Terms of Reference – 28.11.08
  1. Report
  2. Appendix 1 – responses to survey of PNLA members
The Professional Negligence Lawyers Association (‘PNLA’) was formed in 2004 after consultation with the Law Society, and its members were initially drawn from what is now the Legal Complaints Service Negligence Panel Referral Scheme.
The membership can be viewed on the PNLA web site currently showing 357 members. The profile of the members as to practice are varies. Most act for claimants in professional negligence and liability claims (including those involving dishonesty and fraud) and misconduct complaints. There are also members who have mixed practices, those who act for regulatory bodies and those who are panel firms for indemnity insurers.
At the heart of the motivation for forming the PNLA was to endeavour to improve the quality of claims handling. The need for this was subsequently highlighted by a report dated 7 February 2006 prepared by Eamon Mooney, then head of the Professional Indemnity Group of FOIL (copy report available on request). He spoke at the first PNLA conference and the view he submitted was largely an unflattering picture from indemnity insurers and panel firms of the quality of the claims put forward.
The PNLA has warmly welcomed members who support its objectives with practices acting for both claimants and defendants. The points made in this submission have been drafted stating the claimant perspective as the defendant position has in our view been set out clearly in the submissions by FOIL and we anticipate by other panel firms and insurers. We wish to make it clear that this submission is therefore not the views of the entire PNLA membership but the views of those who represent claimants.
The PNLA have worked towards improving the quality of the claims put forward in a number of ways. In particular, by organising approximately 5 conferences each year with speakers including experts and Counsel, largely drawn from the Professional Negligence Bar Association (“PNBA”). The seminars take place in London and the regions. The PNLA has also been very active in trying to get an Accredited Panel set up by the Law Society and subsequently through the Solicitors Regulation Authority. It is proposed to make similar representations to the Office for Legal Complaints.
This submission has been circulated in draft to the entire membership and interested parties and comments from members have been included in the report. We also refer to the survey carried out and responses included in Appendix 1.
Skills impact on costs
It appears from the terms of reference and the FOIL submission that the main consideration has been to attack the current costs system in particular as it affects claimant’s costs.
The PNLA have suggested repeatedly an alternative approach. If claimants are directed to solicitors and Counsel with skills on a level playing field with the defendants then there is scope to reduce costs whilst:-
  1. maintaining access to justice for the consumer; and
  2. promoting public confidence in the professions by having demonstrably fair procedures for proper redress.
Example (actual case with Manley Turnbull):-
An unsophisticated client instructs a conveyancing solicitor to sell their house and the solicitor, in breach of the Solicitors Accounts Rules and dishonestly, sends the proceeds of sale in the sum of some £99,000 to a dishonest financial adviser. Some monies were repaid and a detailed review of the finances of the claimant was carried out. A very detailed claim letter is prepared under the Professional Negligence Pre Action Protocol and this was backed up by disclosure of all the relevant documents and the witness statements. The claim made was for some £80,000 plus compound interest.
The insurer’s response has been to instruct panel solicitors who waited until the 4 months time limit was almost over to provide a response letter which included an admission for part of the monies. They refused to pay the admitted sum or to negotiate. Proceedings have been issued and a defence in the same terms as the response letter has been filed and served. A trial date is due to be listed shortly. No credible evidence to support the defence has been put forward and the claimant’s invitation to mediate as stated in the claim letter has not been accepted.
Impact on costs:-
  1. If the claim letter and documents, which were prepared essentially as for trial, had been reviewed and an alternative dispute resolution process agreed to by the defendant during the protocol period, the claim is very likely to have been settled and the costs of the claimant limited perhaps to around 30 hours of solicitors time and 2 days for Counsel with no significant disbursements.
  1. As it is, the claimant has costs of about 180 hours of time with some 3 days for Counsel with disbursements including Court fees and a much more substantial ATE premium (which is stepped and therefore increases as the case approaches trial).
On the information received from our members, this response to this case is not unusual – professional defendants regularly run strong claims close to trial and often only mediate after the trial date has been listed and directions complied with, leading to a settlement but with higher costs than necessary..
Neither the Woolf Reforms nor the improved claims preparation by claimant legal advisers has made sufficient impact on the procedures adopted by some insurers. We take the view that none of the discussed changes will improve things further whether by capping costs, costs shifting or restricting success fees if they only affect the amount of costs recoverable by claimants in this situation,.
It is worth noting that in the current economic climate, mortgage lenders are increasingly bringing claims against solicitors, valuers and other professionals. Funding arrangements offered include CFA and ATE insurance arrangements. It should be emphasised that some of these cases are being brought under discounted CFAs - therefore, it is not free as solicitors and/or counsel may still have to be paid - albeit a lesser amount - if the case is lost. Equally, there is cover for own counsel's fees where their fees are to be paid as a disbursement.
The PNLA have already made it known to insurers and mortgage lenders that they are able and willing to try to stream line claims handling processes and also to help to co ordinate resources and information in appropriate cases against mortgage fraudsters. The PNLA Lender Claims Group represents many mortgage lender panel firms and indeed we believe it is the first group which could provide a potential co ordinated response.

The PNLA have set up an ATE Scheme for use by its members for the benefit of clients, which is understood to be the first of its type ever set up for an association. The Judge insurance brokers assisted the PNLA and after a tender process the scheme is backed by both QBE and First Assist/Great Lakes. (Discussions and development of the scheme took some two years).
The scheme launched in 2008. The standard terms offer £125,000 of cover for opponent’s costs and own disbursements, including Counsel’s fees for both CFA and non CFA cases on the same terms. The premium is stepped by four stages depending upon at what stage the claim succeeds and is reduced if the opponent’s costs turn out to be substantially lower than this figure
It is understood that Lord Justice Jackson has submissions from brokers The Judge (Matt Amey and James Delaney) and the selected scheme insurers -  First Assist (Peter Smith) and QBE (Rocco Pirozzolo) (the latter to be lodged shortly).
It is worth mentioning four points:-
  1. the insurers require the ATE Scheme standard cover to be taken out for claims assessed at initially over 50% before the Protocol Claim letter is sent out. This means that for the future, defendants will have to pay some ATE premium for claims settled during the protocol process which may not typically have been obtained at that stage in the past.
  1. The scheme requires a 60% chance of success before issue of proceedings – PNLA members take this assessment very seriously and most will obtain a second opinion from Counsel before proceeding to this stage.
  1. In view of the “TAG” and “Son of TAG” claims by ATE insurers against solicitors for negligent assessments, claimants are going to incur costs to ensure their risk assessments at both stages can be supported before obtaining ATE Cover. The impact will be to reinforce the need for front loading of claimant’s costs, as already encouraged by the Woolf reforms and the introduction of the Pre Action Protocols.
  1. One major difference between the Legal Aid system and use of ATE Insurance (available for both CFA and non CFA cases) is that if a defendant wins the case then they can recover costs. There is therefore considerable emphasis in the areas of reform apparently being considered on the level of claimant costs, without necessarily giving any value to the advantage this gives to defendants and the risks undertaken to provide this to them. If a defendant considers that a claim should be defended and has a prospect of succeeding then it can do so in the knowledge that if they are right then they can recover their costs. On the other hand, if they are wrong and lose the case then there seems no good reason that they should not pay the costs incurred by the claimant.
Proportionality of costs and detailed assessment
We have used this section to set out in detail our views on the issues surrounding costs for bringing professional negligence and liability claims and to make a number of points both as to practice and principle.
Background – where do claims against professionals arise?
Bearing in mind the typical professional negligence claim – and this should include professional liability and fraud – this is a situation where a trusted professional has let a client down causing financial loss – perhaps with disastrous consequences. It is likely this has happened between a client and professional within a small community perhaps such as a golf club.
If a small claim – even perhaps £50,000 or less – is not pursued the impact on the professional within his local community could be disastrous. Loud criticism from the affected client could destroy his business. He will not be in a position to pay high indemnity insurance premiums if his fee income is reduced.
Current practice – the need for front loading of costs
Indemnity insurers are entitled to properly formulated claims. Historically, for solicitors under the Solicitors Indemnity Fund some scope was given to ‘read between the lines’ of claims in order to find a solution. For open market indemnity insurers they have seen largely no need to do this and will await events. If the claim is badly prepared, but perhaps rescued by say leading counsel before trial, then they will suffer the costs consequences. If not then the defendant may win the case.
Claimant advisers should in a position to prepare properly formulated claims even for small claims. Very few claimants – even mortgage lenders in the current market – can afford the legal fees required which properly represent the time that a solicitor needs to take to investigate a professional negligence claim, provide the required percentage chance of success to ATE insurers, obtain ATE Cover and a properly formulated and supported claim letter. One PNLA member comments: ‘I am running a case at present where the letter of claim alone ran to 47 pages (and I am sure that this is not uncommon)’
Expert evidence is required on quantum as appropriate. In non solicitor claims an experts report is asked for at this stage by indemnity insurers. Criticism has been levelled at claimants if such an experts report is not provided at this stage and indeed the claimant accused of providing a claim letter which is not compliant with the protocol.
On the information we have from members, in practice very few indemnity insurers appear to settle a claim after a protocol claim letter, even if the claim is strong and they have all the evidence. Not all insurers are the same – some are more willing to consider settlement and narrowing the issues at this stage than others. Some will simply wait and see whether the claimant feels strongly enough to issue or not, or indeed, has the funds to do so.
Risks to solicitors acting for claimants
Particular risks for CFA cases (including variants) – why success fees are justified
If a claimant solicitor is to take the risk of carrying out the investigation to gather sufficient evidence for a percentage chance of success to be given on the basis of a CFA then the current system of success fees is reasonable. It cannot be looked at on a case by case basis as the whole point is that claimant solicitors have to fund the investigations they write off from those they win.
Cash flow risks
Please see the section below on CFA cases. Even if a claim is successful the time it takes to obtain payment of damages and costs are a risk that a solicitor has to consider whether it can afford when taking such cases on.
Non CFA and CFA cases
Claimant’s solicitors who honestly record their time, whether the claim is CFA or not, ought to be paid in accordance with the time they have spent. There have been strong views expressed by PNLA members that they should, when acting for claimants, be able to know what they are going to be paid, in the same way that solicitors who charge hourly rates do in other areas of practice. There is perceived unfairness and indeed implicit challenge to their integrity if it is felt that their fees can be changed or brought into question for reasons they do not understand.
The current detailed assessment procedures broadly do allow for hourly rates as recorded to be recovered as long as the time has been reasonably incurred and indeed the assessment process is not designed to re-litigate the case. However any improvements which could simplify and shorten the existing procedure, whilst maintaining fairness, would be warmly welcomed.
The difficulty of non specialists acting for claimants
What if a solicitor who does a broad range of civil litigation work in a high street firm is approached by a member of the golf club from the next town with a small but strong claim?
This solicitor, if cautious, will understand that they will be against indemnity insurers with well resourced in-house teams of specialist professional indemnity lawyers and with large panel firms. Perhaps an experienced PNLA member/professional negligence specialist might take 15 hours to investigate this case and prepare a good claim letter – but this solicitor needs to take longer – perhaps they are unfamiliar with the law and have to consult a text book. They may take 25 hours to cover the same work.
If any generic costs rules are put in place, then to preserve fairness to claimants as consumers, there should be made available to them, solicitors who have the skills and training to bring a claim within any such costs rules economically. If this cannot be achieved, then the costs rules should maintain the scope to assess costs on a case by cases basis and for it to be accepted that some solicitors will take longer to do the same work than others, due to the wide divergence in skills.
It is perhaps worth noting that indemnity insurers and their panel firms have probably been able to standardise costs, as insurers can provide a steady volume of cases to their panel firms. There is currently no equivalent volume referral source for claimant work and therefore there is a far more diverse group of solicitors acting for claimants.
Public confidence
Some members of the PNLA regard with some scepticism the approach taken by the Government, LCS and the SRA that legal complaints are better dealt with where complainants are given no legal representation and are not referred to any solicitors with specialist skills (the LCS Negligence Panel Referral Scheme members are volunteers).
If consumers pay professionals for a service and the profession concerned publicly states that their insurers will defend claims vigorously, we are concerned as to the value of the service to the consumer.  If the professional provides a service with reasonable skill, care and honesty the client will receive value. If there is negligence, incompetence and even dishonesty/fraud the PNLA is concerned that these professions appear unmoved that consumers cannot find appropriately skilled legal advisers.
If the Courts support this approach by making restrictive costs rules, then this will only increase the damage to public confidence. Consumers might have to accept they may find it impossible – i.e. too expensive or risky - to bring a claim to get their money back at all.
The way to reduce costs is firstly for consumers to be referred to solicitors with appropriate skills and training and, secondly, for defendants and indemnity insurers to work together to streamline claims handling. The appendix to this report is referred to including examples of professional negligence claims where the claimant solicitors considers that the costs were far higher than they needed to be, due to the conduct of the defendant.
The PNLA invites Lord Justice Jackson to have regard to the following in the reforms he may propose:-
  1. that any changes do not prevent access to justice to claimants with strong claims with the benefit of legal representation;
  1. that any changes discourage defendants from running up claimants’ costs in strong claims and that such changes will promote early settlements..
In answer to the questions posed:-
i.         Proportionality - for the above reasons the PNLA does not think costs should be characterised as disproportionate if they exceed the damages awarded especially in small and modest claims;
ii.        Detailed assessment - each case should be looked at, as it is now, as to whether a claimant’s costs have been reasonably incurred. Any way to maintain fairness but to simplify and shorten the detailed assessment procedure would be warmly welcomed.
Note: Costs estimates provided at allocation stage do not appear to deter defendants or encourage settlements either in the action or detailed assessment proceedings which routinely follow a successful claim, but perhaps there could be more use made of the detailed estimates required at this stage.
Identifying cost centres and how to tackle them
In professional negligence and liability claims, insurers and panel firms require the claim to be presented comprehensively in the claim letter under the protocol otherwise they will simply provide a dismissive response and await proceedings being issued. This happens with some insurers and panel firms even if the claim letter is comprehensive.
Claimant solicitors therefore are under pressure from them and their ATE Insurers to prepare a claim as for trial at an early stage.
If insurers and panel firms were openly prepared to take a view on issues in a claim letter where some of the evidence had yet to be obtained, for example on a shorter form expert report, or without the benefit of further investigations into documentary or witness evidence, perhaps in an alternative dispute resolution process pre issue of proceedings, then this might well prevent proceedings being issued and reasonable settlements happening at an earlier stage.
The area for substantial costs potentially varies hugely in this type of claim on its particular facts. The central issue could be anything from expert evidence in dispute, witness evidence disclosure and quantum. Restricting costs on any procedural step is likely to be very difficult to apply in practice.
What would be of use is an earlier disclosure of defendant’s costs. This would potentially reduce the level of ATE cover obtained and the premiums payable.
Costs capping
The PNLA is not aware of widespread experience of costs capping in this area of practice. The points made above as to the variability of the stage where substantial costs could be incurred and also the wide diversity of skills and experience of solicitors in this area of practice who act for claimants make any standardised costs capping rules difficult to apply. The scope to cap is already available for a particular case if it is required.
Costs shifting
Professional negligence and liability claims generally are not a good example of a type of claim for costs shifting to be abolished. As stated previously, whilst defendants and their insurers appear to run up the costs of claims by refusing to have constructive settlement negotiations at an early stage, even in strong claims which have been well prepared, then the claimant’s costs are frequently a high proportion of the damages claimed.
The central problem is that the cost to defendants and their insurers is far lower when considering a claim presented to them than for the claimant to prepare the claim. The claimant has to anticipate any possible lines of defence in preparation and risk assessment of the claim. If costs shifting is abolished then, especially in small claims, it would risk most of the damages being payable in legal costs and the exercise being uneconomic. This would potentially deprive claimants of access to justice.
Conditional Fee Agreements
Many PNLA members offer CFA funding for claims. They are difficult claims against very skilled opponents and most PNLA members are either alone as ‘the team’ within their firm or have very much smaller teams than any of the insurers panel firms. Further, most do other areas of practice as well as professional negligence work, unlike the team for insurers and panel firms.
Taking on a CFA professional negligence/liability claim is a huge risk in terms of cash flow for a PNLA member to undertake. As one member put it ‘I stop sleeping once the work in progress on a file reaches £100,000’. Firms often restrict the number of CFA cases they will take on for this reason. Such cases can have a severe affect on cash flow – in particular under the current tax system the work in progress is taxable in the tax year during the tax year a settlement has been reached and at any time before the final accounts for that tax year have been finalised.
Having taken a view on the risk assessment and decided to run a claim on CFA, one of the huge benefits to the client is that the first step will be for the solicitor (and usually Counsel) to decide whether the claim has a 60% chance of success required for ATE insurers. The answer to this question is critical not only to the client but also to the solicitor who will have to justify the WIP to the members of his firm. His reputation will also depend upon the outcome of the claim as well as the client’s chances of redress.
It has become increasingly apparent from professional negligence claims against solicitors conducting litigation without CFA and without ATE cover (and this is available for non CFA cases) that clients are not routinely given this advice at an early stage.
The system of CFA and ATE cover have both contributed considerably to the enhanced service given by solicitors using them successfully. If Defendants choose not to take account of the evidence provided at an early stage they should be liable for the increased costs that will be incurred.
Commercial clients are more aware than previously of the process offered by solicitors using ATE cover and partial/discounted CFA and full CFA in addition to “normal” funding arrangements.
CFA’s are not therefore just about access to justice. They are also a very effective tool to ensure that solicitors and Counsel are encouraged at an early stage to consider the evidence and advise clients appropriately on the strength of the claim.
There is a perceived conflict of interest when acting on CFA. Under the PNLA ATE Scheme Counsel’s fees are a disbursement payable by ATE insurers if the case is lost and recoverable in the event of success. This enables and makes it reasonable to obtain Counsel’s advice on settlements to satisfy both the solicitor and client that any advice is being given without such a perceived conflict.
Hourly Rates
The PNLA’s only comment on this issue is that in this type of claim there appears to be no viable alternative which provides a fair and reasonable rate of pay for the work required to bring claims as things stand.
We hope that Lord Justice Jackson will find this contribution useful. Further information from the PNLA in respect of the ATE Scheme (The Judge can be contacted as brokers) and its members is available should it be required.
We shall be interested to see the responses from other claimant focussed organisations such as APIL on these issues. We anticipate that there will be considerable scope to identify steps which can be taken to improve claims handling.
We thank Lord Justice Jackson for allowing us to provide this response later than the deadline as a result of the Law Society not providing our details in relation to this consultation. Our association is the only one representing solicitors who act for claimants in this area of practice. We are sorry to have missed the Phase 1 meetings and look forward to taking part in the Phase 2.
Dated 20.2.09
Contact:  Katy Manley - PNLA Management Team Member
Manley Turnbull Solicitors
Tel:       01451 851 882   Email:  

A survey request was sent to all PNLA members on 13 February 2009 as follows:-
Year case settled -
Your firm – this has been omitted but is available as required
Type of case -
Stage of first indication of constructive negotiation:
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage?
What impact would this have had on your costs in money terms?
In the limited time available responses as follows have been received from member firms:-
Example A
Year case settled – late 2008
Type of case – Professional Negligence against Surveyor who allegedly missed subsidence (monitor pins in front wall)
Stage of first indication of constructive negotiation: after issue but before defence
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage? Certainly. Our problem was client’s own insurers had agreed to carry out remedial work costing approximately £8000. Client wanted damages for “stigma” of subsidence and her £1000 excess. Danger of small claims track and no costs. We made an early Part 36 of accepting £5000. Representative of Surveyor was Loss Adjuster who was himself a surveyor. He candidly admitted to me that the obstacle was their client whose excess was £5000. Further client’s own insurers instructed another surveyor/Loss Adjuster who in correspondence to client wrote “I am sure there is negligence here but do not recommend litigation as there is insufficient evidence”. He was very aggressive about this.
What impact would this have had on your costs in money terms? If Defendant had accepted our early offer of £5000 our costs and disbursements would not have exceeded £2000. As it was, we settled them at £17,500 for the same damages as our early offer.
Comment: as soon as Defendants instructed solicitors there was a marked change in attitude and a willingness to be realistic about settlement. By then costs had risen to £17.500!
Example B
Year case settled – ongoing
Type of case :- Solicitor negligence
Clients claim damages against former solicitor for failing to discover that house they purchased adjacent to a landfill site and feet away from flood plain. Planning permission had been obtained by seller. It would have revealed landfill and flood plain but clients had no intention to demolish and reconstruct as permission implied and so did not ask solicitor to obtain copy or seek a copy. Solicitor failed to carry out local search at all but insured against adverse entries
Stage of first indication of constructive negotiation: after issue and defence
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage? Insurer refused to pay out as landfill/flood plain outside scope of insured risks. Clients complained to their solicitor and then to SRA. SRA made recommendation for only £500 compensation. Clients tried to pursue claim through other solicitors and then personally but insurers rejected out of hand on basis they were authors of own misfortune (not obtaining copy of planning). Adverse Counsel’s Opinion also obtained by clients' previous solicitors.
Clients instruct present solicitors. Their Buildings and Contents insurers were Direct Line who agree to fund this action. So this is not a CFA case as it happens but it would have been but for Direct Line.
Pre action Protocol letter and then proceedings issued with a Report criticising failure to obtain local search as opposed to local search insurance and failure to obtain Environmental search. Single joint valuation shows loss around £65,000 to £70,000.
Defendant instruct solicitors who offer £25,000 and likely settlement between £25,000 and £70,000.
What impact would this have had on your costs in money terms This case is ongoing but approaching settlement. Costs are probably around £10,000 but frankly _*all costs *_have been caused by intransigent insurers.
Example C
Year case settled - ongoing
Type of case - solicitors arising out of the negligent drafting of a Will.
Stage of first indication of constructive negotiation: During protocol but see below
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Following the usual exchange of Protocol correspondence it was suggested that it would be sensible for there to be a “Without Prejudice” inter solicitor meeting to try and narrow the issues, and to see if there was any possibility of a negotiated settlement of the claim. I duly travelled up to Liverpool only to be told that the Defendant’s solicitors stood by everything that they had said in their letter of response, did not think the case had any merit and would not be making any settlement offer whatsoever. The meeting, therefore, served no useful purpose. Moreover, the Defendant’s attitude has left me with no alternative but to progress the claim through proceedings. This has meant an application for ATE insurance (the case is being run on a Conditional Fee basis). I have also had to obtain a supportive opinion from Counsel. All of this is now in place and proceedings are about to be issued. 
The insurance premium quoted is £55,000 plus IPT (albeit with rebates for early settlement).
Could case have been settled at an earlier stage? What impact would this have had on your costs in money terms?
This may, or may not, be a case which is fought all the way to trial. However, if we win it seems to me that it will ill behove the Defendant to complain about the level of costs since their attitude appears to be that they are facing no litigation risk even though the claim is supported by an experienced solicitor specialising in professional negligence claims, Counsel and of course risk averse ATE underwriters. We are being forced to issue proceedings, and the Defendant will have to accept the consequences of that.
Example D
Year case settled - three years ago, claim lost at trial
Type of case – solicitor’s negligence
I ran a fiercely contested professional negligence claim against solicitors all the way to trial. Unfortunately, the claim was unsuccessful. This meant that three years work (and over £75,000 in work in progress) was for nothing in terms of my firm’s investment in the case (although the client was able to have his day in Court, and make his allegations of negligence)
Stage of first indication of constructive negotiation:
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage?
What impact would this have had on your costs in money terms?
This is a case which indicates the need for success fees in this type of work. When we talk about “costs shifting” it seems to me that we need to bear in mind not just the issue of who pays the costs at the end of the case, but also the shifting of costs from the state sector (i.e. Public Funding) to the private sector (i.e. solicitors running cases on a Conditional Fee basis). 
Example E
Year case settled -  2006, defended all the way to trial and we were successful
Type of case - This was a claim against conveyancing solicitors arising out of the sale of a building plot at the bottom of a very long garden
Unfortunately, the Court only accepted our valuation evidence in part, which meant that after a four day trial the Claimant only obtained a judgment for some £16,000. Even if the Claimant had been wholly successful, the damages which would have been awarded would not have been in excess of £50,000. Despite this, the Defendant chose to defend the case all the way to trial. 
Stage of first indication of constructive negotiation: trial took place
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage?  What impact would this have had on your costs in money terms? Including costs and the judgment debt (and taking into account the fact that the Defendant had been partially successful in defending the claim) it was ultimately agreed that the Defendant would pay the Claimant the global sum of £95,000 in full and final settlement of all claims. The Defendant’s own costs were in the region of £45,000. It will be seen, therefore, that the total costs of the action (in which damages of around £16,000 were awarded) were around £120,000.
This is another example of how it is necessary for success fees to be claimable in order to make “costs shifting” from the State to Private Sector work (and thereby maintain access to justice). The costs recovered in this case went some way to subsidising the loss sustained in Example D when the claim was unsuccessful. It is also a good example of how the Defendant’s own conduct can lead to very substantial costs being run up in relatively low value claims. If the Defendants choose to defend such relatively low value claims all the way to trial then that is a matter for them. However, they must accept, and not complain about, the costs consequences which then flow from their own litigation decisions (although to be fair to them the Defendants in this case paid up without too much argument).
Example F
Year case settled - Ongoing
Type of case - the failure of the solicitors to put ATE cover in place
The Defendants and their insurers are not even responding to correspondence and are refusing to allow me access to the client’s file. I have, therefore, just prepared an application for pre-action disclosure which will result in substantial costs being incurred simply to get me to a stage whereby I can prepare the necessary letter of claim.
Stage of first indication of constructive negotiation: n/a
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage? n/a
What impact would this have had on your costs in money terms? n/a
Certainly the refusal of insurers and solicitors to provide the clients file at an early stage is a very good example of an area where claimants costs can be increased not only as to the costs of obtaining the file but potentially as the whole claim may need to be reassessed if the file is disclosed later in the proceedings.
Example G
Year case settled – August 2008
Type of case –
Defendants had refused to give proper protocol response or instruct Solicitors even after I sent them draft Particulars of Claim
Stage of first indication of constructive negotiation: after issue of proceedings
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage? What impact would this have had on your costs in money terms? They were playing chicken with my ability to get ATE. Got ATE, issued, solicitors instructed, case settled 25,000
With LCS jurisdiction only to 15,000victims of serious mistakes by solicitors will run out of money without proper funding arrangements.
Example H
Year case settled –  May 2007
Type of case –
Defendants had refused to give proper protocol response or instruct Solicitors even after I sent them draft Particulars of Claim
Stage of first indication of constructive negotiation: day before trial
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage? What impact would this have had on your costs in money terms? Defendant solicitors simply in denial. Settled 35,000.
Example I
Year case settled –  November 2008
Type of case – solicitor’s negligence
I was instructed in March 2008 and called other side to suggest an urgent discussion as there were mitigating circumstances involving lenders. I was advised that we needed to send a formal letter of claim. Counsel was instructed as the claim was factually complicated. The claim letter was sent in April 2008. A meeting was arranged in June 2008 but cancelled to July 2008. After pressing they provided a response letter the day before the meeting. At the meeting it was pointed out that the response letter was wrong and the meeting was adjourned. The claim settled in November 2008.
Stage of first indication of constructive negotiation: during protocol
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage? The claim could have settled after a constructive discussion in March.
What impact would this have had on your costs in money terms? Costs have been paid at £50,000 plus VAT and disbursements. In April my costs were £5,000 – 10,000 so there has been at least a five fold increase for no real reason.
This is an example of case where costs have increased as the defendant has failed to respond to a constructive invitation to negotiate at an early stage.
Example J
Year case settled –  ongoing
Type of case – solicitors negligence claim
Multi million pound claim against a central London firm and a 50 page draft particulars of claim was sent as a claim letter. 5 months later a response letter was received. This seemed wrong. An invitation to mediate was then received unprovoked which was agreed. They then made an extensive request for documents which were collated between September and December 2008. Some documentation was the subject of confidentiality agreements and we sought confidentiality agreements prior to disclosure. The limitation period is in March 2009. I have given a deadline of the end of February after which proceedings will be issued.
Stage of first indication of constructive negotiation:  protocol
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage? 2.5 months of correspondence and delay has taken place to obtain the agreement sought in December. It will be necessary to issue proceedings which might have been avoided if mediation had in fact taken place rather than procrastination
What impact would this have had on your costs in money terms? The costs of the last 2.5 months of correspondence could have been saved and potentially, had it settled at mediation, the costs of issuing proceedings.
Unnecessary costs have been incurred by prevarication.
Example K
Year case settled – ongoing
Type of case – failure of solicitor to account for client monies
I was instructed in April 2008 and a claim letter of about 4 pages was sent, setting out the client was owed £9000 and inviting a discussion if my calculations were thought to be wrong. A cheque for £2000 with no explanation was sent in response. I invoked the LCS conciliation procedure and this resulted in an offer of £5000 with no explanation and then this offer was changed to an offer of £5000 by installments. They said the file was sent to another firm, without the client’s consent, and is lost.
Stage of first indication of constructive negotiation: some movement in protocol
a. during protocol
b. after issue/defence
c. after trial listed and directions complied with
Could case have been settled at an earlier stage? This case could have been resolved after a constructive discussion as invited in the claim letter. Even after using the free LCS procedure, this has not provided any constructive response.
 What impact would this have had on your costs in money terms?. My costs are about £3000 currently but will substantially increase if proceedings need to be issued.
This case is an example of a type of case when the LCS conciliation service can be used. Even so, it has failed to produce a constructive response from the solicitors concerned. It is an example where all constructive attempts to resolve even a fast track claim have been rebuffed.
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