It’s time to teach performance managers in law firms about how a law firm works

The role of this additional layer of management in solicitor firms has increased in recent years. 

Many are decent, but the bulk of performance managers are still unable to truly assist fee earners.

What is the background of a typical performance manager? 

• failed solicitors/FILEXs;
• career paralegals wanting a management role;
• former liability or loss adjusters; and
• ex-insurance company employees, who tend to have instructed the firm in the past.

What are they expected to achieve? 

1. Compliance with Service Level Agreements
2. Shortened life cycle of claims
3. Maximise recoverability of damages (pence in the pound percentages)
4. Increase costs activity
5. Stupid things like monitoring departmental telephone statistics

How are they failing?

1. Interference – they ask too many questions and interrupt with enquiries This is time consuming, because their thirst for performance data is insatiable. Management information is typically non-billable.
2. Unnecessary meetings – this links to number 1, however the first example is generally more an ad hoc problem. The weekly and/or monthly meetings benefit the manager, but time credit does not go to the fee earners. If a department bills most people out between £100-200 per hour, it is easy to lose £1,000 of fees with these types of meetings.
3. Unqualified offering of legal advice – this is a case of a little knowledge being dangerous. It may be of benefit for them to offer some advice on strategy and tactics, to present risk to an opposing party, however their contribution towards legal matters is a Prof Neg claim waiting to happen.
4. Focussing on the wrong statistics – it is about getting as much cash in for the client and maximising your costs in doing so. The silly questions about time statistics, spreadsheets and reporting data can go and take a running jump.
5. Inability to support fee earners with hitting their individual targets – their goal is a departmental target. They need to hit £X hundred thousand or £Y million. They want to do this by hook or by crook. Their focus is upon low hanging fruit and living from 1 year to the next. It prevents them from buying into large litigation cases which may take 2-5 years to settle. The big picture is wasted on them.
6. Failure to understand funding – they generally lack the commercial sense to assess the appropriateness of CCFA’s, ATE funding, capped fee arrangements, CCFA-discounted rates, etc. One of our managers was looking into DBA’s at one point before an assistant solicitor took them to one side and had a quiet word!

How to solve the problem

• Training those without a legal background – make them sit with fee earners for a week and gain exposure to how the job is carried out. Talk through individual targets, the cases within the case load, and assess priorities. Get a feel for how work can be streamlined and organised. Try and help by making templates available and embrace technology.
• If the performance manager already has a legal background – make them redundant. Place them on a capability procedure. They failed as a fee earner, so let them fail as a performance manager.

Over and out.

Legal Orange.

Using Part 18 Requests to Create Doubt in your Opponent’s Mind

Part 18 Requests for Further Information or “Interrogatories” as they were in their former life, are great tools for disarming your opponent.

It appears that litigators are waiting until the claim has progressed a long way into Directions, before thinking about using Part 18.

It’s a wonderful tool! Let us take a look at what it allows you to do:

Part 18 

Under CPR rule 18.1, the court may at any time (my emphasis) order a party to clarify any matter which is in dispute in the proceedings or give additional information in relation to any such matter whether or not the matter is contained or referred to in a statement of case by filing and serving a response within the time specified by the court.

Why is CPR Part 18 so fantastic?

Because you can sow the seeds of doubt very early on. It is about creating the illusion of RISK to an opponent.  Risk = settlement.

It is important to remember the Part 18 Reply must be signed off by a statement of truth. You can therefore raise all sorts of questions that your opposing solicitor’s lay client will see.

The other side’s solicitor cannot merely bat it away and hide it from their client. This can give rise to questions from their client such as “oh, but what about…”, which is when the other side starts to feel they are on shaky foundations.

What else is so good about it?

Quite simply, there is a practice direction. Stick to it and you will be able to get an Order, if your opponent does not want to play ball.

1. Draft your questions and serve with a request for a response within 21 days. There is no minimum time period, but 14 days is a guideline minimum, with industry practice being around 21-28 days, depending on the information sought and breadth of the request.

2. If you are mischievous, serve a Part 36 offer with your Part 18 request. They may want to settle instead of answering your (calculated) questions.

3. If there is no response, make an application to the Court for an Unless Order.

4. You are likely to succeed if you have followed the practice direction. Plus costs, naturally.

Get your punches in early

If you ask for a lot of information, your opponent may just say in response: “this request is premature; the information will come out in [disclosure/witness evidence/expert evidence]”

Tough luck!  The other side will counter this with:

“if it will come out in any event, then we should do it now, in the interest of minimising costs”

Costs will rule the day. CPR r 1.1 will reign supreme.

Hints and tips

• If there is either a voluminous or pithy Particulars or Defence, you are better placed to get your Part 18 request.  A standard 4-5 page pleading is less likely to succeed. On extensive pleadings, you will claim that you require specificity to distinguish the “waffling”; for shorter pleadings you can aver that it lacks particularisation to prepare your position.

• Lead them towards introducing or conceding points; following which you can make an application to strike out some of their statement of case, or make them amend their pleadings.

• As the old title used to be, use it as an “interrogatory” – ask questions they do not want to answer. Focus upon how they are to deal with their weaknesses (e.g. request for details of previous incidents).

• Don’t try to use it as an effort to discredit a witness or ask for information that is not relevant to the key issues of the case.

• You can raise a question even if what it concerns it not in dispute. This has to be cutely phrased, and designed to enquire if something is or is not in agreement.

• A great time to make a Request is immediately following disclosure.

• Accompany your request with a short letter explaining why your client needs this information. This letter is for the benefit of the Court reading it at your application. It should never be to assist your opponent!

What is the “Golden Rule”?

Rarely ask a question that you want to be answered!

While in fraud cases, you may wish to gain useful information, in the majority of cases you will be looking to expose weaknesses in your opponent’s case, and letting them know you are going to make things very difficult for them.

Part 18 is seen at its best when you have reasonable grounds for suspecting that the other side is holding something back.

Over and out.

Legal Orange.

Signs that you have an underperforming employee

Sometimes the billing spreadsheets for the month/quarter/year will tell you who is performing, and identify those in the firm who are falling short of their targets.

You can frequently establish those likely to experience peaks and troughs based on their life events. For example, children and marriages.

Other fee earners, who are quieter about their out-of-work life, may need closer monitoring to assess whether their form is starting to drop.

The common characteristics of an underperforming fee earner include a combination of the following (as taken in isolation they are not immediately red flags):

• “Time dumping” on files – either through excessive time recording or stealing work from other fee earner’s files and passing it off as their own. This is typically during 3pm – 6pm, as they frantically try to make up time as their billable hours are down for the day.
• Absenteeism or presenteeism. Either is suspicious. Ignore those who turn up 5-10 mins late and work 10-30 mins beyond their contractual hours. These people are normal.
• Disappearances from their desk for “quiet rooms” or isolated areas in the office to work on files.
• They are constantly playing with their mobile phone; either texting, receiving calls or emailing.
• Requests for time off during the day, with empty promises to “make it up” at a later date.
• Requests for off-site network access to “work from home”, followed by a plethora of reasons for why they increasingly need to work from home.
• An unwillingness to issue proceedings or handle litigated files. This is particularly where they have not previous displayed a cautious approach.
• An over-reliance upon instructing Counsel.
• Constant referrals to co-workers to requests “clarification” on the law or strategy (i.e. asking questions and pretending like that was what they intended to do).
• Repeatedly delaying matters by asking their client for more and more information before they “are in a position to advise”.
• A new thirst for training, particularly when it is taken into account for time recording purposes.

Once these start to creep in, it is time to show them the door. While HR would have you sit down and put in place an action plan, the truth is if the person is 2-8 years PQ, then it is a sign they are dissatisfied about how they have not climbed the ladder like others have, and you need to get them out of your firm. If there is one person like this in your department, do not be concerned, as that is par for the course. If there is 2 or 3, however, then it may be a management failure which is to blame.

Over and out.

Legal Orange.

 

Defendants – how to lay banana skins for Claimants using Jackson & Mitchell

It’s only fair that Defendants can use Jackson and Mitchell to fight back against Claimants.

(1)    “Your statement of case is defective for the following reasons…”

This tactic can be advanced as either the pleadings being wholly defective, or requiring a small amendment. Either way, get them to incur the costs of amending their claim.

As a Defendant, you cannot change the pre-issue costs, however you can influence the Claimant by forcing them to increase their costs “of Issue”.

Look very closely at the Particulars of Claim. Cross-reference these with the black letter law and see if the Claimant has erred. If so, write to them placing them on notice of your intention to make an application to strike out all or (more likely) part of their statement of case. Proceed with the application if necessary and seek your costs.

This will either (1) result in the Claimant incurring costs of amending the Particulars of Claim, with a possible duplication of Counsel’s fee, or a notable amount of costs of amending and reporting to their client; or (2) allow you to obtain the costs of your application to strike out part, or all of, the Claimant’s claim.

 

(2)    “Your Reply to Defence introduces new pleadings that should be contained in your Particulars”

Do not fall for the argument that a Claimant may put forward, that you can make a further response by way of Rejoinder.

Insist that their Reply does not clarify an issue; if they have advanced a new pleading and used an extensive Reply, then make sure you force them to withdraw the Reply and amend their Particulars of Claim.

This will cause the Claimant to incur the costs of amending their Particulars (see Number 1 above), and you can also obtain your costs of amending your Defence. This will, again, increase the Claimant’s costs “of Issue”.

It may be that you have to make an application for the above, which I would suggest is made for hearing at the first CMC. 

 

(3)    “Your proposals for standard disclosure are excessive and unreasonably wide”

Take control of disclosure. If the Claimant’s disclosure report is for a standard dispute (i.e. not likely to have much electronic disclosure) then set out the requirements which are, in your view, reasonable for disclosure.

Have a w/p discussion and require your opponent to explain what documents they hold on their file of papers. There is a professional conduct requirement for the parties to adopt a collaborative approach in proceedings.  Impress upon the Claimant the need to identify what documents they currently hold, including the format in which they are held, and whether they need to incur any further work.

Consider the likelihood that the Claimant has front loaded. They are likely to have printed off all of the documents and collated a large number. The disclosure exercise should be conducted by a Grade C or D fee earner. The time to place these in a sensible format should be undertaken by support staff or a junior fee earner, with some time at Grade A or B rate to check the documents.

What you want to force is the position where the key documents are produced and listed in a short N265 document. The time dumping incurred by a Claimant is normally for peripheral documents, therefore unless you have good reason for suspecting that there will be attempts to hide detrimental documents, try and agree limited standard disclosure relevant to the key issues.

 

(4)    “Your proposed directions are agreed” or “Save for the slight amendment to XYZ, the proposed directions can be agreed”

Wherever possible, try and avoid the costs of a CMC.

Claimant’s build up the costs of CMC’s by incurring the costs of:

• Preparing the case summary
• Drafting the chronology
• Negotiating the bundle with the Defendant
• Collating the documents for the bundle
• Instructing Counsel to attend the CMC
• Plus other linked activities which increases costs

 

(5)    “We disagree with the Claimant’s Precedent H figures, assumptions and contingencies”

Get your punches in early, hard and low.

Your arguments will be:

•  The matter can be handled by a more junior fee earner
• (If Counsel is involved) then attack the need for supervision within the firm
• The time spent to date is excessive and disproportionate, therefore if the court fails to use the opportunity to limit the Claimant’s future costs then they are likely to become out of control
• The pre-issue costs are a guide to the Claimant’s time dumping on the file and symptomatic of the Claimant’s solicitors handling of the claim to date; the court cannot be seen to be allowing standards to slip
• The Claimant is making assumptions that the Defendant will make errors at every hurdle. (If you have not made any procedural errors to date, then state that there is no evidence to support this assumption and it is therefore unreasonable)
• The contingencies are wide ranging and merely applied to give the Claimant some leeway if they are capped on other stages of litigation.
• The expert fees are excessive (this is always true!)
• There is no evidence that the Claimant has sought quotes or estimates from Experts or Counsel. Unless the Claimant can produce some evidence that they have tendered for the most economic Expert or Counsel, then their figures should be challenged.
• Argue duplication.
• Attack unnecessary conferences with Counsel or Experts. Press for the use of telephone conferences if the court allows a conference.

If you succeed in reducing the Claimant’s budget by a substantial amount (say 25%+) then seek your costs of the hearing. This should particularly be the case if your own budget is upheld or only slightly reduced.

 

(6)    “You have failed to produce evidence of…”

Claimants will inevitably make mistakes. I have seen Claimants fail to include items such as invoices in their N265, which meant they could not produce documentary evidence in respect of quantum.

If something like this happens, look to strike out the claim. Get them struck out immediately – do not mess around with an Unless Order.

Hopefully by this point, the Claimant will just be looking to settle on best terms or willing to accept a drop hands. The trick is to make life as unpleasant as possible for them. Do not become purely reactive like too many Defendant solicitors appear to behave.

If you have only skimmed this article then take away the following:

(i)                Force Claimants to amend their statements of case;

(ii)              Seek your costs of responding to their amendments;

(iii)             Agree most things where possible and limit disclosure costs;

(iv)             Be aggressive at the Costs management conference; and

(v)              Go for strike out when the Claimant makes an error on disclosure (the biggest area) or drops a clanger on another   procedural point.

 

Over and out.

Legal Orange.

 

 

The 5 main problems with Costs Budgeting

Let’s take a look at the 5 main problems with Costs Budgeting:

1. It comes too early in proceedings

By the time it reaches the CMC, the claimant has frontloaded.  This kind of defeats the purpose as you are then in a position where the Judge has to try and limit their costs going forward. It may be that the claimant is oh-so-well prepared they just need to tinker with a few things, and they are ready for trial.

Naturally, the Claimant has the issue of having to predict the future, which is not without difficulty. Likewise, the defendant is also expected to predict the future, as well as putting into place a strategy to defend the claim.

Litigation is not an exact science. While some items can be reasonably predicted, such as witness statements or expert reports, other items may prove difficult with disclosure being a major issue.

Assumptions and contingencies are great, but they are impossible to predict accurately.

• If you are against an intransigent opponent, then you have to predict just how out of control their behaviour may become.
• If you come up against an angelic opponent, there is a risk they may suddenly turn into Lucifer the moment your budget has been set.

Overall, take away from Reason 1, it takes place too soon.

2. It deals with hypothetical figures

It is based on names, grades and certain predictions of time.  For example:

• What if a person leaves (or drops down dead) and cannot be replaced with an identical grade fee earner?
• What happens if your Barrister or Expert becomes conflicted out for whatever reason?
• What if the opponent drowns you in disclosure, in an underhand manner, but in a display of tactical masterclass?

Yes, you may seek to revise your budget, but really the changes to bring in costs budgeting were not designed to handle myriad variations to budgets.  The inability to use a deficit on one stage to balance a surplus on another stage may lead to parties being “cute” with their explanations of work.

3. It takes up a lot of court time

Case management conferences are generally unnecessary. They normally only require 30 minutes, and regularly only ask the Judge to rule on one or two issues. It is not uncommon for parties to outline to a Judge that 90% of directions are agreed, but the parties cannot agree expert evidence (e.g. Claimant wants 4, Defendant wants 2) and then need a ruling.

Cost and Case management conferences last approximately 90 minutes. The Court may have issues with the Wi-Fi and there is a lot of fiddling with laptops to amend MS Excel spreadsheets.

While it is nice to make the Judge wait for you to amend your figures (it gets them back for “please talk at the speed of my pen“), the time spent on this is substantial.  A number of courts have backlogs of cases.

The Judge is more likely to prioritise the pile of family cases, where he/she has to decide which parent will be awarded custody of a child. When they have to consider your case between 2 large companies, do not be surprised if they make clear they see it as a waste of their time.

I would estimate that about 1 in 200 cases used to make it to detailed assessment – with Costs Management Conference hearings it has now increased those figures as the costs there are subject to detailed assessment. Costs are taking up too much time. This is not a problem at the dedicated costs court, but these are not hearing the cases; these are taking place all across the country.  It is not a good use of court resources. 

4. You are dealing with the budgets of 2 sides – only one party will win

Ok, technically there can be multiple parties, but the bulk of claims are C v D.

All that time, and all that money… just to inevitably know that one side will win and the other side’s budget will prove to be completely and utterly irrelevant later on.  Is it worth it?

5. Proportionality – looking at what a party may recover and what a party will receive at the end

So you have prepared the budget…

The Court has scrutinised the budget…

You come out with an amended budget…

Your client succeeds at trial…

There are Part 36 consequences…

Proportionality then bites.  You may end up with a costs award that is very much out of kilter with the budget. The question then rears it head again: “Was it worth it?”

 

Lord Jackson, was it worth it?

Over and out.

Legal Orange.

 

 

Stop teasing LPC graduates with training contracts they will never receive

I conducted some more interviews recently for junior fee earners at our firm. They had all followed the same pathway in their CV:

-average to upper-quartile secondary school education;

-non-red brick university or lower end Russell Group university for LLB;

-non-red brick LPC provider; and

-worked in large firms for a couple of years.  

They also shared common reasons for wanting to leave their current employer:

1.They want a training contract;

2.Paralegal pay is providing them with little money to live and pay off student loans; and

3.They realised their firm had dangled a training contract in front of them for years, in order to retain their loyalty on low wages. It is now the right time to leave.  

My advice to them was straightforward. Whether they passed the interview or not, they needed to start looking after their own interests and control the pathway in front of them.

It is not difficult:

1.Sign up to CILEX. It’s cheap (circa £700ish). 

2. Apply for exemptions based on their LLB & LPC qualifications.

3. You’re now a graduate member of CILEX without sitting another exam. You have a professional qualification to add to your CV. You may even try to negotiate a pay rise on this basis.

4. Complete your qualifying employment requirement with CILEX which takes a couple of years. 

5. Apply to CILEX to become a fellow.

6.You are now a qualified FILEX.  This is a solid qualification and provides you with a lot of opportunities.

7. Practice as a FILEX and then apply to the SRA to become a solicitor based on your FILEX qualification, completing of the LPC and qualifying employment  

The pay grades are not particularly different between FILEXs and solicitors. It is a damn sight better than remaining on paralegal wages while awaiting a training contract that may never arrive.

I have discovered a number of large firms abusing people in their 20s with long working hours in exchange for poor remuneration and the POSSIBILITY of a training contract.

The more devious firms keep their paralegals applying for 2 or 3 rounds (i.e. 2 or 3 years), before they provide them with a traditional route or “sponsored” route training contract. This contract starts 2 years after they are informed of the successful application.  Of course, the TC lasts 2 years therafter. Consequently, it takes about 6-7 years from first starting as a paralegal to completion of the TC.  Then… on completion of the TC, there is no business need to retain the trainee and they are either let go, or offered to be kept on as a paralegal.  If they leave as an NQ, the firm has retained a cheap employee for 6-7 years and there is a fresh supply of graduates to step into the hole left behind.

 

The lesson to take away from this?

Firms – stop abusing paralegals.

Graduates – take ownership and control over your destiny

Over and out.

Legal Orange.

 

 

Why claimants cannot wait to abuse QOCS

Qualified One Way Costs shifting was said to be the death of claimant personal injury lawyers.

It may have been.

But… other civil litigators are lining up to profit.

What is QOCS?

Qualified One Way Costs Shifting was introduced by the Civil Procedure (Amendment) Rules 2013 and set out in CPR r 44.13 to CPR r 44.17.

The general principle is that for personal injury claims (including clinical negligence and claims on behalf of deceased persons) if the claim fails, you will not be required to pay the defendant’s costs.

It’s different because it removes the need to take out After-The-Event Insurance to offset the risk of litigation (i.e. paying the defendant’s costs).  The reasoning is that the ATE premium was so high, that by removing it, this results in effectively the same result for insurers.

This cannot be true, as previously you faced paying the ATE premium + costs.  Now you just face the claimant’s costs, and are unlikely to recover any of your own. i.e. you will still be paying out quite a lot of money.

One thing that has been overlooked by this is PI cases are VERY expert heavy. These disbursements are expensive and normally covered by ATE insurance in the event a claim does not succeed. The removal of ATE means the claimant will need to meet the costly expert fees if they lose.

So, does that mean you can run a PI claim to trial and avoid paying if you lose?

Effectively, the answer is yes.  While there is a costs order against the claimant still, QOCS affects enforceability.

The spanner in the works is you may be required to pay the defendant’s costs if:

• you lose interim applications;
• your conduct is poor or dishonest; and
• you fail to beat a Part 36 offer.

There is one pain in the backside that QOCS will not apply to PAD applications, but generally you can obtain no order as to costs, unless you have behaved like an idiot (CPR r 31.16 is not hard to follow).

It is possible to control the first 2 points; however the only factor to fear is failing to beat a part 36 offer.

Part 36 offers

Any claimant who succeeds at trial but fails to beat a defendant’s Part 36 offer will be ordered to pay all of the defendant’s costs from the date of expiry of the Part 36 offer.

The grey area in this? The Order is only enforceable without leave of the court up to the level of damages awarded by the court.

You will therefore have experienced an increase in early Part 36 offers. My defendant friends are telling me how they are paying in excess of their recommended calculation of damages just to provide a risk to the claimant of continuing with their claim.

Tell me about some of the areas which are unclear

(1)    Enforceability – this approach allows flexibility to the court. For instance, it could award some or all costs even against a claimant who beats a part 36 offer, based on their conduct (e.g. a refusal to mediate).

(2)    Discontinuance is not readily addressed under CPR r 38.6.  Say for example you are destined to lose and considering discontinuance after the pre-trial revew. What point is there in discontinuing when you can go through the trial and lose without having to pay costs?!!!  Although you may need to pay in mixed claims (e.g. injury and property/credit hire), pure PI claims are exempt.

(3)    It does not appear, at least to my small brain, that CRU has been properly considered when looking at CPR r 44.14. How does this come into the approach, when looking at offers and if the money has already been spent at the time of trial and the defendant succeeds?

(4)    CPR r 41.16 requires “fundamental dishonesty”. This needs better defining. Everybody understands fraud, but fundamental dishonesty is a very wide description. For example, does this include the phantom passenger(s) but the driver was genuinely injured?

So why do you assert claimants are waiting to abuse QOCS

The MOJ want to roll it out across civil litigation.

Now think about it in general civil litigation terms. Some worked examples may assist:

(1)    Basic contract claim – rises or falls based on UCTA, particularly B2B contracts – no expert is required and it comes down to contractual interpretation.

Why the hell not run it to trial?  It just needs pleadings, witness statements and disclosure. This is clearly not a dishonest claim and is a high risk to both sides. If the defendant fails to make any offers then the claimant should go through with their risky claim if QOCS applies.

(2)     Nuisance law claim – maybe even a GLO claim against a large manufacturer – obtain an expert report or two, secure witness evidence, go through disclosure and then move towards trial. Nuisance law is protean, and so long as an expert it on board, why the hell not run it to trial?  It can be another high risk claim ran in good faith.

(3)    Breach of a JCT contract worth millions. If no arbitration or adjudication clause then move it into litigation. Normally the risk is huge, but here, the claimant is able to offset the risk of defendant costs (and note that junior counsel fees for construction and engineering are VERY expensive). Why the hell not run it to trial? 

(4)    A person crashes their car into your wall while suffering from an illness. Potential automatism or inevitable accident defence available. The defendant will have the burden to prove their defence. Simply go towards trial and make the defendant positively prove their defence. If they succeed then they will still have to pay thousands to their medical expert and lawyers, whereas you walk away without paying a penny because you reasonably pursued a valid claim.

These are just some examples. Do the courts really want to see an avalanche of claims reaching trial because the claimant has little to lose?

I would run all of the above examples to trial if QOCS applied. I cannot say the same if my client was facing the defendant’s costs.

Other claimant solicitors will do the same. Fee earners will have a mixed caseload. One side of their caseload will be X% winnable claims; the other side will be Y% QOCS claims whereby they are high risk but do not meet the criteria of being fundamentally dishonest.  It will only increase the litigation as these would be run to trial, and most Part 36 offers will be accepted.

Mini prediction

The MOJ have underestimated the number of neighbour dispute claims (mainly boundary line disputes).

If these people discover they can pursue claims in good faith without having to pay the defendant’s costs, there will be some very disgruntled judge reporting back to the MOJ!

Over and out.

Legal Orange.

Mitchell-proofing your claim from the cradle to the grave

It’s not that difficult.

I recall at the time of the Fred Perry judgment, Lord Jackson gave an insight about the harder line approach he wanted to see employed by the judiciary.  I am not pro-Mitchell, but before it happened, I was keen to see an end to defendants getting away with too much freedom. It seemed that Unless Orders were only useful for getting a piece of paper to the top of an opponent’s pile of work.

Amusingly, post-Mitchell, it is now more difficult to achieve an Unless Order on paper. That is why it is easier to go for strike out without an Unless Order.

Enough musing and pussy footing around; how do we Mitchell-proof our claim?

Rule 1. FRONTLOAD your claim. I repeat – frontload your claim.

One more time for luck…

FRONTLOAD.

A costs budget can only interfere with the future costs. Those already incurred are practically untouchable in terms of getting a budget approved.

Rule 2. Follow this prescriptive approach:

• review papers and advise client
• place on funding
• draft a chronology
• obtain a proof of evidence from key witnesses
• draft a witness statement based on your evidence
• instruct an expert
• conference with expert if necessary (by telephone)
• letter of claim
• chase letter of claim
• application for pre-action disclosure if the defendant fails to admit liability and disclose relevant documents
• take stock of position (i.e. do you still think you will win?)
• advise client
• undertake further enquiries to capture evidence that relates to defendant’s denial of liability
• instruct counsel to settle particulars of claim and provide short advice
• further enquiries based on counsel’s advice on evidence and other matters you may have overlooked
• make Part 36 offer
• serve draft claim form, notice of funding and particulars of claim with Part 36 offer – invite settlement
• issue proceedings if not settled
• refuse extension of time to serve defence if the defendant has already investigated claim
• review defence and advise client
• brief conference with counsel and/or expert regarding defence
• prepare Reply to Defence or Part 18 request if necessary
• complete Directions Questionnaire
• agree directions with defendant that provides for 7 or 14 day extension on time to comply with a direction without the need to apply to the Court (see Gordon Exall’s blog for more on this)
• instruct in-house costs draftsman or external draftsman to prepare Precedent H schedule to be filed and served AT THE SAME TIME as the Directions Questionnaire
• complete the disclosure statement but don’t go nuts as the court doesn’t care about it and it simply ticks a box
• advise client and make a Calderbank or time limited offer along with a Part 36 offer for a different sum
• attend CMC and costs management hearing if court lists a hearing

Rule 3: State the obvious at the costs management hearing. The arguments are straightforward and there is little you can state that will be anything but “old arguments”.

Keep an eye on the standard points:

• over-reliance on counsel
• compare the fee earner grades for each party – unless it is A versus C, the court is unlikely to intervene
• highlight the number of leaver arch files of documents you need to go through to complete disclosure (tip: order smaller lever arch files from your stationary budget!)
• hourly rate of experts

Directions should be handed down by the Judge towards trial. These are unlikely to be controversial:

– disclosure

– inspection

– witness statements

– experts

– schedule of loss

– counter-schedule

– listing questionnaires

– pre-trial review

Rule 4. Work through directions.

This is not very difficult if you have conducted the claim in accordance with Rule 1.

How?

• You have the disclosure documents from your disclosure statement and enquiries from both you and counsel
• The proof of evidence has allowed you to draft an initial statement. Revise and update the statement to take into account the defendant’s response to letter of claim, their defence and disclosure documents.
• Instruct the expert – you have the disclosure documents, witness statements and a Court approved budget.
• Arrange for experts to meet and lodge joint statement.  Get your trainee to handle this easy step.
• Prepare schedule of loss. This will probably be assisted with the expert evidence and is quite frankly another easy document.
• Review counter-schedule.
• Instruct Counsel for evidence review and/or hold conference to discuss stategy and tactics going towards trial.

Rule 5. Make sure you have served copies of the Court Orders on everyone you can think of. This includes your client and expert. Badger the people you need to comply with the Order. Do not be afraid to harass your costs draftsman or expert as you control the payment of their invoice.

Rule 6. If your opponent makes a mistake then point it out. Take every procedural point that is humanly possible. If they are in breach, and you have agreed for Directions to have an extension of time up to X days, then send a draft application for strike out and threaten to make it if they remain in breach at the end of X days. Then make good on this threat as you will not require an Unless Order.

Rule 7. This is the MOST IMPORTANT RULE which is why it is typed in shouty uppercase.

All of the above is only possible if you have a manageable caseload. The problems with compliance tend to arise from fee earners operating at maximum capacity. Ensure you have enough fee earners and support staff at all times. Litigation takes priority. Anything pre-lit can wait.

While this is a management task, the fee earners should also take on the responsibility to manage their individual caseload. If you are struggling then tell your supervisor that you need to offload some files, or not take on any additional tasks.

Do not be afraid to produce a copy of the Mitchell transcript to your supervisor if you really must!

 

Over and out.

Legal Orange.

General Damages for Distress and Inconvenience – is it worth it for non-PI disputes?

Obviously, if you have suffered bodily injury, this may cause great distress and inconvenience. The adjustment to a life changing injury is huge and must be compensated.

This is not in dispute.

My gripe is clients who want to claim D+I and have only suffered nominal damage, say for example:

• a front wall partially demolished due to an RTA;
• water damage or internal cracking damage through subsidence which causes them to cancel a dinner party; or
• having to arrange for a tenant to be rehoused temporarily in a hotel room.

These people tend to want excessive sums of money for their inconvenience. I refuse to use the term “distress” as it really just means they had to endure minor inconvenience When you advise them about the nominal sums awarded by the courts for these types of claims, the typical response is disappointment. It is then followed up by a ridiculous story of “someone they know” who received a huge sum of money for their claim. These stories are always lacking in details, facts and remain unverified to this day.

Distress and inconvenience

The courts quite rightly treat these General Damages with the contempt they deserve. The rule of thumb is that you consent to having to experience some inconvenience in mitigating your loss. It’s called LIFE. 

And… life is not fair.

D+I – $how me the money £££

Unless you have been displaced from your family home and required to make major adaptations to your daily life, the court is unlikely to award you hundreds of pounds. The case law in this area generally provides that a person who is in alternative accommodation for a year will receive £1,000.

Examples

I have seen cases within my previous firm where courts have awarded the following amounts for D+I:

• £25 for being unable to use a garage for a couple of months
• £50 for a particularly intransigent defendant to reflect their conduct during litigation
• £200 for a family that was placed in alternative accommodation for months after a fire and had to drive an extra 25-30 mins per day to take their children to school.

These sums are not outliers and fall generally within the range one would expect to see.

D+I – is it worth it for non PI claims?

Not particularly. While you need to advise the client, it is important to really stress that the English courts do not award large sums for D+I.  Life is unfair, and judges will see through your first world problems, of having to put up with a bit of a pain in the backside every now and again.  The difficulty is that the ombudsman seems to have a very stupid different view of D+I and the typical awards that should be made.

The truth is, the amount for D+I comes down:

• the extent of how life changing it has been;
• the period of time you have had to endure the D+I;
• case law in the area; and
• whichever side of bed the Judge woke up that morning.

If D+I is potentially holding up a settlement then remind your client of those 4 very important words: “it is worth it?”

 

Over and out.
Legal Orange.

The next big thing in professional negligence claims

It’s always a risk to make a prediction in writing, simply for the fact it can be used against you in the event you are wrong.

That is why my prediction will take 2-5 years before the trend will emerge.

What do you predict?

An increase in professional negligence claims against lawyers for under-settling claims.

Give me some actual details…

This will be for the head of loss relating to pensions.

Pray tell me more.

With the mandatory enrolment into a workplace pension scheme, people that are forced into “early retirement” through an accident (“accident” being caused by a third party for breach of statutory duty and/or negligence and/or [insert every other basis of claim]) will have a very good opportunity to include loss of pension income.

How?

The auto-enrolment scheme has been brought into force with a prescribed scheme. This provides the clarity needed. Before this came about it was difficult to establish that a person was scheduled to pay into a pension scheme and then receive a benefit at the end of their working life.

A particularly youthful claimant, who was yet to pay into a pension pot, found themselves having to prove their credibility when it came to paying into a pension scheme. This was not simply a person at school who “dreamt of becoming a police officer” or other lucrative final pension scheme career. It included people in the 22-30 year old category who worked but had not formally entered into a scheme; mainly because they had a lot of time on their side. It was a matter they simply had failed to get round to sorting out.

In your 20’s there are a lot more interesting things to do at weekends than meet a financial advisor to plan your future.

What has changed?

Companies now have pension schemes which are administered through a provider. These involve physical documents detailing percentages, amounts and tangible details such as anticipated returns.

It therefore provides a claimant with the document trail to instruct their expert witness. I would imagine this to be a forensic accountant, but I am happy to be corrected. This expert can then outline the predicted return, and provide a range of figures that take into account the factors which may affect the pensions market.

I am, of course, not an expert. That said, I reasonably hazard a guess that the expert would report something like:

• Mr. X was enrolled on pension scheme Y, which is administered by Z.
• Z is a large pensions provider with [number] years of experience in the market.
• A copy of the pension scheme of Z is exhibited to my report at appendix 1.
• Mr. X paid in £[amount] per month which equated to [number]% of his salary.
• He had been employed by his company for [number] years before his injury.
• The pensions scheme required Mr. X to contribute £[amount]/[number]% for [number] years until his scheduled retirement at [age]
• At the time of his injury, Mr. X’s pension pot was calculated as £[amount].
• Based on [insert factors affecting pension pot], I consider Mr. X would have received a final pension total of £[amount]. I am willing to consider, based on [insert key factors that are more volatile or susceptible to variation], the range of figures comprising his final pension to be between £[amount] and £[amount].
• The difference between Mr. X’s contributions at the time of his injury and the final figure is £[amount].

What next?

Subject to the claim being settled in the normal way, Mr. X would receive a sum of money in settlement for his loss of pension. This would be the amount he would have received but for the incident that caused his injuries and caused him a loss of earnings and other heads of loss.

Where will the negligence come from?

Simply put, it will be caused by claimant’s solicitors failing to identify a high value claim.

If Mr. X has suffered an injury, a firm may only focus on the actual losses and fail to give due consideration to the future losses in the correct manner.

The Claimant’s solicitor may include the normal JSB injury amount, time off work, loss of amenity, adjustments, etc.  The pensions aspect may be overlooked. The focus will be upon how much their salary is, rather than looking at the package of benefits provided by their employer.

Are we talking about under settlement of claims for notable amounts of money, or chicken feed?

These pension schemes arranged for by the government will rise incrementally.

There will be matching of a percentage and I imagine that a large number of firms will have a matching contribution of 3% with the employee contributing 3%. This make a 6% pension.

While this may not seem to be much, it is important to look at the big picture.

6% pension contribution on a salary of a £25,000 salary may not be a lot of money at face value, but looking beyond a cursory glance there is a lot more to it.

Worked example:

• 25 year old on £25,000 a year
• They planned on retiring at 65
• 3% was contributed by the employee and 3% contributed by their employer
• Assumption that the pension fund would keep pace with inflation
• This provides a monthly pension of £230.00 based on today’s prices.

This now gives you a pension loss of £2,760.00 per year.

Now think about what happens if there has been a shortened life expectancy as a result of the injury?

That’s right, the number will be multiplied. The small amount of £2,760.00 suddenly becomes a much larger figure.

Stretch your imagination further and what happens if your client is contributing more, or earns considerably more?  We are now talking about a lot of money.

How can we avoid professional negligence claims for this?

Simply put, this comes down to management and supervision.

Include within your introduction letter to the client a separate category relating to pensions. Insist that you are provided with a copy of the policy. If they cannot produce a copy it still falls under your responsibility!!!

Obtain a signed mandate for disclosure of the policy and spend time tracking it down. Their employer may point you in the right direction, otherwise they may be lucky enough to have a pensions broker.

If you do not feel comfortable interpreting the policy and calculating the potential losses, make sure you instruct an expert.  A desktop report is unlikely to be very expensive. It will be a valid disbursement and help to protect you from a professional negligence claim in the future.

Over and out.

Legal Orange.