Sibthorpe v London Borough of Southwark [2011] EWCA Civ 25: get the champerty out

English law used to be suffused with obscure terms.  Detinue, enfeoffment, ejectment, replevin.  All long gone with the Rush to Modernity.  One that still survives is champerty.  Simply put, it’s what bans solicitors having a stake in a case.  A solicitor is an officer of the court, and it has long been held that it creates a conflict of interest.  If the solicitor gets a bonus for winning a case, it could be tempting to crack the rules a little.

It’s a common law doctrine, not set up by statute.  Which means that it can be changed by statute.  And indeed has.  The most obviously champertous thing for a solicitor to do is agree that they will only get paid if they win.  You can hardly have a greater interest in the case.  Common law bans it.  Despite numerous attempts by the Court to get around this, no Court had the guts to abolish it, save for an odd one in the case of Thai Trading v Taylor – a Court of Appeal judgment that has been studiously ignored ever since.  So, Parliament got around it.  Section 58 of the Courts and Legal Services Act 1990 allows conditional fees – no win no fee – to be used.  The solicitor gets rewarded by being able to add a percentage uplift to the basic fee.  Which the losing party will pay.  On the basis that the bonus for the winning cases will compensate for the risky lost cases.  This is of course a big problem – a good solicitor will be able to pick out the 60%-chance-of-winning cases, win them all, get big percentage uplifts, and not have to suffer the loss of a losing case, by simply not taking them on…

So this limited form of champerty is specifically permitted.  Contingency fees – getting a slug of the damages – are not; that is a step too far.  For England at least.

As solicitors can often double their money with conditional fees, losing parties pore all over the agreement to find some technical error which makes the fee unenforceable.  In the Sibthorpe case Southwark Council thought they had found something.  Belshaw & Curtin represented a number of tenants who sued the Council over building defects; the claims settled with the Council agreeing to pay recoverable costs.  B&C had acted on a conditional fee.  Only a 10% uplift, so confident of victory.  So confident, in fact, that they had persuaded tenants to sue by promising to pay the Council’s costs if they lost.  A-ha, said the Council.  This is champertous.  You have an interest in the case.  Not in winning, but in not losing.  You will lose money by losing the case; that goes beyond the Act.

Costs judge originally agreed with the Council.  Which meant that B&C could not get their fees paid by anyone.  Harsh.   So they appealed, second time around a High Court judge decided, yes, they could get their fees.  So the Council appealed.

High-powered Court of Appeal; Neuberger MR plus Lloyd LJ.  And even the traditional new bug on the appellate bench was a high-powered one, namely Gross LJ, the head of the Commercial Court.  So they were taking it seriously.  Indeed Neuberger went through the history of champerty and confirmed that, no, it won’t be abolished just yet.  And that the agreement B&C had with clients fell outside the provisions of the Act.  Therefore they couldn’t rely on the blanket conditional fee exemption.   All going badly so far.

But was the agreement champertous?  The Court decided that the general fashion was to move away from the champerty trap.  Not to extend it.  Would the agreement be champertous because of the promise for an indemnity?  The Court followed the principle that many things may be done, but nothing for the first time.  Nobody had found a case that an indemnity would be champertous; therefore the indemnity would not be champertous.  So that was fine – and the remainder of the agreement did fall within the Act’s provisions.  Although the Court does not seem to have split the agreement into two, this seems to be the upshot.  The indemnity falls outside the Act, the rest does not.  Champerty was a matter of public policy; barring the B&C agreement would not be in the public interest, as it would put people off suing.  Especially if, as in Sibthorpe, their claims were successful.

A bit of a relief for B&C, then, they got paid for their good work. Or at least they will.  Given the public interest in the whole issue of litigation funding, it is possible that it will go to the Supreme Court, although given the strength of the Court of Appeal’s reasoning, and the particularly acute intellectual analysis provided by Neuberger and the support of two other important judges, it is possible that this will remain the final word on the indemnity issue.  Certainly we do at least have clarity on those rare cases where the solicitors put their money where their mouths are.

Nicholas Prestige Homes v Neal [2010] EWCA Civ 1552: read read read

People enter contracts all the time without reading the clauses.  Because they are often not there.  There’s just a comment stating that there are terms somewhere.  That’s enough to bring those terms into a contract; it would be burdensome to hand over a leaflet with reams of small print every time you buy a bus ticket or a bag of crisps.  It’s not so bad because unfair terms are caught by legislation.

Sometimes people do provide their terms.  That’s what Nicholas Prestige Homes did with the Neals.  The Neals wanted to sell their house, instructed a number of agents, got nowhere, so approached NPH.  Which agreed to act as estate agent, but only if it was the sole agent.

The contract was sorted by email.  NPH sent through its contractual documentation: a covering email, and two agreements, one a “sole” agreement, the other a “multiple agency” agreement.  Confusing?  Not when you read the email.  The NPH representative stated that NPH would work on a multiple agreement for the next month or so, to allow the Neals to dis-instruct the other agents, and would then take over on a sole agency basis.  In contractual terms, that was the offer; the acceptance was the email response from Mrs Neal.  “That’s fine, look forward to some viewings.”

The problem was Mrs Neal didn’t really look at the email or the attachments.  She had no intention of having NPH as sole agents; she wanted NPH to be one of a number of agents.  But her state of mind was irrelevant.  You look at the contract objectively.  What does the objective person see?  An email from NPH saying “we’ll be on our own” and a response saying “OK”.  The objective person would not be able to read Mrs Neal's mind and would assume the contract was, after a month or so, on a sole agency basis.

And, of course, what happened?  A month and a half later NPH got a phone call, all phones were engaged, but there was a voicemail.  Seen the Neals’ property, v interested, call me back.  Someone at NPH did call back immediately, but got an engaged tone.  Whom was the person now ringing?  Plumm.  Another estate agent.  Whom the Neals had retained.  In breach of the sole agency agreement.  And the person playing telephone tig with NPH ended up buying the Neals’ house.  Plumm got the commission as they dealt with the sale.  NPH missed out on ten grand.

NPH therefore sued.  Breach of contract.  It was an easy enough breach to prove; the contract had been agreed by Mrs Neal on the Neals’ behalf, at least on an objective viewpoint.   The difficulty was the damages.  NPH had to prove it had suffered a loss.  What it managed to show the court was that it would probably have landed that very sale; the eventual purchaser had contacted NPH to discuss buying.  On a balance of probabilities that sale would have gone ahead with NPH as agent rather than Plumm.  The Court thought about a discount on the basis NPH might somehow have put the buyer off, but decided against it.

So, a simple enough case, but one that emphasizes the importance of reading documents before you commit to it.  Unlike a random consumer contract, the agreement between NPH and the Neals was almost bespoke, so legislation was not so much of a protection; plus there was nothing unfair about NPH’s offer.  It wasn’t even as if the sole agency bit was a trap, it was clear in the covering email.  At the very least, had Mrs Neal emailed back stating “we’re happy to have you as one of our agents”, it would be considered a counter-offer.

Thorpe v Fellowes Solicitors LLP [2011] EWHC 61 (QB): importance of paperwork

In 2003, Mrs Hill, then aged 78 sold her house and gave the proceeds to her daughter.  So they could live together.  A quotidian transaction.

Trouble was Mr Thorpe was not happy.  Mr Thorpe is Mrs Hill’s son.  He didn’t get a penny.  What’s more, Mrs Hill then suffered from dementia.  Mr Thorpe decided that Mrs Hill must have been influenced by her daughter to sell the house and give her the money.  He didn’t want to sue his mother or daughter, indeed, how could he?  He had no legal standing.  Instead he applied to Court to become Mrs Hill’s guardian, so that he could bring claims on her behalf, and then did so against Mrs Hill’s solicitors.  Saying that they should have spotted Mrs Hill’s dementia and her daughter’s undue influence.

It took until late 2010 for the claim to come to Court.  Nearly 8 years after the sale of the property.  Mainly because it took until late 2009 to issue the claim.  Not surprisingly, the solicitor who advised Mrs Hill, Ms Butler, could not remember a one-off instruction from way before.  The important thing was that Ms Butler had kept a very good record of what happened.  Contemporaneous documentation.  It proved to be one of the key difference makers in the case.

What did Ms Butler do?  She did the usual things a conveyancing solicitor should do; client care letter, mortgage redemption statement, searches on the property Mrs Hill was going to buy with her daughter.  And she took another step.  Most of the instructions were dealt with by Mrs Hill’s daughter, so Ms Butler asked the daughter to bring Mrs Hill to their offices to sign the contract of sale.  And she noted on the file why she did so.  A clear attendance note stating that Ms Butler wanted to check that Mrs Hill had fully agreed to the sale.  That she was not being forced.

They duly met, and Ms Butler made another attendance note.  Mrs Hill fully understood what was going on.  And again the note contained the reason  behind their meeting – and that Mrs Hill was “adamant” that she wanted to sell up and live with her daughter.

It’s all crystal clear.  Even though Ms Butler had no suspicion at all that Mrs Hill might have been suffering from dementia, she had assessed Mrs Hill and recorded that Mrs Hill was perfectly compos mentis.  And this had a huge effect on the case.  The only way to prove that Mrs Hill was suffering from dementia in 2003 was to go to an expert; the expert had to go through medical records and contemporaneous documents to see what Mrs Hill might have been like at the time. 

The Court decided to order a single, jointly-instructed, expert.  A Dr Cockerell.  His view was that Mrs Hill might have been suffering from dementia in 2003, but that it would not have interfered with her decision making.  Even such decisions like selling her house.  And certainly a competent solicitor would not have perceived any problems; even a medic may not have noticed anything amiss.  Essentially, he destroyed Mr Thorpe’s case.  Would he have reached that conclusion without the clear attendance notes from Ms Butler?  Very possibly not.  Dr Cockerell relied on those notes - an independent witness to Mrs Hill's state of mind - to verify Mrs Hill’s state of mind in 2003.

Mr Thorpe continued with the case, disastrously.  He issued a witness summons on Dr Cockerell, forcing him to cancel a day’s worth of clinic or face contempt proceedings.  The judge didn’t like that.  Mr Thorpe tried to call his own doctors who had previously suggested the dementia angle.  The judge didn’t like that either, there was no permission for calling any experts other than Dr Cockerell.  He tried to claim a signature had been forged without any evidence.  The judge didn’t like that.

The case therefore collapsed in fairly short order.  Ms Butler’s careful and considered approach to her client and keeping her file up to date may well have won the case outright.  Certainly the judge liked THAT.

One knock-on effect: Mr Thorpe’s solicitors wrote to his own pre-case experts demanding why they had come to a different conclusion to Dr Cockerell.  As the judge pointed out, this is not uncommon; medicine is a developing science.  What the judge certainly didn’t like was the insinuation in the letters that the difference of opinion might be a professional standards issue.  An unwonted threat.  Currently a case is going before the Supreme Court concerning whether you can sue a Court expert for going off on one; this case may be of some importance.  Would any expert be happy making concessions in a case if those instructing them promptly sued them?  Would that be not inhibitive of justice? 

Everett & ors v Comojo (UK) Ltd t/a The Metropolitan & ors [2011] EWCA Civ 13: painful lesson

Does a nightclub have to protect its visitors?  Yes and no.  There you go, the perfect legal answer.

This is one of those cases where the Claimants come off particularly badly.  Not just because they lost, but because the casual reader might think that they brought their brutal treatment on themselves.  Simple enough story, they went to the Met Bar in Old Park Lane, a members- and guests-only bar.  The Claimants were the guests of a member, and took a particular liberty; one of them slapped a waitress on the jaxie.  Another member, Mr Balubaid, noticed this and was not impressed.  Mr Balubaid was a big spender and not known for violence.  But he did have a bodyguard. Interesting.

The waitress brushed off the incident, but Mr Balubaid told her that she would get an apology before the night was through.  A bit later Mr Balubaid asked the waitress to allow his driver to be placed on the guest list.  So she did, he turned up, had a tequila (perhaps he was not driving last night), shared a joke at the bar.  All well and good?

Not quite.  This “driver” made Mr Universe look like Jarvis Cocker.  The waitress thought that something may happen and went off to see the manager to warn him.  Too late.  Just as she left his office, she heard breaking glass.

What had happened was that the Claimants had decided to leave.  Mr Balubaid suggested that, before they do so, they wait to apologize to the waitress.  Mr Everett, the lead Claimant, responded in a way which suggested that Mr Balubaid should be on the point of micturating.  This was definitely the wrong answer.  The driver drove his fist into Mr Everett’s face.  And then chased the now-fleeing Claimants with a knife, caught them, and stabbed them several times.  Two of them suffered serious injuries, but recovered; the driver was sent down, initially for life, but is now out.

It was pretty obvious whom the Claimants should sue for their injuries.  The driver.  Only he had no money.  They could sue the driver's employer, Mr Balubaid.  Only he had gone AWOL and nobody knew where he was.  So they had to be a bit more creative.  They sued the security firm working the doors for letting a knife-wielding maniac in; struck out quickly, there was no likelihood of success, the knife was well hidden and there was no suggestion of negligence.  So they were stuck with suing the bar.  For negligently failing to keep its visitors reasonably safe.

To succeed in a claim, the Claimants had to show the Holy Trinity of tort law was satisfied. Duty, breach, causation.  Start with duty.  That in turn is the threefold test from Caparo v Dickman; foreseeability, proximity and fairness.  Could they nail these?  Foreseeability was easy – in a nightclub, people drink, when people drink, they get violent.  One down.  Proximity?  They couldn’t get more proximate than be in the very bar itself.  Two down.  Fair?  Yes – within limits.  The Court looked at the Occupier’s Liability Act 1957, which was about the state of the bar itself, and thought it would have been odd that a visitor who fell over a bit of carpet would be able to claim, but a visitor who was marmelized by a sociopath let in by the occupier would not.

So, duty was OK.  Problem is, the duty was not set very high.  Letting in a known sociopath was one thing; Mr Balubaid had no record of violence.  How far do you go in keeping ostensibly "normal" people out?  Had the bar reached the appropriate standard of a normal bar?  Which was to do what was reasonable in the circumstances?  Could the people there keep an eye on every visitor? 

Schools are not liable for playground accidents with appropriate supervision, even if this means a couple of teachers looking after a hundred children, as accidents will happen.  People cannot be kept 100% safe in all circumstances.  And in this case the Court held the bar had done enough.  The waitress had done the responsible thing, she had informed the manager, and there hadn’t been time to defuse the situation.  The Claimants suggested she shouldn't have wasted time with the boss and should have gone to the security guys.  The Court disagreed.  Why should she have informed security and have a valuable customer thrown out apropos of nothing?  The bar staff could not take pre-emptive action either.   The appropriate thing was to go to the manager, who would have experience of this sort of thing.  It wasn't the bar's fault that the situation escalated so quickly.

Therefore, there is a duty, but not too strong a duty.  A responsible bar should always be able to meet that duty with some ease.  Certainly the Met had – to the disappointment of the Claimants.  They had a sure-fire can’t-lose claim, certainly; but against the wrong people…

Clift v Slough Borough Council [2010] EWCA Civ 1171: I fought the law and…I won

There's a story that someone once rang one of those phone numbers on the back of a lorry under the question "how am I driving?"  Instead of being able to launch a tirade of complaints about said lorry's motorway menaderings, they got through to an operator who ended up trying to sell the haulier's product.  Remember: complaints departments are not necessarily there for your good...

Case in point.  Mrs Clift had a complaint.  She suffered a tirade of abuse from a drunk babysitter in a public park.  She contacted the Anti-Social Behaviour Co-ordinator at Slough Council.  One would have hoped that the Council would have re-considered the title, given that it suggested that the office incumbent was in charge of co-ordinating anti-social behaviour, but given the avalanche of apathy Mrs Clift received from said incumbent, culminating in Mrs Clift flinging her phone down so hard that she broke it, perhaps the description was accurate.

Mrs Clift now had two complaints.  Three, if one includes the brittleness of telephonic equipment.  So she wrote to the Council.  In somewhat vituperative terms.  “I felt so affronted and so filled with anger that I am certain I would have physically attacked her if she had been anywhere near me.”  Even though, as Mrs Clift said in the letter, she was not a violent person.  A threat better on the wind than in print, perhaps.  Because how did the Council respond?  By placing Mrs Clift on the Violent Persons Register.  And sending it out on a mass email.  To 66 members of the Council, a roadsweeping firm, a council housing repair firm, the local hospital and 50 businesses in the town centre.

So Mrs Clift sued for libel.  The Council defended on the basis that Mrs Clift WAS a violent person – she had threatened to use violence against a council worker – and, if that did not work, on the basis of qualified privilege.  The defence that protects the honest reference-giver or reporter-to-the-police.  You get it wrong, but you get it honestly wrong, and you don’t tell anyone you shouldn’t.  The Council’s defence on this looked quite decent.  It had sent the email out to a select audience, those who might deal with Mrs Clift and therefore might need to know of her apparent tendencies towards violence.

Thing is, it was a libel case, and so went before a jury.  The Court had to rule on whether the qualified privilege defence worked.  And the Court held that it did NOT.  Not fully, anyway.  Yes, it covered the emails to those who dealt with community safety; it did not cover the emails to the hospital, or the staff responsible for schools, or the roadsweepers and so on.  There was no need for those people to know about Mrs Clift’s burst of moral indignation.  They were never likely to meet her. 

The consequence of this was twofold.  Firstly, for Mrs Clift to win regarding the email being sent to those who needed to know, she had to show that the Council worker who drafted up the email was acting maliciously - malice beats qualified privilege.  She didn’t.  Secondly, for the Council to win on the email being sent to random rubbish-sweepers and stochastic store owners, it had to prove what it said was true - the only defence that would win in those circumstances.   If it could not, then Mrs Clift would win .  It couldn’t.  The jury, unlike the Council, did not see Mrs Clift as violent.  Mrs Clift was awarded damages of £12k.

The Council appealed.  Primarily on the basis that it was difficult for the Council to separate out those who had a need to know from those who did not.  And that its decision to send the Register to everyone was proportionate.  That argument didn’t work.  It wasn’t THAT hard to suss it out.  The Council ended up relying on the last refuge of the would-be damned – the Human Rights Act.  The Council had a human right to be on the safe side.  That argument didn’t work either.  Mrs Clift also had rights – the right not to have the Council wrongly paint her with a violent brush.  Appeal dismissed.

The big problem with this case, as ever, is not with libel itself.  The legal issues are quite clear; Mrs Clift may have been unwise in her choice of language, but does a truly violent person list in grammatical detail exactly how they would beat up their interlocutor?  Mrs Clift was complaining about the Council to the Council, and the Council decided to silence her by putting her on a list with the truly violent.  If Mrs Clift went off at the deep end, the Council was in the Marianas Trench.  A district judge could have reached that conclusion in perhaps half a day of seeing Mrs Clift in the witness box – and showing working for qualified privilege is the kind of thing you’d get in a law school exam.  Not difficult in the least.

No.  The problem is that of costs.  Estimates suggest the case – a twelve-grander, the sort of thing commercial lawyers would knock off in a few letters and which wouldn’t take up more than a day in Court – will set the Council back half a million quid.  Mrs Clift took advantage of a no-win no-fee arrangement – quite rightly, she had a good claim, as a jury found – but why should the case have cost so much and taken up so much time?  No wonder the Council appealed, even if it was just a negotiation tactic; but that appeal took up more Court time and maybe delayed another, more valid, appeal…

Hillside (New Media) Ltd v Baasland & Ors [2010] EWHC 3336: jurisdiction race

Remember the Slavia Prague case below?  This quick case shows how you can ensure English jurisdiction without any of the messy battles that took place in that one. 

Hillside is a subsidiary of bet365, and English.  Mr Baasland is a Norwegian with a gambling problem.  The others were other bet365 subsidiaries in the Netherlands Antilles and Gibraltar and brought in to avoid any loopholes.  The dispute was not really a dispute.  Mr Baasland had spent shedloads of money on bet365 and had had a winning streak like the Harlem Globetrotters’ opponents.  His bets were placed with bet365 in Norway, Germany, Denmark and the Czech Republic; bet365 processed those bets in England and Gibraltar.   So lots of international law there.

Having lost nearly £1.5m, Mr Baasland apparently had second thoughts about his gambling spree.  Not only had he blown his own assets, but loads of money his parents had borrowed.  So in 2008 he instructed Norwegian lawyers.  They wrote to bet365, stating that they would sue bet365 for negligence.  In Norway.

So bet365 decided to sue instead.  In England.  They issued proceedings early in 2009 for a declaration that it was not liable to Mr Baasland.  You can see how that works.  Once it’s in the English system, it’s up to Mr Baasland to challenge it – in England.  The Norwegian courts could not touch it, because Norway (as a member of EFTA) has signed up to the various conventions that ensure the Court first seised deals with the matter fully first. 

Mr Baasland was therefore at a huge disadvantage.  He challenged jurisdiction in England but never carried it through.  So bet365 proceeded to ask for summary judgment, on the basis that Mr Baasland had no chance of succeeding.  After some to-ing and fro-ing about whether England was the right place for the whole thing, the judge agreed to grant that summary judgment. 

The advantage of this is that Mr Baasland cannot now sue in Norway.  The matter has been considered and dealt with.  Any Norwegian proceedings would be a breach of European law and unenforceable in England.  (Or Gibraltar.)  Bet365’s tactic of being active, rather than passive, ensured that it was able to have a hearing on its home turf, in a legal system where its lawyers would know how things worked, where it's mightily difficult to get your money back from the bookie.  Saving costs and money; no need for bet365 personnel to head to Norway to give evidence, no need for the extra expense of interpreters and whatnot.  And getting the right result.  Although the Courts encourage people to avoid rushing off to issue claims, in this case bet365 did exactly the right thing.  Had Mr Baasland issued in Norway rather than writing to bet365 the matter might still be before the Norwegian court.  You snooze, you lose.  A familiar feeling for Mr Baasland.

Quinn v CC Automotive Group t/a Carcraft [2010] EWCA Civ 1412: well dodgy

Mr Quinn wanted to swap his silver Jag for a red one.  So he popped along to Carcraft.  He met a salesman there, a Mr Khan.  No red ones, I’m afraid, sir.  We do have this nice blue one.  Part-ex yours and for seven and a half k extra it’s yours.  I can arrange the financing for you, we just swap your current payments over.  OK, I’ll take it.  Deal done.

Then some good news.  Mr Khan on the phone.  We’ve got a red one now.  Mr Quinn went along to see it.  It’s not here now, sir, but here’s a picture on the computer.  Excellent, just what I need.  Deal amended.

The deals were thrashed out at a service station a couple of weeks later.  All signed up.  Car will be with you next week, sir.  And it was.  Just bring another £700 and it’s yours, sir.  Bit of trouble with the finance company.  You only have £400?  No problemo, we can settle that later.  No need to come into Carcraft, sir.  We can deal with it at the service station, it’s half-way between us.  I’ll even sort out your finance company.

Mr Quinn turns up at the service station, £400 in hand, Mr Khan is there with the red Jag.  Mr Quinn looks at it, sees no problem, hands over the money, drives off. And they all lived happily ever after.

Well, if “ever” means “a month”.

Anything strike you as suspicious about the above deal?  It all looks in order.  Maybe a little odd that it was done at a service station, redolent of football agents, bungs and Arthur Daley, but isn’t that a salesman being helpful to shift a pricey motor?   Don’t salesmen often go the extra mile to get their commission?

Thing is, Mr Khan was not being a salesman.  He was being a Rogue.  He promptly flogged the silver Jag on to an innocent punter and then “forgot” all about clearing the existing finance Mr Quinn had on it.  So the finance company chased Mr Quinn for the outstanding balance.  Mr Quinn was now paying for two Jags.  But he was a demi-Prescott.

Mr Quinn sued Mr Khan, and won.  Good luck in executing that judgment.  Mr Khan was a wisp in the wind.  Mr Quinn was therefore still several thousand out of pocket.  So Mr Quinn also sued Carcraft.  Hey, he was your salesman.  Hang on, you can’t blame us for THAT!  He wasn’t even on our premises when he did the deal.  No, Mr Khan was on a frolic of his own.  So we’re not liable.

Amazingly, the Court at first instance found in Carcraft’s favour.  The reason?  The deal was well dodgy.  Surely any purchaser would realise these deals are done on the forecourt and not at service stations.  The domain of the dodgy dealer and shady agent.  More to the point, why would Mr Khan do the deal when it looked like he was £300 short?  Because Mr Quinn didn’t have the full £700?  A second-hand car salesman turning down three hundred in bunce?  No way would Arthur Daley ever have done that.   That in itself should have made it obvious that Mr Khan was up to no good.  He was therefore not acting for Carcraft but on his own terms.

Less amazingly, the Court of Appeal overturned the first instance decision.  The principles of vicarious liability for the acts of an employee are well-established.  Did it look as if Mr Khan was acting within the course of his employment?  Yes.  Mr Khan was employed to sell cars, he was selling a car.  He introduced the deal on Carcraft’s premises.  Carcraft had imputed knowledge of what was going on.  More to the point, let’s assume that Carcraft had no knowledge about Mr Khan and his somewhat shady past.  In which case Mr Quinn and Carcraft were both innocent victims of Mr Khan’s activity.  One of them should bear the loss.  Which one?  As Hold CJ put it way back in the 17^th century, “it is more reasonable, that [the master] should suffer for the cheats of his servant than strangers”. 

This maxim can only apply of course if the servant is acting with the ostensible authority of the master.  Good luck in suing Barclays if one of their counter staff sells you an iffy DVD.  And Mr Quinn would obviously see Mr Khan had Carcraft’s authority.  He was in their internets, pimping red Jags.  No doubt that it was reasonable for Mr Quinn to assume everything was above board.

So, based on 300 years of authority, the Court of Appeal readily found Carcraft liable.  A bit unfair, perhaps?  Because Carcraft unknowingly employed a Rogue?  Not quite – Mr Khan had moved from Rochdale’s Carcraft branch after he had been involved with the coppers…