Background
In September 2020, CXV (anonymised) urgently retained Aina Khan Law Limited (AKLL), a specialist family law firm, following the breakdown of her marriage. AKLL’s principal, Aina Khan OBE, noted from the outset that the client was “emotionally raw” and would need considerable support. Costs were a concern, and the parties agreed to regular cost reviews. Within weeks it became apparent that CXV’s mental state was deteriorating: by mid-October 2020 both Ms Khan and counsel had observed erratic, paranoid and delusional behaviour. The Family Court ordered a psychiatric assessment, and in December 2020 Dr Geoff Isaacs certified that CXV had lacked litigation capacity — due to amphetamine-induced paranoid psychosis — since August 2020, predating her very first instructions to AKLL.
CXV complained to the Legal Ombudsman in October 2021, raising five complaints. The ombudsman upheld two: that AKLL had charged excessive costs (complaint 2, £35,500 compensation) and that the firm had failed adequately to assess CXV’s litigation capacity from the point of instruction (complaint 1, £15,692.60 compensation), for a total award of £51,192.60. AKLL sought judicial review. A Deputy High Court Judge rejected most grounds but accepted that the ombudsman’s reasoning on the capacity complaint was irrational, and quashed that part of the award. The Legal Ombudsman appealed; AKLL’s cross-appeal on the costs award was refused permission.
The Court of Appeal (Coulson, Baker and Holgate LJJ) heard the appeal on 12 May 2026. The ombudsman argued that the High Court had read the decision in an excessively legalistic way, wrongly required it to apply the strict legal concept of “litigation capacity”, and erred in treating the compensation award as tainted. AKLL countered that the decision, if not quashed, would impose unreasonable obligations on solicitors dealing with mentally unwell family law clients.
The Court’s Holding
The Court of Appeal allowed the Legal Ombudsman’s appeal and restored the £15,692.60 compensation award. Holgate LJ, delivering the judgment, held that the High Court had applied an unduly onerous and legalistic standard when scrutinising the ombudsman’s decision. Ombudsman decisions must be read fairly and as a whole, with a degree of benevolence, and must not be construed as if they were statutes or judgments or subjected to pedantic exegesis. The scheme established by Part 6 of the Legal Services Act 2007 is inquisitorial and informal; its touchstone is what is “fair and reasonable in all the circumstances” — a deliberately broad standard that is for the ombudsman, not a court, to apply.
The Court found that the ombudsman had not purported to apply the strict legal test of mental incapacity under the Mental Capacity Act 2005. Rather, she had applied the Law Society’s own Guidance on “vulnerable clients” — which spans a spectrum from clients who need extra support through to those who lack capacity — and asked whether AKLL had provided a reasonable level of service. On the evidence, the ombudsman was rationally entitled to conclude that indicators of serious mental-health vulnerability were present from the very first meeting in September 2020, that AKLL’s own communications acknowledged the client was “deeply disturbed” and “erratic”, and that the firm should have taken steps earlier — such as involving a family member — to support CXV’s understanding and decision-making in what was a complex and costly set of proceedings.
The Court further rejected the High Court’s finding of process irrationality. The ombudsman’s reasoning logically supported her conclusion: she identified concrete early warning signs, noted that AKLL itself recognised them in retrospect, and linked the failure to address vulnerability from the outset to the detriment suffered by CXV. There was no logical gap that could ground a finding of irrationality in the Wednesbury sense.
Key Takeaways
- Ombudsman decisions under the Legal Services Act 2007 are to be read with benevolence and not subjected to the legalistic scrutiny appropriate for court judgments; the reviewing court asks only whether the decision falls outside the range of reasonable responses open to the decision-maker.
- The Legal Ombudsman is not required to apply the precise legal concept of “litigation capacity” under the Mental Capacity Act 2005; the ombudsman’s statutory mandate is to determine what is fair and reasonable, which may encompass the broader Law Society Guidance on vulnerable clients.
- Solicitors representing clients in high-stakes family proceedings must be alert to vulnerability indicators from the point of first instruction and consider early, low-cost protective steps — such as involving trusted family members — rather than waiting for a formal capacity assessment to be ordered by the court.
- An ombudsman is entitled to infer from a solicitor’s own subsequent admissions (e.g., that a client was “deeply disturbed” from the outset) that those facts were known at the relevant time, and to rely on them to ground a finding of inadequate service.
Why It Matters
This decision clarifies the limits of judicial review of Legal Ombudsman decisions and reinforces the principle that courts must not import the formality of adversarial litigation into the ombudsman’s intentionally swift and informal process. By restoring the award, the Court of Appeal signals that ombudsmen have genuine latitude to assess whether solicitors met an adequate standard of care for vulnerable clients — and that “fair and reasonable” includes, but is not limited to, compliance with the strict legal rules on mental capacity.
For family law practitioners, the case carries a practical warning: the Law Society’s Guidance on vulnerable clients creates real professional expectations. Where early signs of serious mental-health difficulties are present — even before a formal diagnosis — solicitors should document their assessment of the client’s vulnerability and actively explore supportive arrangements such as family involvement. Waiting for a court-ordered capacity assessment before taking protective steps may itself constitute an inadequate standard of service.