltd (No 2) [1964] 2 QB 601. This is not a decision I have ever fully understood but, taken on its terms (and to save readers the not inconsiderable trouble of deciphering it), it does indeed suggest that it is an abuse of process for co-claimants to be represented separately. This much emerges from the judgment of Russell LJ:

“Prima facie co-Plaintiffs. whether in one original action or in an action consisting of consolidated actions, must be jointly represented by solicitor and counsel.”

(Lewis v Daily Telegraph Ltd (No 2) [1964] 2 QB 601, at paragraph 623.)

This statement of principle seems far too sweeping and to neglect the issue of conflict altogether. That issue was, however, dealt with by Pearson LJ, who held there to be no conflict between the claimants in the two actions. His judgment is not straightforward, but the principles that Morgan J extracted from it were that:

“(1) it was not regular and not proper practice that two firms of solicitors should be placed on the record as representing Mr Lewis and the company separately;

(2) it might have been argued in that case that the defendants had acquiesced in the position and waived any rights they might have had to object;

(3) the court itself had an interest in having actions properly constituted and the situation in that case was irregular;

(4) he was not saying that it was impossible ever in any case to have separate representation, wholly or partially, in a consolidated action;

(5) the case of Healey v A Waddington & Sons Ltd [1954] 1 WLR 688, [1954] 1 All ER 861n showed the possibility of partial separate representation in consolidated actions;

(6) in the case before the court, separate representation would be extremely inconvenient and awkward and many difficult problems would arise; the possible problems referred to related to opening speeches, cross-examination, the asking of leading questions and final speeches;

(7) the action was not properly constituted where the plaintiffs were represented by separate solicitors;

(8) he did not encourage an application to be made for complete or partial separate representation as he did not see how it could work in that case.”

(Ong and others v Ping [2015] EWHC 3258 (Ch), at paragraph 40.)

The difficulty with this reasoning lies in seeing the rational justification for principles (1), (3) or (7). It is one thing to say that separate representation is an issue of case management and/or relevant to costs. It is quite another to say that separate representation meant that the action “was not properly constituted”. The Victorian case of Wedderburn v Wedderburn (1853) 51 ER 993 used to found the reasoning provides fairly questionable support for it given current regulatory rules. One wonders what a Solicitors’ Disciplinary Tribunal would say if a lawyer told clients what Sir John Romilly MR so emphatically told the two claimants who sought to break off from the main group in that case:

“When persons undertake the prosecution of a suit, they must make up their minds whether they will become co-plaintiffs: for if they do, they must act together. I cannot allow one of several plaintiffs to act separately from and inconsistently with the others (emphasis added).”

(Wedderburn v Wedderburn (1853) 51 ER 993, at 160.)

It is unsurprising that given the changes in practices that have supervened since 1853 (when Wedderburn was decided) and 1964 (when Lewis was decided) these arguments have very rarely been advanced subsequently. Indeed, I am aware of only one application of Lewis outside the contexts of defamation or contentious trust work (where there are fairly well-settled rules concerning separate representation of trustees). The general view has, therefore, been that the case only applies in particular contexts, and in those it is merely duplicatory of other rules or practices.

Nevertheless, the fact remains that Lewis is Court of Appeal authority that has never been overruled. Accordingly, and with no authorities cited to him against it, Morgan J applied it as follows:

“There is a strong argument that the Claimants’ conduct in the Main Action, in having separate representation by solicitors, was irregular. Although Jane and the children were not joint claimants in that they were not pursuing a cause of action vested in them jointly, they were co-claimants and the approach in Lewis appears to apply to such claimants. The question of the regularity of what they did does not seem to me to be affected by considering whether they could have brought separate proceedings which, without formal consolidation, could have been the subject of an order that the two proceedings could have been heard together. That did not happen as Jane and the children were co-claimants in the Main Action. Nor is the question as to regularity affected by the fact that as well as the Main Action, there was a direction for the trial of the Trust Issue where it is less easy to describe Jane and the children as co-claimants.

However, on the assumption that the conduct of Jane and the children in this respect was irregular, any such irregularity was waived by the Defendant, in so far as it was a matter for the Defendant alone, rather than for the court. The Defendant knew all the material facts as to what is now said to be an irregularity and made no objection of any kind.

As to the separate interest of the court, referred to by Pearson LJ in Lewis v Daily Telegraph Ltd (No. 2), the conduct of the Claimants in instructing two firms of solicitors did not impact in any way on the conduct of the trial or otherwise on the conduct of the proceedings. The only potential impact of that conduct is in relation to the present point as to costs. That is a point which now needs to be decided on its merits and it would not have arisen if Jane and the children had instructed a single firm of solicitors.”

(Ong and others v Ping [2015] EWHC 3258 (Ch), at paragraphs 46 and 47.

By virtue of this approach, Morgan J may well have prevented the Court of Appeal having to decide, in this case, whether Lewis remains good law. This does, however, create some uncertainty over what would happen in a case where the defendants chose to take rather than waive the point about invalid constitution. This could potentially apply to any case in which co-claimants are separately represented without express permission of the court.

The Costs Impact

Morgan J’s decision on costs was that Lewis did not require him to hold that the claimants should be restricted to one set of costs only. Nevertheless, when assessing costs he took into account the fact that, had the claimants applied to the court to be separately represented, “the court would probably have refused to grant that permission”. Crucially, he went on to hold that the fact the claimants’ interests had diverged before the constitution of the action, and might diverge later, did not justify separate representation:

“The Claimants submitted that it was appropriate for Jane and the children to have separate representation. They referred to the procedural history and to the origin of the dispute in the Defendant’s application in relation to Jane’s IVA and the joinder of the children to that application. It was then accepted that the interests of Jane and the children were aligned in relation to the dispute about the trust. It was said, however, that their interests might later diverge if they were to be competing creditors of Madam Lim’s estate.

…I do not consider that it was reasonably necessary, after a certain point in this litigation, to have separate representation for Jane and the children. I can see that the interests of Jane and the children were not identical in the early stages of the Defendant’s application in relation to the IVA. However, on 20 July 2015, I ruled that while I would make orders for costs in relation to the Trust Issue and the Main Action, I would not otherwise deal with the costs of the litigation about the IVA, on the basis that the issues in that litigation have not been decided. The court ordered the trial of the Trust Issue on 30 October 2012. Jane and the children served a single Points of Claim in relation to the Trust Issue on 20 November 2012. Up to the point of service of that pleading, I can see that Jane and the children could justify the taking of separate legal advice but, from that point, I consider that separate representation was not reasonably necessary. As they themselves admit, their interests were aligned. There was in practice no conflict of interest as regards the arguments in relation to the Trust Issue and, later, the Main Action. That should have been clear upon service of the Points of Claim in relation to the Trust Issue. Accordingly, I conclude that the assessment of costs in this case should reflect the fact that separate representation was not justified as reasonably necessary from immediately after 20 November 2012.”

(Ong and others v Ping [2015] EWHC 3258 (Ch), at paragraph 60.)

The Trap

The trap that emerges from this decision is clear:

On the one hand, one can see that compliance officers in many firms of solicitors might well have been distinctly uneasy about representing all four claimants. Unease will have been heightened by the nature of the case. One has only to look at the first judgment (see Ong and others v Ping [2015] EWHC 1742 (Ch)) to see that one of the claimants had been engaged in litigation against an alleged original settlor in two jurisdictions over some twenty years. Her position seemed as a matter of common sense to be different from that of the other claimants, who indeed were in a different position as regards the trust itself. Further, a number of the allegations at large in the action were extremely serious. Put very simply, the claimants ended up (successfully) alleging that the original settlor had concealed the existence of the trust over many years and had obtained judgments by fraud. This raised difficult questions as to whether judges had been misled in previous litigation. As a matter of practicality, therefore, the case had many of the red flags that would make one especially uneasy about walking into joint representation.
On the other hand, separate representation led to an argument that the action had been invalidly constituted, some doubtless difflcult moments as that “knock out” point was debated, and a finding that costs had been unreasonably incurred. It is true that on the facts of this case the impact of the latter finding was limited by a sensible agreement between the solicitors that discrete tasks would be allocated to each of them (thereby, one suspects, removing some of the sting in arguments about duplication). Nevertheless, few lawyers will welcome a finding that their separate representation of a client was unnecessary.

The state of affairs established by the judgment will give legitimate cause for concern to those acting or contemplating acting for a co-claimant. The possible solutions, which would include applying to the court for directions or drawing regulators’ attention pre-emptively to the decision in Lewis are by no means as attractive in practice as they are in theory. The practical solution that should, by contrast, clearly be adopted is that of advising clients of the risks they run in costs if separately represented.

More broadly, one hopes that the issues raised by this case, and notably the question of whether Lewis remains good law, are addressed by the Court of Appeal sooner rather than later. In the meantime, it may well be that training on conflicts issues needs to address more explicitly the circumstances in which one is not simply “not conflicted” but may in fact be putting clients’ interests at risk by advising separate representation.

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Separate Representation, Conflicts and Costs: A Practical View from the Bar

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