Is post-Jackson litigation the new conveyancing?

Conveyancing firms have been the natural and regular target for lenders and dissatisfied home-owners seeking to recover losses incurred as a result of the collapse of the residential housing market in 2008.

This has never manifested itself so clearly as in the recent renewal season for professional indemnity insurance where many conveyancing-dominated practices found insurers unwilling to provide cover.

Six years or so after the property crash, the general expectation is that we may have seen the worst of residential conveyancing claims. But are we about to enter a new era where claims against litigators increase from their historic, low levels to become as numerous as they have been in recent times against conveyancers?

Overly burdensome

The judicial guidance ahead of the inception of the Jackson reforms in April 2013 stressed the need to secure a fair distribution of court resources. Courts will no longer indulge parties who fail to comply with directions and the emphasis is undeniably on a less-tolerant approach to tardiness. The concern, however, is that the reforms are proving overly burdensome for some litigators, particularly those with busy, volume practices.

Although the courts have expressed awareness that they should not become so entrenched in their application of the CPR that they fail to serve the wider interests of justice (see Re Atrium Training Services Ltd and Connor Williams Ltd), numerous instances already exist of solicitors falling foul of Jackson LJ’s zeal.

Take the decision in Mitchell v News Group Newspapers Ltd earlier this month where the Court of Appeal emphasised ?the importance of meeting deadlines. Litigators now have very little room for manoeuvre.

Balancing act

The balance between the wider interests of justice and the appropriate allocation of limited court resources is now very much to the fore. But with a likelihood of costly satellite litigation whatever the outcome, should the courts not grant parties some flexibility? The irony is clear to see: the measures aimed at reducing the use of court time can now attract such strict sanctions that a single claim has the potential to incur twice as much attention from the court and then a follow-up negligence claim against the offending solicitors.

The alternative is, of course, to pursue settlement outside of the courtroom and so avoid the risk of default.

However, the Court of Appeal decision in PGF II SA v OMFS Co should be a lesson to those pursuing such a course of action. The appellant failed to respond to its opponent’s request to mediate. The appeal judges held that silence was itself unreasonable, regardless of the justification for not progressing to mediation. Costs sanctions followed, as, one may imagine, will criticism of the lawyers’ advice. It seems then that the only option for litigators is to adhere to deadlines. This applies especially to applications for extensions of time, and in particular, for service of the particulars of claim. In Venulum Property Investments Ltd v Space Architecture Ltd, the claimant made an application having been mistaken about the last date for service of the particulars. It was held that there was no room for human error and the extension was refused.

The existence of human error was, however, an influencing factor in Wyche v Careforce Group plc but as the consequences had been temporary and there had been no effect on the scheduled trial date, an application for relief from sanctions was granted. Post-Mitchell the result may have been different.

Appropriate funding model

The abolition of recovery of success fees and ATE premiums in CFA-funded litigation and the introduction of damages-based agreements (DBAs) also creates opportunity for claims. The risks here are clear.

For example, when the successful litigant sees a significant proportion of his winnings remaining in the hands of his lawyers, he may be inclined to question whether the advice given as to the funding model of his claim was appropriate.

On the face of it then, post-Jackson litigation could encourage a wave of claims in the same way that conveyancing has generated in the past.

While claims against litigators may dip once they become accustomed to the new, stricter regime, it is likely that litigation will become a riskier area of practice for as long as the courts show increased intolerance of failure to adhere to rules, as emphasised in Mitchell.

With the prospects of satellite litigation bearing down on existing claims, in the short term at least, the courts seem to be building a rod for their own back. The outcome of the ‘Plebgate’ saga may have as decisive an impact on litigators and their insurers as on the political and press communities.