Excuse Me Sir, is this Your House?

This is a tale that shows what happens when legislation is passed in a hurry, without thinking things through, and the potential mess that can result. It also shows how judges can use common sense and legal ingenuity to remedy things, or at any rate limit the damage. These aspects have wider implications in these times of the restriction of Legal Aid and the Jackson changes to the Civil Procedure Rules that spawned the Mitchell case and all the procedural problems that have flowed from that. Perhaps I will expand on those on another occasion.

However, the story for today concerns Mr Best the builder, and the case is Best v Chief Land Registrar [2014] EWHC 1370 (Admin).  Mr Best was working on a property nearby in 1997 when he noticed 35 Church Road, Newbury Park, which was derelict and appeared to have been abandoned. The neighbours told him that the old lady who owned it had died and that her family don’t seem to be doing anything about it. So, no doubt with an eye on a potential profit, he secured it, repaired the roof, and over the years worked on the property when he had time, eventually moving in himself January 2012.

Now once upon a time there was a 12 year limitation period for land, and once you had occupied it for 12 years it was yours. But under the Land Registration Act 2002 there is now a two-stage process for registered land – you register an interest with HM Land Registry after 10 years adverse occupation, HMLR send formal notice to the registered owner, and if they don’t object you get registered as the owner, and their titles is extinguished. But if they do object then unless you can show estoppel, or other legal reasons, or it is a boundary dispute, then you will lose and they can evict you, and almost certainly will.

Now whether Mr Best wanted to recoup his investment, or wanted to live in the house that he had brought back from the dead I can’t say, as the report is silent on this point. However he asked HMLR to set the wheels in motion, and hit a snag. The Chief Land Registrar refused to send out the notice on the grounds that Mr Best had been committing a criminal offence by living in a residential property as a trespasser since s144 LASPO 2012 came into effect on 1st September 2012. The Registrar considered that you couldn’t acquire adverse possession for good public policy grounds, and besides the High Court had decided this in the case of R (Smith) v Land Registry [2009] EWHC 328.

Smith was about a man who claimed to have acquired a bit of a public highway from Cambridge CC by storing cars and other things on it for many years. HHJ Pelling QC, sitting in the High Court, said that he couldn’t, for three reasons:

  • it was a criminal offence under s137 Highways Act 1980 to obstruct the public highway and you couldn’t get rights by committing criminal offences as a matter of public policy;
  • there was a long series of cases to show that you couldn’t get adverse possession of a public highway except perhaps in really exceptional circumstances;and
  • if it was possible to get possessory title then it would be subject to the public rights of way anyway as you cannot extinguish them by adverse possession.

This decision was upheld by the CA mainly on the last two of these grounds.

Nothing daunted, Mr Best’s counsel argued that there was a world of difference between the Highways Act, backed up by a long history of the inalienability of highways, and s144 LASPO, which was a section tacked on to a totally different statute (the Legal Aid, Sentencing and Punishment of Offenders Act 2012) and which merely imposed a criminal liability on certain conduct, and didn’t set out to regulate the whole of the acquisition of title by adverse possession. Furthermore, even the paper owner of land couldn’t obstruct the highway that passed over it, or allow others to do so save by exercising powers under certain legislation for certain limited times and purposes. That did not mean however that all unlawful acts would prevent prescriptive rights being acquired.

Take the case of Bakewell Management v Brandwood [2004] UKHL 14. Here the HL dealt with the awkward problem that had built up following an earlier case of Hanning v Top Deck Travel. This held that as there was a prohibition in s 193 Law of Property Act 1925 to driving on a common without lawful authority it was impossible to acquire a right to do so by prescription, even by more than 20 years’ use. Freeholders took advantage of this by claiming large sums for vehicular access to large houses on commons all over the country. In Bakewell the HL held that prescription had no problem with people acting unlawfully ie tortiously. That is what it meant – doing things without a legal right for long enough. And as s193 allowed a landowner to grant authority, the mere fact that there was a criminal offence involved didn’t make that much difference. The landowner might have granted permission in a lost recent grant – the normal legal fiction for a prescriptive right being that the owner had granted the right recently but the document had been lost. This couldn’t happen with an obstruction of a public highway (as in Smith). And it showed that a mere criminal offence was not enough.

In Best’s case Ouseley J looked at the complicated and clearly fully-considered scheme for dealing with prescriptive rights dealt with by the LRA 2002 and contrasted it with the perfunctory and clearly bolt-on offence created by s144 LASPO 2012. He decided that s144 created a new offence to deal with a short-term problem of people squatting in residential premises, so as to enable the police to deal with them more easily, rather than alter the law relating to prescriptive rights as a whole.

[As a sideline, many lawyers protested about the pointlessness of the s144 legislation, covering as it does many actions  that are already offences under s7 Criminal Law Act 1977 and elsewhere and I covered this in a piece at the time.]

The 2012 offence only deals with squatters who enter as trespassers  on residential buildings and live there or intend to do so. It doesn’t cover gardens, sheds garages etc, or living in offices or factories, or occupying a residence but not living there – eg using as a workshop or concert venue. So it is very restricted. And it makes no distinction between people who have just entered and people who have been there for 30 years – any residential occupation after 1st September 2012 is an offence. It is a very blunt tool.

Ouseley J concludes after going through the authorities, and pointing out the the trespass remained a crime that could be the subject of prosecution if appropriate, in para 86

Parliament should be taken to have thought that the public policy advantages of adverse possession at common law meant that the mere fact that the adverse possession was based on criminal trespass did not and should not preclude a successful claim to adverse possession. Before any claim could arise in reliance on adverse possession, ten or twelve years of adverse possession would have had to pass without effective action by owner or by an enforcement authority, whether in civil or criminal proceedings. If that were the position, title could be extinguished or a change in owner registered (if the statutory processes were completed satisfactorily), without any public interest being engaged, unless particular circumstances meant that adverse possession should not of itself be a sufficient basis for an extinguishment of or transfer of title. Those circumstances are not where the trespass was a crime, but where the land in respect of which adverse possession was claimed was itself subject to rights which could not be extinguished, as with a highway, or was land of which a landowner/statutory undertaker could not be dispossessed because of the statutory provisions under which it held the land, in effect making the land inalienable or title inextinguishable, or creating preconditions for title transfer which were unmet by adverse possession alone. That would cover at least a number of situations in which trespass would be a criminal offence but it would not involve focussing on the fact of crime, rather it would involve focussing on whether extinguishment or transfer of title as a result of adverse possession was appropriate in the public interest in respect of that land.

He held that the Chief Land Registrar was wrong and that Mr Best did qualify for 10 years adverse possession and was entitled to invoke the procedure under Sch 6 LRA.

So Parliament has not abolished the concept of adverse possession to dwellings by accident, while leaving it in being for the gardens and garages, and for offices and factories. It remains as it always has, and s144 is just an offence that the police can invoke on trespassers if they want to do so. Anecdotal evidence is that they are no keener to use their powers under s144 than they were to use their similar powers under s7 Criminal Law Act 1977. But only because the Land Registry needed to know the position and was prepared to take the case to a High Court Judge to get a decision. And because Ouseley J worked his way carefully through things to get the right result, with the aid of Philip Rainey QC for Mr Best.

Whether Mr Best wins in the end is open to more doubt. There has been a lot of publicity as a result of the court case, and the house is apparently worth £375,000 or so. If the true owner comes forward his argument may all have been in vain. And I suspect that the fact that he has clarified the law for the rest of us will be very little comfort to him.

There is a fuller legal coverage of Best in the excellent Nearly Legal blog here.

PS I ought to also mention Jonathan Karas QC for the Registrar


UPDATE  – for news on an appeal to the CA in Best see here.


Having Rights is Not Enough

Let me tell you a story. You are walking down a dark lane carrying a box containing a nice watch that you have just bought from a jewellers. A thug comes up to you, threatens you with a knife, and demands that you give it to them. You tell them “it’s mine, I’ve just bought it”. They say that they don’t care, and as you aren’t a mad hero you hand it over and they run off. Your legal rights have been completely worthless on their own. What you needed was a pet leopard, one of those Crocodile Dundee “you call that a knife? This is what I call a knife” blades, or a small troop of cavalry. In other words, you need to have your rights enforced by force if necessary.

Let’s change the facts a bit. You get home safely but the next morning a man from the jewellers comes to say that there has been a mistake and that the watch had been reserved by Mr Big, a local gangster,  and so they shouldn’t have sold it to you and that you would have to give it back. You refuse. They sue you in the local court where the judge is Mr Big’s brother, and despite there being no legal basis for their claim you lose. Again, your legal rights have been completely worthless on their own. You need an honest legal system to enforce the rights.

Let’s change things again. You are sitting at home and admiring your property. A developer calls and gives you a formal claim to buy the house under an option that he said had been granted to him by a previous owner. The price to be paid is a fraction of the true value. You don’t believe the option is genuine (you don’t think it likely that the house once belonged to a “Mr Michael Mouse” of Hollywood) and go to a lawyer. The lawyer explains that under recent legal reforms it is necessary to carry out an enormous amount of work in the early stages of a case, (see here) and so you will need to pay him £25,000 immediately, and that the total cost of the case will be £50k-£100k, or possibly more, of which you may recover half if you win. You don’t have that sort of money, but the developer does. You can’t fight the case on your own and so have to negotiate a poor deal. So your legal rights have been completely worthless on their own. You have to be able to afford to enforce them.

One final scenario. Your local council decide to retrospectively revoke the planning permission on your house and demand that it is demolished without compensation because there was an error in the initial planning application made by the the original owner. This is said to be permissible under recent legislation passed to tighten up planning procedure. You try to find a lawyer to advise you on this complicated matter, but find that under the legislation lawyers are not allowed to advise or represent parties. You try to look up the legal background but it is beyond your limited education and skill. So you never know what your legal rights are, let alone how to enforce them. Your legal rights have been completely worthless on their own. You need access to legal advice when necessary.

These are just stories, as I said at the beginning. But the lessons are very real. Legal rights are only any good if they can be enforced for a sensible price and in a sensible period of time by the people who have them, and for this purpose they need affordable legal advice and an affordable and fair legal system. Of course some matters are best dealt with by a small claims system where people argue cases themselves, and some things are best dealt with by ombudsmen and the like. But there must be an effective system if the rule of law is to mean anything. And recent developments, with small claims now running up to £10,000, vastly increased work needed for fairly ordinary civil cases, draconian penalties if anything goes even slightly wrong, the abolition of Legal Aid, greatly increased court fees, large issue and trial fees for employment claims, and the loss of so many local solicitors who gave advice to local people, make me very concerned.

Because if you can’t enforce your rights you’ve lost them.

Spencer v Taylor – Good News for Landlords

Spencer v Taylor [2013]EWCA Civ 1600

This piece is a bit late, as the judgement was given before Christmas. But I’ve been busy, and there has been a lot of Mitchell-related nonsense going on.

We need to go back a bit. In the old days, before the new legislation there was very little private rented accommodation about, because the rents were controlled and it was virtually impossible to get tenants out even if they weren’t paying the rent. Then the new assured tenancies arrived and rent controls were relaxed, and it became possible to recover possession if there was a good reason, especially if the rent got seriously into arrears.

But landlords were still reluctant to commit themselves to possibly a lifetime of commitment, if their idea of a good reason differed from the judge’s. The mandatory orders under Ground 8 for tenants who were 2 months in arrears of rent were a start. However, what they wanted was the certainty of getting the property back if they wanted to. And this was where s 21 Housing Act 1988 came in. Because if a landlord served a s 21 notice and got the procedure right the Judge would have to make an order for possession in 14 days (or no later than 6  weeks if there would otherwise be serious hardship). There was no discretion.

And there was no fancy form of notice – they just had to give 2 months’ notice in writing.

Well, as you might imagine, landlords liked this, and the supply of properties to let increased rapidly. Perhaps I ought to say before you complain, that I realise that there were no doubt other reasons for this as well – the difficulties in getting a mortgage and the reductions in benefits and the economy generally for a start.

However, things are never simple. s 21 was drafted when ASTs were in their infancy and the draughtsmen didn’t realise that virtually all ASTs would run for 6 months as a fixed term, and then run on as periodic normally monthly tenancies thereafter. It would appear that they expected them to be either entirely fixed term, being brought to a prompt end at the end of the term, or to be periodic from the outset. And in the neat way that draughtsmen have they gave two forms of notice that had to be given – one for fixed terms and one for periodic terms.

The fixed term notice has given no difficulty. What is needed under s 21(1) is

  • a notice in writing signed by the landlord (or at least one of joint landlords)
  • requiring possession in not less than 2 months
  • expiring after the end of the fixed term

Hard to go wrong here, provided you can prove that the notice was actually given. The periodic notice however was much more complicated in practice. Under s 21(4) you needed

  • a notice in writing signed by the landlord (or at least one of joint landlords)
  • stating that after a date given possession is required under this section
  • the date must be at least 2 months after service
  • and must be the last day of a period of the tenancy
  • and must be no earlier than the earliest that the tenancy could have been brought to an end by a Notice to Quit if these were not invalidated by s 5(1). [in practice this wasn’t a problem as this was almost always less then 2 months].

The problem was getting the day right. A monthly tenancy starting on the 5th ends on the 4th of the next month and it’s the 4th that you have to give, or it’s invalid. Lots of scope for getting it wrong, and having to start again, even, sometimes,  if you had a saving clause. And as almost every AST was terminated when it was a periodic tenancy the established wisdom was that you had to use this form. So it mattered.

But no more. Lewison LJ in the Court of Appeal (who was an eminent landlord and tenant counsel in his day) decided to cut through the wreckage and simplify things. He noticed that s 21(1) applied

on or after the coming to an end of an assured shorthold tenancy which was a fixed term tenancy

Now this tenancy had been a fixed term tenancy at the outset, in 2006, but had been periodic ever since the initial 6 months expired. The notice that had been served in 2011 was the s21(4) periodic one and it was arguable that the date selected was incorrect (the saving clause was not as clear as it should be). So the parties went to the CA presumably expecting to argue about the saving clause. And Lewison LJ decided that even if it was an invalid s 21 (4) notice it was a perfectly valid s 21(1) notice. It ticked all the boxes – it was signed, required possession in not less than 2 months, and it expired after the end of the fixed term. So all the arguments about s 21(4) just didn’t matter. And the famous 2003 CA decision of Fernandez v McDonald , which said that the correct date was vital, was strictly speaking irrelevant as the court only dealt with a s 21(4) notice.

For completeness I ought to say that Lewison LJ went on to find that the notice would have been valid under s 21(4) as well, but that is beside the point. Because NOBODY IS GOING TO USE s 21(4) NOTICES AGAIN.

You don’t need to. Unless your AST has NEVER been a fixed one, which is extremely unusual, and indeed this is another reason to avoid that arrangement, s 21(1) notices may be used in every case. Because the CA have said so in Spencer v Taylor. They are just so much easier. And although I will for one be unhappy to see s 21(4) go as it has been good to me in producing reasons to be given work by landlords, opportunities of earning fees in sorting out messes that landlords (and some non-specialist lawyers) have got into, and unexpected get-out-of-jail-free cards for my tenant clients, it must be for the best.

However, if you are a landlord, or acting for a landlord, do remember that before serving any sort of s 21 notice you have to be sure that any deposit has been properly protected, the appropriate notices etc served, and re-served as required by Superstrike v Rodrigues   (& see my further comments here) after the fixed period has expired. Or any s 21 notice is invalid and you’re in trouble.


I have just heard that the tenant has applied for permission to appeal to the Supreme Court, so things are still in the air. Anthony Gold are representing the landlord and have more info here. So until this is finally decided it is best to continue using the s 21(4) notice if the notice is served after the fixed term has expired (the “established wisdom” referred to above) just in case the SC don’t agree with Lewison LJ. Which will be a pity.

PS – Leave to appeal refused 24th July 2014. See my note. So the useful decision stands.

Tell me what you want, what you really, really want…

One evening last week, when I wasn’t lawyering or writing these pieces, I went to the opera. In fact I’d been given a couple of tickets by our daughter and went with Mrs CM. The production was the new Royal Opera House Don Giovanni by Mozart, and it was very good indeed. But we didn’t go to the ROH to see it – our daughter is just starting her career in the North and doesn’t have that sort of money. We went to a local cinema and sat in the red plush seats and watched a live streaming of that night’s performance. So we had a 20 minute journey, as good acoustics and better views than we would have had in London, and all for a fraction of the price. We did lose the ambience a bit, there were no G & Ts in the interval, Mrs CM wasn’t able to give her coronet an airing, and the red plush seats weren’t quite so plush , or indeed quite so red. But the saving in cost was remarkable and made up for the difference. I’d certainly go again.

It’s not only opera – there are live streamings of plays and musicals, and no doubt other things as well. Quite a change from touring performances by necessarily limited touring companies, or pre-recorded films, or sitting in the rain outside the ROH and watching the production on a big screen. Or sitting at home and watching it on the TV or on DVD. And all brought about by the fact that most films are distributed digitally these days, and so all the cables and hardware are in place, and somebody had a good idea.

Now I’m not certain this will be a raging success in the end. The glitz is an important part of the opera. But we all saw the performance for a fraction of the cost and virtually no travelling, and the cinema got an audience on a wet Thursday that it wouldn’t have had otherwise, and the ROH no doubt got its fee and a much bigger audience than it could fit into its building. So a win/win for the time being.

And it made me think. What else is there that our customers, or clients want, and would pay for,and which we don’t give them either because we don’t realise they want, or because we don’t think we can make any money by doing? Because everything changes, and the way to succeed is to be just a bit ahead of the crowds. The telephone was once new and unusual. No longer.

As this is a law-based blog I’ll concentrate on ideas for lawyers, but it’s a universal concept. And remember, the client doesn’t always know what he wants: as Henry Ford  said “If I’d asked my customers what they wanted, they would have asked for a faster horse”

  • Should you be local? Clients can drop in to see you easily, you know the local opponents and the court and professionals. You can get very well known in your little patch, and although you will have to remain fairly small this won’t necessarily matter.
  • Should you be centralised? You might never see your clients but does this matter, with Skype, email and so on? You can be in a cheap part of the country and work for clients in expensive areas, at lower cost. Agents or counsel can cover any meetings or hearings for you that you can’t handle electronically, and you can grow large and wide-ranging, allowing you to cover all fields of practice.
  • What about multi-disciplinary practices, with accountants, architects, engineers and insurers? Like the above but more so. And you can cover all of a client’s needs, not just the legal ones.
  • Should you be niche? Cover a small range of work but be a leader in the field – celebrity motoring, claims against dentists, intellectual property, work for Russians. High value, low volume, and the clients will come to you.
  • Should you be high-volume? If you have enough volume you can be cheap and still make a profit, and a lot of clients are driven solely by price nowadays.
  • What about selling packages? A kit to evict the tenants, tied in with 30 mins of telephone advice, for a fixed fee. Or various sorts of lease, or contract, or the clauses to make up a will, or terms of business. Pricing and protecting from reselling can be tricky, and packages usually sold via an active website.
  • Going further, what about complete unbundling of services? Instead of acting for a client in say a contractual dispute you sell a guide to court procedures, or a hour’s advice, or 10 letters (for the price of 8) to the other side, or draft a claim (like counsel have done for years), or sell more advice before a hearing, or sell advocacy services. Each item has its price and the client can mix and match as they like.
  • Or work with an insurer and have your services covered by the insurance premiums?
  • Or even work for an insurer, or another body such as the RAC or UNITE and provide services for their members?

These are just examples. They aren’t all appropriate for all sorts of work – a criminal defence package looks improbable – and each one has its own pros and cons. You can no doubt think of some of these, and this piece is to raise questions, not provide all the answers. But you do need to be asking the questions, because if you don’t you can easily be left behind. Life is looking challenging for the middle-sized middle-of-the-road solicitor, and they won’t all make it.

Of course, you also need to watch out in case the powers that be decide to move the goalposts, such as removing civil legal aid and now criminal legal aid, or changing the court system, because a lot of your calculations will need to be reworked, and your good little earner may become a basket case in no time. But that’s life.

A marketing client of mine sent me a message earlier today

There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.

So make sure you give him (or her) what he wants. Even if he doesn’t know he wants it yet. Or you may be toast.


Title from Wannabe by the Spice Girls

No More Time – the importance of M A Lloyd v PPP International

We civil litigators have all been given a very nasty shock by the most recent and most disturbing cases of  M A Lloyd v PPP International,  When the case was first out the interest was on the Claimant’s lawyers, who have an interesting professional history. But this was a distraction. Because Turner J decided that the time for service of witness statements, and indeed most other times for doing things, can no longer be extended by agreement of the parties. There has to be an order of the court. There’s a useful comment on this and some other similar issues on the Nearly Legal blog here.

The reason given by the Judge was CPR 3.8(3) which  provides that

Where a rule, practice direction or court order-

(a) requires a party to do something within a specified time; and

(b) specifies the consequences of failure to comply,

the time for doing the act in question may not be extended by agreement between the parties

As CPR 32.10 says that if witness statements are served late the witness concerned cannot be called without leave of the court, these are “consequences” and so the time cannot be extended by agreement.

And because of Mitchell the court should only extend time if there are exceptional reasons, such as the solicitor concerned being taken seriously ill. So instead of agreeing with your opponent to exchange expert reports 7 days later than ordered, because the expert is being a bit slower than you would like, and there being no harm to either party, and no delay on the trial date, solicitors are now going to have to make an application for an extension of time which may well be treated by the court as an application for relief from penalties, under CPR 3.9, which the court should normally refuse, under the Mitchell doctrine.

Previously it had always been assumed that the reference to the “consequences”was a reference to an “unless” order when the court had prescribed penalties because of previous failures to adhere to the rules, but this no longer seems to be the case. And it is a serious matter. There are consequences set out in the rules for failing to include documents in Lists of Documents, failing to serve witness statements in time, and numerous other things. In all these cases the parties are going to have to make applications for extension of time. And although it is only the decision of a judge at first instance, the decision by Turner J, a High Court Judge, will be binding on all Masters and DJs, who handle the vast majority of this work. They had better not book too much holiday in the next few months because they are all going to be working their socks off for the foreseeable future.

It may be that the CA steps in to sort matters out, but I doubt it, given Mitchell. We’ll have to see how things develop.

The best way to do so is to follow Gordon Exall’s excellent blog Civil Litigation Brief which covers everything remotely connected to the problem. (What will he do when it’s all sorted out, as it surely has to be?)

Law or Justice – Where Are We Going?

There are two classic forms of Justice:

In the first, a perfectly wise judge dispenses justice under a palm tree. There are no rules, other than a record of his previous decisions, but he achieves the right result because of his wisdom.

In the second a perfectly wise ruler promulgates a code of laws and these are enforced by a a corps of officials. Although not particularly wise they are thorough, logical and incorruptible and they always achieve the right result because of the perfection of the rules.

Most, indeed all legal systems work as a mixture of the two. Exactly where they are placed on the continuum depends on the quality of the judges, the quality of the laws, the sophistication of the community and their lawyers, and so on.

Neither system is perfect: the first system is difficult to predict and hence difficult for others to plan – is the prohibition on killing people or just on killing people unless they attack you? And the second system can fall apart if the laws become ever more complex to take account of more and more exceptions and special cases, so nobody knows what it means, at any rate within a reasonable period.

Where we are coming from

The English legal system has traditionally been based on the first system, with a lot of emphasis being based on the quality of the judges and the legal representation, especially in the higher courts. High Court judges and those in the appeal courts have had an excellent reputation and English lawyers are some of the best in the world. As a result, laws have been reasonably general, and a lot of discretion has been allowed to the judges in interpreting them, and in controlling their own procedure. Even if there have been procedural rules these have always been filled with “unless the court otherwise directs” and judges have been encouraged to look to the  justice of the ultimate decision.

Now the system was far from perfect. It was far too slow  – quite ordinary cases could run on for 2-3 years  – and surprisingly expensive. A lot of time was wasted waiting for various procedural hearings, or persuading the courts to enforce orders that they had already made, and which your opponents were just ignoring. And if you had a bad judge you got some shockingly bad results. So as business geared up into the 80s and 90s things needed to change.

Where we got to

A good place to draw breath was the beginning of this century. In 1999 the Civil Procedure Rules (CPR) came in to replace the Rules of the Supreme Court and the County Court Rules that went  back essentially to Victorian times. These were intended to speed up court procedure and force the parties and their lawyers to get on with things. They provided all sorts of new innovations, such as the exchange of witness statements long before trial, and more detailed disclosure of documents, and provision for expert witnesses, and telephone hearings, and modernisation of the rules on costs, which virtually nobody understood.

They represented a significant movement in the direction of the second, rule-based system. There was far more detailed procedure and the courts were encouraged to enforce it, at any rate by way of penal provisions for costs. But still the judges could alter things, and exercise their discretion, and the (new) overriding objective was

To deal with cases justly, and at proportionate cost.

Outside the courts there had of course been a lot more changes. Governments decided that they didn’t just want to govern the country, but to change things as well. So they set about passing vast numbers of laws on all subjects, including not only Acts of Parliament, but vast swathes of secondary legislation by way of rules and orders and regulations. And they created other bodies to do more of this, and started regulating the financial services industry, and employment, and health and safety, and so on. And the EU of course did the same, only in 15 different languages. So there was an awful lot more law than there had been.

At the same time the IT revolution arrived, making it initially lots easier to prepare much longer documents, such as contracts and leases, and witness statements, and then much easier to keep track of all the new laws using the internet. Whether the two balanced each other is a matter for debate.

Where we are now

There can be no doubt that there are now more rules than ever, and there has been a further significant movement towards the rule-based system. But as well as the steady accrual of more and more regulation, both for the country at large, and within the legal system, there have been several recent developments that have pushed things sharply in that direction, mainly arising from the Jackson Report.

The new costs rules which came into force in April 2013 meant that all cases worth more than £25,000 had to have their costs approved by a Judge beforehand, or, in effect, they would not be recoverable from the losing party if you won. It didn’t matter how unfair this was. Nor that many judges knew little about costs or what was involved in running a case at the sharp end. It was decided that predictability of cost trumped all this. Not that it was a bad thing to have predictable costs, but it was some way from pure fairness.

Then there were the further rules that came into force in October 2013, and which I dealt with in a piece at the time. These emphasise the importance of detailed case management at the first Case Management Conference, which will now last for an hour or two and will plan the whole conduct of the case from a viewpoint of 2-3 months after issue. Lots of decisions that used to be made by the lawyers as matters proceeded are now going to be fixed by the DJ at this hearing.

Now, all litigation is, to some extent,unpredictable. When both sides know what the answer is going to be they don’t fight about it, but come to a rapid settlement. If the facts and the law are clear then you don’t need to spend all that money on lawyers and so on. And in many cases which started off as potentially arguable a bit of early investigation show one side or the other that the experts all think one way, or your key witness isn’t as clear as you hoped, or the legal problem was determined by the Court of Appeal  in an identical case in 1987. So you just have to bite the bullet. But this still leaves a number where the outcome might go either way.

In some of these, things come out of the woodwork as the matter proceeds. You find another witness who you didn’t know about, or who knows more than you expected. Or there are things in the documents that the clients had overlooked and only appear when you are well on the way to trial. Or counsel finds that case in the CA, which was mis-indexed on Lexis. The result is that the case needs to be altered, to accommodate the new witness, or the new documents, or whatever. Various time limits will need to be amended, the other side may need to be allowed to deal with the new material and there may even need to be alterations in the time estimate for the trial.

In the past this wouldn’t be too disastrous. There would probably be penalties in costs, and the interests of justice in coming to the right decision have now been challenged by the importance of allocating the appropriate share of the court’s resources to the case, and to enforcing compliance with rules, practice directions and orders. But still the basic concept of getting the right result. However, all was going to change at the end of 2013.

The Mitchell Case

The latest CPR revision came into force on 13.11.13 and on 27.11.13 the CA gave down the judgement in the Mitchell v NGN case (Plebgate). As you know, they refused to allow the Claimant to recover any costs even if he wins because his costs schedule was 5 or 6 days late. The costs claimed amount to over £500,000 and comfortably exceed any likely award of damages. The reasons given were that the rules were there to be obeyed and the court was going to make an example of them in order to encourage the others: well these were the clear reasons that were applied;  the CA expressed them with a bit more subtlety.

Following this case there have been large numbers of cases in which parties were penalised for being slightly out of time in doing various things, often by having claims or defences entirely struck out or large amounts of evidence disallowed. A few of them were cases in which severe penalties were deserved, after a long history of failures to comply with the rules, but many of these were complete windfalls for the opponents who had noticed minor technical errors. There is a very useful compilation of the recent case-law in Gordon Exall’s website Civil Litigation Brief

One of the most recent and most disturbing cases is M A Lloyd v PPP International, which was commented on by the Nearly Legal blog here. When the case was first out the interest was on the Claimant’s lawyers, who have an interesting professional history. But this was a distraction. Because Turner J decided that the time for service of witness statements, and indeed most other times for doing things, can no longer be extended by agreement of the parties. There has to be an order of the court. And as Turner J is a High Court Judge this is binding on all the Masters and DJs who deal with the vast majority of the procedural work. They are going to notice a big increase in their workload.

What do we conclude

Judges still retain some leeway, but a lot less than they used to have. The rules are coming out on top. And because rules are rarely prepared as a whole code, but usually built up piecemeal filling the gaps and correcting the problems, they often are inconsistent, contradictory, and have unexpected results. There will always be problems that need sorting out. Because at the end of the day the purpose of a legal system is to provide justice to the litigants.

This is why judges have always been given the discretion to sort things out, and look at the overall picture. Of course they need to bear in mind the fact that no system will work if too many people fail to follow the rules and ask to be treated as exceptions. We don’t want to go back to the delays there were in the past. But no system of justice can work if every slight deviation from the myriad of rules is wholly fatal to one side or the other. That is not justice.

The Judicial Oath that is taken by all members of the judiciary is:

“I, _________ , do swear by Almighty God that I will well and truly serve our Sovereign Lady Queen Elizabeth the Second in the office of ________ , and I will do right to all manner of people after the laws and usages of this realm, without fear or favour, affection or ill will.”

One would hope that the “laws and usages of this realm” do not entirely overwhelm the obligation to “do right.”

We’ve Got Our Work Cut Out – the New Procedure

I don’t deal only with housing and landlord-and-tenant law, and so I’m interested by the recent changes in civil procedure, and in particular the new rules on cost management (which came in on 1.4.13) and on case management generally (which came in on 1.10.13), and I  recently went to a very useful talk given by one of our local Midlands District Judges all about this.

We were told how cases that are allocated to the multi-track (generally those worth more than £25,000 or likely to last more than one day) have got to have their costs budgets agreed by the other side or approved by the DJ. The costs are then limited to the budgeted figures. And we were told how DJs are now taking a much more active role in managing cases, with major decisions on disclosure, witnesses, evidence and issues being decided by them at CMCs, which will now last much longer as a result.

The talk was fascinating, as much because of the insight into the way the local bench are thinking, the matters that bother them (poor court administration, shortage of staff, loss of files, delays in issuing paperwork) which are hardly any different from those of us on the other side of the table, as well as the guidance to the changes in the law (and in particular the CPR) itself. Time and again we were told that if the Judges are going to make sensible decisions on how to run the cases they need to have lots of information about what is at issue, how disputed matters can be decided and what evidence this will need, how long it is all going to take, and how much it is going to cost. If they don’t get these basics then the orders that they make are either going to be inappropriate, or, after having done this for a time and learned not to do things that afterwards turn out to be a bad idea, much more vague, general and really nothing which cannot be replaced by rules, as had been the case so many times in the past.

The Problem

Now I’m not going to cover all the changes in this article. It’s a bit out of my normal area and there are many others who have covered it far better. And as the DJ told us, nobody knows how all this is going to work out in practice yet, and we need time, and a few decisions of the higher courts before it all beds down.

Also, I’m not going to moan that the courts are trying, yet again, to take the management of our clients’ cases out of our hands and run things themselves, although I might have done so. The older members of you might remember the Woolf reforms that resulted in the CPR in 1989, ending the Rules of the Supreme Court, and the County Court Rules, that had been around since the 1870s. Lord Woolf toured around the country gathering views from the profession before carving things into the stones, and he proposed much the same thing then. It didn’t work because the government wouldn’t give the courts enough money to pay for the extra judges and extra IT needed, and management became ineffective.

I went to one of his meetings in the Midlands and when it came to the questions after his speech I said to him that I, along with many of the other solicitors present, had spent many years building up a reputation in running litigation. Clients came to me because of this. If the litigation was going to be run by the DJs, who have largely left my profession because they didn’t like running litigation, how did he think this was going to be progress? As the clients would have no say in which of a number of DJs sitting in one court are going to manage their important cases they won’t even be able to vote with their feet. And I felt sure that a different DJ would deal with each separate application so there wouldn’t be any continuity. Many people agreed with me, and he really didn’t have an answer.

However, I think that the practical side of serious litigation has now become so awful that another attempt has to be made. A couple of years ago I was talking to the finance director of a medium-sized enterprise in the automotive business. He told me that he had recently become embroiled in litigation with one of his suppliers and was horrified at how things were going on (it wasn’t one of my cases). He had been involved in many projects throughout his career, and had recently moved his factory to brand new premises. In each case he and his colleagues made a plan, and set a budget, and a time-scale. Now these were not always entirely adhered to, and always contained provision for contingencies, but they were manageable, and he could plan the rest of his business around them.

Litigation just wasn’t like that. He was given a number of possibilities as to how his case would progress, a cost estimate that ranged from the improbably tiny to the outrageously huge, and a time scale that ranged from weeks to years. It all depended on what the other side did, and how the court responded. He had no control over it, and was deeply disturbed. He had no criticism of his lawyers, who were doing their best in impossible circumstances, but he couldn’t afford to continue despite having, on the evidence as he understood it, an excellent case, and was going to do a poor deal in order to avoid the uncertainty.

I had heard the same sort of thing many times, as most of us have, but never put quite so clearly. In his view, litigation ought to be a project like any other. It should be managed, budgeted and timed so that it works. OK there will be some uncertainties, but life is uncertain, and we seem to cope with that. The legal system just isn’t delivering on litigation and things will have to change. I wholeheartedly agree with him on this. And the new attempt at cost and case management looks like a valiant attempt to do the job, and it is worth supporting. We have tried solicitor-management of cases for many years and look where we are! If you are going to control cost then the courts will have to fix a price and the parties and their lawyers are going to have to work to it. If the court says that the costs are going to be £30,000 then you will have to get used to doing only that amount of work, and that extra expert, or the possible witness or the third conference with counsel will just have to be cut.

No, what I do want to cover is the matter of timing, and the work that will need to be done in the early stages of a case.

The Solution

The whole management project is aimed at holding two major hearings for every case. The second of these will be the trial, as you would expect, although this will only be reached in a small minority of cases that don’t resolve before then. The first of these will be the new revamped and specially augmented Case Management Conference, which will plan the way in which the whole case will be handled, and in order for it to be effective it will have to be properly prepared for.

Now we are long used to preparing properly for the trial. We index and bundle and brief and file and realise that it is all needed if tedious. It is the end of the process in any event and most cases don’t get that far. There is a lot of time to do all this and the trial date gets fixed in stone some considerable time beforehand.

What is going to be a shock is doing this for the CMC, virtually at the beginning of the case. Not only will it be needed in nearly all cases that issue, as there is little time to settle at that stage, but there will be a lot of things to do in very little time.

The DJ will want the Claimant’s lawyers to produce a CMC bundle. In Birmingham (my local major trial centre) this will have to include

  • Contact details of all lawyers and representatives
  • Claim form
  • Statements of Case
  • Orders made (if any)
  • Case Management Information Sheets (ie response to Directions Questionnaire)
  • Disclosure Reports (DR)
  • Electronic Disclosure Questionnaires (EDR)
  • Estimates of costs of proposed experts with list of issues they will address
  • Draft list of issues to be tried (DLI)
  • Draft direction (incorporating all parties suggestions) (DD)
  • Costs budget in Form H

Some of these are easy and obvious. But some are not – the DR and EDR can require considerable thought, the expert quotes may take some time, and the DLI and DD are clearly crucial and important. And enough has already been written about the costs budget to let you know that it is both crucial and complicated, with a lot of scope for messing things up.

All this is certainly achievable, and it will undoubtedly make the DJ’s task easier if it is properly complied with. But it will take a lot of work, and hence cost, in very little time, especially as some of the items such as the DR and EDR need to be served 14 days beforehand, and the whole bundle has to be filed 7 days beforehand. Especially as these items, plus the draft directions and Form H have to be discussed with the opponents as well, and consideration be given to their views.

The Timing

Now looked at from the point of view of the Claimant this is manageable. They have 6 years (normally) to bring proceedings, and hence virtually as much time to prepare as they want, although this will all come at a cost to their clients. Full statements from the witnesses, lawyers crawling over the documents and  quotes from experts once the issues have been extracted won’t come cheap. Counsel will very obviously be needed from considerably earlier than day one. All this cost will be lost if the exploration shows that there isn’t a case, or at any rate a sufficiently strong one. The days of the “suck it and see” claim look numbered.

If things get off the ground then all that ought to be needed is a tweak after hearing from the Defendants in response to the Protocol letter (before issue) and a further tweak, setting out the issues, after the Defence arrives and you’re nearly there.

From a Defendant’s point of view however things are much tighter. Defendants rarely go to their lawyers until they get the Protocol letter, or shortly before this. The letter will set things out is some but not extensive detail. There is then about a month (which might be extended) to respond, and as the lawyers will be starting from cold they will be vague, general and guarded, while they are trying to see their own witnesses, evaluate the documents, and working out what’s going on and what their best tactics will be. So unless serious negotiations get under way the Claimants are likely to conclude that they are wasting time and issue proceedings.

The Claim Form and Particulars of Claim give 4 weeks, extendible to 8 weeks to respond in a formal Defence. And serving the Defence triggers notice of the CMC, usually about 4-6 weeks away. Remember most of the documents have to be filed 1 or 2 weeks before this hearing, with discussions between the lawyers before this.

The Result

I’m not sure whether the intention is to hustle the parties into early settlement via say a formal mediation, but experience shows this to be most effective either very early on, before issue, when little cost has been incurred and the parties can factor the avoidance of future costs in to their calculations, or much later when all the evidence and documents have been disclosed and everybody can take a realistic view of their chances. Will forcing both parties to incur very substantial cost right at the beginning really help? I suppose it might just frighten them away from the courts entirely, but otherwise I have my doubts.

Now parties engaged in the largest litigation have always had to plan from the very beginning, and deal with the vast strategy that this involves. They realise that pre-issue costs can be valued in tens if not hundreds of thousands of pounds. But this is a system that is meant to handle all claims over about £25,000 – a substantial dispute with a supplier, a contested probate for a modest estate, a serious but not catastrophic injury. Even for a more substantial claim for £100,000 the cost is going to be really significant.  Is this really the best way to manage things? Should perhaps there be some middle way? Or is this the only way to keep a lid on things, and people who can’t afford it should just stay away from the courts, if they can.

Only time will tell.