Baker Tilly (a firm) v Makar

Where a litigant’s capacity to conduct proceedings is questioned, capacity must be assessed in relation to the particular proceedings and at the relevant time. The statutory presumption of capacity applies. A court should not ordinarily determine incapacity solely from its own impression of a litigant, particularly where medical evidence is unavailable. The absence of medical evidence is not an absolute bar, but the court must proceed with great caution. Relevant evidence includes the litigant’s conduct in other proceedings and whether an apparently serious incident was brief, spontaneous or followed by an adequate recovery.

Baker Tilly appealed against an order made by Master Leonard in the Senior Courts Costs Office. The Master had stayed detailed assessment of Baker Tilly’s costs pending the appointment of a litigation friend for Mira Makar, having concluded that she lacked capacity to conduct the assessment. The conclusion was based principally on an incident during the assessment and Makar’s subsequent conduct, in circumstances where she had refused to co-operate with obtaining medical evidence.

The appeal concerned whether incapacity had been established and whether the assessment should remain stayed. The court also considered the consequences under Part 21 of the Civil Procedure Rules and the appropriate consequential directions.

1. Appeal allowed. The finding that Mira Makar lacked capacity and the stay of the costs assessment were set aside. The application for an interim costs certificate could proceed before Master Leonard.

2. Under CPR Part 21, a protected party is a party who lacks capacity to conduct proceedings within the meaning of the Mental Capacity Act 2005. The principles in section 1 of that Act apply when capacity is assessed under section 2. Capacity is therefore presumed unless lack of capacity is established, and a person is not to be treated as unable to decide merely because an unwise decision has been made.

3. The issue was whether Makar was unable to make decisions about the costs assessment because of an impairment of, or disturbance in, the functioning of her mind or brain. Although medical evidence will ordinarily assist the court, its absence is not an absolute bar. Where medical evidence cannot be obtained, however, the court must be particularly cautious because a finding of incapacity removes the litigant’s right to conduct the litigation and may also prejudice the opposing party.

4. Master Leonard had placed more weight than the evidence could bear on Makar’s brief loss of self-control. He should also have considered her ability to conduct other proceedings without other judges raising concerns about her capacity. The wider evidence did not establish, on the balance of probabilities, that she lacked capacity.

5. The court declined to determine the interim costs certificate itself. Master Leonard was better placed to assess the vulnerability of the bills and the amount, if any, that could safely be certified. The Official Solicitor’s appointment as litigation friend for the appeal was brought to an end. The appeal costs were treated as costs in the assessment proceedings.

• High Court (Queen’s Bench Division): appeal from Master Leonard’s order of 4 January 2013 allowed. The stay was set aside and the interim costs certificate application was referred back to Master Leonard.