The Court of Appeal has reinstated a LeO finding against a family law firm over capacity and compensation.
The court has reinstated an ombudsman decision that Aina Khan Law failed to assess a family client’s capacity properly and should pay compensation. The firm had acted for a client known as CXV in sensitive proceedings. The client later complained to the Legal Ombudsman about poor service. The ombudsman found the firm had not adequately assessed litigation capacity and that costs were excessive.
The compensation package included a refund of costs and a further reduction of £15,700 linked to the capacity issue. A deputy High Court judge previously quashed that part of the decision, saying the ombudsman had gone wrong in several respects. The Court of Appeal disagreed. Holgate LJ said the judge had stepped beyond the proper bounds of judicial review and that the ombudsman’s reasoning was legally adequate.
Litigation capacity means the ability to conduct proceedings, including understanding decisions, giving instructions and weighing advice. It is not the same as being distressed, unwell or difficult. Capacity is decision-specific. A person may be able to make one decision and not another. In family law, where pressure and emotion arrive together and remove their shoes at the door, lawyers must be careful before assuming a client can safely steer the case.
The ruling matters for two reasons. First, it strengthens the ombudsman’s room to make evaluative decisions about service quality. Judicial review checks legality, rationality and procedural fairness. It is not meant to re-decide every complaint because a law firm dislikes the outcome. The Court of Appeal’s message is that judges should not dismantle an ombudsman decision by reading it as if it were a conveyancing requisition.
Second, the case presses a live professional point: capacity is not a box-tick. Firms need a clear record of why they considered capacity, what signs they saw, what steps they took, and when they reviewed the position. A client in crisis may appear articulate and still struggle with litigation decisions. A good lawyer notices the difference.
For firms, the commercial risk is plain. A poor capacity assessment can trigger complaints, fee reductions, negligence claims and reputational bruising. Family lawyers are especially exposed because the work is personal, urgent and expensive. Clients often complain after the dust settles and they finally have space to inspect the bill.
For consumers, the decision is a small but important protection. The ombudsman exists because poor service in legal work can hurt people who do not have the money or stamina for more litigation.
The Court of Appeal has not made LeO untouchable. It has said its decisions should not be unpicked with tweezers borrowed from the wrong drawer.
The judgment also gives LeO practical breathing space. Complaint schemes cannot function if every evaluative finding is treated as an invitation to full forensic reconstruction in the Administrative Court. Firms need a remedy when ombudsmen act unlawfully. Consumers need a scheme that does not collapse under lawyerly second-guessing every time a cheque is ordered.
Author: Sophie Carrington
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