Burden of proof on client to show he had lost capacity to enter into contract
An elderly barrister with dementia had the capacity to instruct a law firm and was liable to pay its fees, the High Court has ruled.
Costs Judge Whalan said the deterioration in the contractual capacity of ‘KFL’, a “well-known and distinguished barrister and academic”, was “characterised by a gradual, steady deterioration, rather than a precipitous bright-line moment when his status notably changed”.
Judge Whalan said he had instructed Kent law firm Furley Page in October 2020, and between then and December 2021, it sent him seven invoices totalling £72,850, but only £1,000 had been paid.
As a preliminary point in the detailed assessment, the judge dealt with a point of dispute that argued KFL, the defendant in the proceedings, did not have contractual capacity to enter into the contract to retain the law firm.
The judge said he was not satisfied that KFL, now aged 91, had discharged the burden of proving that he had lost capacity in October 2020.
The “first point in time when this conclusion could be justified and stated with any confidence” was June 2021.
To be “cautiously clear”, Judge Whalan said he found as a fact that the law firm did not have “actual knowledge” of KFL’s lack of capacity as a contracting party until 29 July 2021.
“I have seen no persuasive evidence to suggest that the claimant had constructive knowledge of the defendant’s condition prior to that date. As ever, reaching such absolute conclusions in a case in which bright-line certainty is characteristically absent, is a challenging process.”
The Senior Court Costs Office heard in Furley Page v KFL [2025] EWHC 1703 (SCCO) that KFL suffered from “significant deafness, a lifelong condition, and in August 2020 he was diagnosed with mixed Alzheimer’s disease and vascular dementia”.
KFL had executed lasting powers of attorney (LPAs) for property and affairs to two former colleagues and friends from his chambers in October 2009.
The attorneys received notice in late 2020 that the LPAs had been revoked, and they were to be replaced by new attorneys, SL and TL, a nephew and niece of KFL.
SL and TL asserted that KFL had instructed Furley Page in October 2020 and, at about this time, KFL had made a new will, leaving “significant bequests” to them. The following month Furley Page recorded that KFL had attended a three-and-a-half-hour meeting with them.
The existing attorneys issued an application to seek the court’s directions and in January 2021 Mr Justice Hayden made an order directing the Office of the Public Guardian (OPG) to suspend processing of the deed of revocation of the existing LPA and registration of the new one. The Official Solicitor was invited to act as KFL’s litigation friend.
In the context of separate High Court proceedings relating to the new will, the OPG had launched an investigation into concerns about KFL’s health and management of his financial affairs.
The OPG closed this investigation in late January 2021, because it had received assessments finding KFL had capacity to make decisions about LPAs.
A solicitor at Warners Solicitors was appointed as KFL’s deputy for property and financial affairs in May 2021 and the following month psychiatrist experts agreed that he had lost capacity.
Judge Whalan said that capacity was presumed and the party challenging it had to prove otherwise on the balance of probabilities. The law firm must also have “actual or constructive” knowledge of the incapacity.
He concluded: “I am not satisfied that the defendant has discharged the burden of proving that the defendant had lost capacity to enter into a contract by October 2020. Indeed, I find as a fact that he had such capacity when the retainer with the claimant was concluded on 4th October 2020.
“I am satisfied that the reports of Peterkin Ofori of Mental Capacity Consults in October and November 2020, accurately recorded and assessed the defendant’s capacity as it was at that time. Whatever Mr Ofori’s precise status as an expert, he was instructed properly and carefully by the claimant, who was aware of the defendant’s dementia diagnosis and keen to ensure that he had capacity, and his reports suggest a structured, informed and accurate analysis.
“The Office of the Public Guardian, moreover, recorded in late January 2021, that it was ending its investigation, having ‘received mental capacity assessments’ which found that the defendant had capacity ‘to make their own decisions about their lasting power of attorney (sic)’.”
KFL maintained capacity until 22 June 2021 when, on the balance of probabilities, his dementia deteriorated to the extent that he no longer had the capacity to contract. Furley Page had “actual and/or constructive knowledge” of this from 29 July 2021.
Mr Waters, Costs Lawyer (at Furley Page) for the claimant. Ms Aldred, counsel (instructed by Clarion) for the defendant