Kenneth Johnston v Financial Ombudsman Service

Capacity to conduct litigation is both decision-specific and time-specific. Under the Mental Capacity Act 2005, the court must identify the particular proceedings and relevant information, assess the statutory abilities, and establish a causal link between any inability and an impairment of mind or brain. A diagnosis, vulnerability or expert assertion does not by itself rebut the presumption of capacity. Evidence must explain the effect of the impairment at the material time and address the actual proceedings. Reasonable adjustments may be required to secure fair participation, but the need for adjustments does not itself establish incapacity. The court additionally indicated that a person lacking capacity cannot validly commence proceedings in their own name without a litigation friend.

Mr Johnston brought claims against the Financial Ombudsman Service alleging disability discrimination and failures to make reasonable adjustments in connection with its handling of his complaints. The claims were struck out by a deputy district judge on grounds including statutory immunity, judicial-function exemptions and incoherent pleading. HHJ Saggerson refused an amendment to the appeal grounds and dismissed the first appeal on 8 February 2023.

On this second appeal, Mr Johnston relied on psychiatric evidence asserting that he had lacked capacity to conduct proceedings since 2010. He also challenged the treatment of his requests for reasonable adjustments at the earlier hearing and sought to revive the immunity issue. The central questions were whether he was a protected party under the Mental Capacity Act 2005 and the Civil Procedure Rules 1998, and whether the proposed grounds satisfied the second-appeal requirements.

The appeal was dismissed unanimously. Permission to appeal on the remaining grounds was refused.

1. Capacity. Lord Justice Baker applied the approach in A Local Authority v JB [2021] UKSC 52. Capacity must be assessed in relation to the particular matter and at the material time. The court must identify the relevant information, including reasonably foreseeable consequences in the specific factual context, assess the person’s ability to understand, retain, use or weigh that information and communicate a decision, and then determine whether the inability is caused by an impairment or disturbance of mind or brain.
2. Evidence. The presumption of capacity is fundamental. It can be displaced only on the balance of probabilities after careful enquiry. Dr Attavar’s evidence did not identify the proceedings, explain how Mr Johnston’s conditions affected the statutory abilities, provide sufficient historical support for the assertion of incapacity since 2010, or reconcile the conclusions in his report and certificate. Dr Rao’s later, reasoned opinion was preferred. Mr Johnston therefore failed to establish that he had lacked capacity and was not a protected party.
3. Adjustments and fairness. The court recognised a legal duty to consider and, where appropriate, make reasonable adjustments so disabled litigants can participate as fully as reasonably possible. However, the omission to recognise the requests at the deputy district judge’s hearing did not give the proposed appeal a real prospect of success. By the first appeal Mr Johnston had legal representation, yet no draft particulars had been produced and the claim remained unpleaded.
4. Second appeal. Under the Civil Procedure Rules 1998, the decision had to be shown to be wrong or unjust because of a serious procedural irregularity, and permission for a second appeal required a real prospect of success together with an important point of principle or practice, or another compelling reason. Those requirements were not met. The immunity ground had also been expressly abandoned at the first appeal, and no incapacity had been established to undermine counsel’s authority.
5. Additional procedural reasoning. Lord Justice Coulson, with whom Lady Justice Asplin agreed, interpreted CPR rule 21.3 as addressing protection for a child or protected-party defendant after service. It did not permit a person lacking capacity to commence proceedings validly without a litigation friend. This additional reasoning was not necessary to the result because incapacity had not been proved.

• Court of Appeal (Civil Division): The second appeal was dismissed. Permission to appeal on the remaining grounds was refused.
• Central London County Court: HHJ Saggerson refused an amendment to the grounds of appeal and dismissed the appeal against the deputy district judge’s order on 8 February 2023.
• Central London County Court: Deputy District Judge Althaus struck out the claims and ordered costs on 15 December 2021.