The High Court has ruled that the loss of a client’s mental capacity should not automatically terminate the solicitor’s retainer.

Mr Justice Phillips, sitting in Blankley v Central Manchester, said costs can be recovered on a £2.6m medical negligence claim where the claimant became incapacitated during proceedings.

The successful appeal followed a 2011 ruling made in favour of the defendant, who argued that the loss of mental capacity had the automatic and immediate effect of terminating their solicitor’s retainer.

The case is likely to set a precedent for claimants who lose mental capacity after 1 April 2013 but entered into a conditional fee agreement before that date.

The costs related to a case involving a claimant who had suffered brain damage following suction termination and laparoscopic sterilisation procedures at St Mary’s hospital in Manchester.

The claimant’s father, acting as her litigation friend, had in 2002 initially instructed north-west firm Linder Myers to pursue a claim of medical negligence.

However, having regained mental capacity in 2005, the claimant entered into a CFA and subsequently became incapacitated again in 2007.

Linder Myers submitted a successful application to the Court of Protection which granted it the authority to act on the client’s behalf as litigation friend and the firm successfully secured a settlement of £2.6m in 2010.

In his judgment, Mr Justice Phillips said both parties could have expected the client to lose mental capacity and that it would be an ‘unjust and unreasonable result to treat a retainer as terminated by reason of what may be a fleeting period of incapacity’.

Mark Walmsley, senior costs draftsman and head of costs management at Linder Myers, said: ‘This was a significant ruling which challenges previously held judgments that a solicitor’s retainer is automatically terminated if a client becomes incapacitated during proceedings.

‘In this particular case, the claimant had suffered significant brain injury as a result of medical negligence so it was reasonable to expect that there was a risk she would lose mental capacity after temporarily regaining it.’