Blankley v Central Manchester and Manchester Children's University Hospitals NHS Trust

Supervening mental incapacity terminates a solicitor’s actual authority to act for a client, but it does not ordinarily terminate or frustrate the underlying retainer. Frustration requires the contract to have become radically different or incapable of performance. A temporary inability to give personal instructions, particularly where a deputy may soon be appointed, normally causes delay rather than frustration. Authority may be restored when a duly empowered deputy gives instructions or the client regains capacity.

The claimant brought a clinical-negligence claim against the defendant Trust. After entering into a valid conditional fee agreement with her solicitors, she lost mental capacity during the proceedings. A receiver, later treated as a deputy, was appointed and authorised to conduct the litigation. The claim settled for £2.6 million plus costs.

Judge Harris held that incapacity had automatically frustrated and terminated the retainer and struck out parts 4 to 7 of the Bill of Costs. The claimant appealed that decision and the refusal to reconsider it. The central issue was whether incapacity terminated the solicitor’s retainer and, if so, whether the solicitors could recover their costs.

1. The appeal against the First Judgment was allowed. The defendant’s application to strike out parts 4 to 7 of the Bill of Costs was dismissed. There was no order on the appeal against the Second Judgment.
2. Supervening incapacity terminates a principal’s actual authority, as recognised in Drew v Nunn (1879) 4 QBD 661 and applied in Yonge v Toynbee [1909] 1 KB 215. Those cases concerned lack of authority and did not decide that the underlying contractual retainer ended.
3. Applying the narrow principles of frustration stated in Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 and J. Lauriitzen AS v Wijsmuller BV (The Super Servant Two) [1990] 1 Lloyd's Rep 1, incapacity did not frustrate the CFA. The obligation to give instructions was part of the contract, and any interruption was likely to be temporary. The retainer was not radically altered.
4. If the CFA had been frustrated, the deputy’s instructions or approval would have established authority to act, and the presumption that the client was liable for the solicitors’ fees would have applied under Meretz Investments NV v ACP Ltd [2008] 1 Costs LR 42. A frustrated CFA could not itself be adopted or ratified.
5. Section 7 of the Mental Capacity Act 2005 did not apply because the solicitors were instructed through the duly empowered receiver or deputy. Estoppel was unnecessary, and the alleged 2009 CFA was not proved.

1. High Court (Queen’s Bench Division): allowed the appeal against Judge Harris’s First Judgment and dismissed the application to strike out parts 4 to 7 of the Bill of Costs.
2. Manchester District Registry: Judge Harris held that the claimant’s incapacity frustrated and terminated the CFA and struck out parts 4 to 7. He later refused reconsideration.