Coventry View

A litigation lawyer's perspective

Posts Tagged ‘solicitors

So What are the Risks? Should I take It?

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Lawyers are often asked by their clients what they think about an offer that has been made by the other side. This is one of the most difficult parts of lawyering, but one of the most rewarding, and when I do this I feel that I am really earning my fees.

Because there are no end of factors to take into account. Some of the more obvious are:

  • How the offer compares with the amount claimed
  • What your chances of success are
  • How these will affect the likely result – might you lose, or only win less
  • And how much this depends on inponderables – like how key witnesses do at trial, or what the undisclosed documents might show

But you rapidly get on to more complicated areas:

  • Will the other side pay the amount of the offer?
  • Will they be able to pay any judgment for more?
  • Can your client afford to take the case to trial?
  • Can your opponent?

And then there is the nature of the advice that you give:

  • You need to give a young, inexperienced client more advice than an older, wiser one
  • But if the client has little money you can’t spend too much time or money in doing this
  • Some problems are legal and need detailed explanation
  • Some are really matters of business and more for the client to decide

However, few clients are aware of the possible cost, or risk, of substantial litigation, and most need to be advised on this, so that they can make an informed choice on what they want to do.

Of course, not all clients have the same goals. Some want certainty, and a rapid settlement even if they might get more by pushing on. Others want to get the most possible, even if they are taking a lot more risk of failure, or significant irrecoverable expense.

No, advice of this sort is where litigators really earn their money, and it was in the spotlight recently in the case of Graham Seery v Leathes Prior [2017]EWHC80(QB) which was a professional negligence claim against a firm of solicitors in Norwich by a disgruntled client who settled a claim, with their advice, and then felt that he might have got more if he has pushed on a bit further.

What I always like about this sort of thing is the chance to read the letters of advice written by other lawyers. This one, written by Dan Chapman, was a cracker. It was given against a background of a very slippery opponent, and a claim against a company wth a doubtful financial position. The Claimant had been made offers from the other side that were getting up to £310,000 but negotiations were stalling and a decision had to be made on whether to take the offer, or make tactical steps which might get more. Part of a letter quoted in the judgment reads:

“… I have a strong feeling that we might be at the end of the road in these negotiations; I know my counterpart feels that his clients are also being ’emotive’ about the dispute and thus perspective is being lost. He feels also there is not likely to be any more movement from his clients, rightly or wrongly.

So I suggest you discuss the current offer – which totals 310k with 210k being paid up-front (I think we should be able to reallocate the figures to get it all net, so assume this for the time being) and the remaining 100k paid over 18 mths with interest – with your wife tonight. It seems to me a huge financial decision for you and your family; if we reject this now I think we will be tied down to litigation for sometime. We will need to fight the Tribunal claim, issue winding up petitions and, to gain any real value (since the Tribunal claim is worthless in real terms), issue (and succeed on) a High Court unfair prejudice claim. The costs will be enormous (not by SJ Berwin standards, of course, but huge nonetheless) and no guarantee of any return whatsoever if FWA go bust in the meantime (or manage to reallocate their assets). So take some time to seriously consider your options, and check that you and your wife are comfortable with where we are going – as I say, my very strong hunch (and I am usually right on these things) is that their offer is now their final offer. Of course, that doesn’t make it right or mean you should accept it – but I need to advise you of the consequences of rejecting what might well be their final offer. As experienced litigators, we tend to have a feel for how these sort of cases pan out, and you don’t pay me to tell you what you want to hear, but what I would advise. In this particular case, if it were me then I would accept the offer, bank the cash (as galling as it undoubtedly is to you) and get on with my life. But it is not me who is living this case, and I shall do whatever you instruct me to do!

Please don’t misunderstand me – I (and my firm) will be more than happy to fight this all the way. However, I have a duty to ensure that you (and your family) are fully aware of what you are getting yourselves into. I don’t want to be walking out of the High Court in 2 years time, telling you that whilst we have won the total damages you are able to recover from FWA amount to zero since the company has gone into liquidation, and then handing you my firm’s bill for 70k, at which point you might wish you had accepted the 310k on offer! You would not be too pleased with me, either, if I had not have advised (sic) you to accept that 310k! And then I would be getting sued for negligence!”

All excellent stuff, especially the bit that I have emphasised.

In the light of this you won’t be too surprised to hear that Sir David Eady, an immensely experienced judge, now sitting in retirement, dismissed the claim. A warmer judge (Sir David being notoriously unemotional) might have congratulated the solicitors on the quality of the advice given. I do so here, for what it’s worth.

 

 

Written by Coventry Man

25/01/2017 at 22:04

Life as a Litigator in 2014/15

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In another life I am on the Council of the Warwickshire Law Society, and I thought that you may like to see the report that I prepared for their recent AGM. I was told that it looked a bit too gloomy, and that may be right. But I think that I end up in the right directions. What do you think? – leave a comment below, or tweet me at @CoventryMan.


 

2014/15

Life as a litigator is getting harder and harder. And the coming year looks like it could be worse than the year just past, which was, shall we say, challenging.

While preparing this report I looked back at my February 2014 effort and I see that it recorded a succession of blows, including case management, the Mitchell case (strict compliance with court orders essential), the increase in litigants in person, the Superstrike case (AST landlords must give information on deposits twice), and the loss of a number of local firms. All pretty discouraging stuff. So I ended up hoping for a slowing in the rate of change in order to let us adapt.

Well, we didn’t get that. We have had continued and accelerating change, and this seems likely to continue, regardless of who gets in to No 10 in May.

IN THE COURTS

From April 2014 the County Courts have all been amalgamated into one County Court, so Coventry County Court has become The County Court at Coventry. In practice it has the same hearing centres that were there previously, but the procedure for closing or moving them has suddenly become a lot easier. Already all money claims are issued in Salford, and one wonders how long it will be before all the other claims follow. Or the trial centres reduce yet further. My Family colleagues are already facing the prospect of having to go to Nottingham for hearings, and we will surely not be left alone.

If of course we still have hearings at all – you may have heard the apparently serious suggestion recently that all civil cases for less than £25,000 that could not be resolved by telephone mediation should be dealt with by judges by way of internet decisions, normally without any sort of hearing, and without the intervention of lawyers at any stage.

This of course supposes that people will continue to litigate. All of you must have heard of the proposed increases in court issue fees that are intended to take effect in April. These will stay much the same up to a (small) claim for £10,000, but will then rise to 5% of the amount in question, so a claim for £40,000 that currently costs £610 will shoot up to £2,000 and a claim for £150,000 from £1,115 to £7,500. Claims over £200,000 will cost £10,000 to issue. There will be other fees including potentially increased trial fees as well. And funding costs can’t be recovered by the client any more even if they win.

The Government states that 90% of all claims will be entirely unaffected by this (no doubt correctly as the vast bulk of claims by number are indeed small debt-collecting claims) and that court fees are a relatively small part of the total cost of a case. However, they are a cost that has to be paid for up front in non-refundable cash, and this will significantly increase the cost of disbursements for even a moderate personal injury claim. One wonders if there will be a similar reaction to the introduction of Employment Tribunal fees a few years ago, when the number issued fell by some 80% after the introduction – probably not as court actions tend to involve more money anyway, but it is sure to have some effect. We shall have to wait and see.

IS THERE ANY GOOD NEWS?

Well the Mitchell case (see above) has been superseded by the much more sensible Denton case, which allows the courts to balance the errors against the interests of justice as a whole. And Superstrike is being overruled by a section in the Deregulation Bill which is due to be approved by the House of Lords on 4th March and so should be passed before the General Election.

In the larger world, Scotland hasn’t drifted off into the North Sea, the new Distance Selling Regulations which apply to solicitors who see people away from their offices aren’t as frightful as they first appeared to be, and if everything goes pop the frightening case of Raithatha v Williamson, which said that a Trustee in Bankruptcy could potentially seize the whole of a pension pot after the pension revisions in April 2015 has met the equally authoritative case of Horton v Henry, which said that he could not. So we all may have some future

BUT WHAT DO WE DO?

We can’t go on the way we have done before because things are radically different. 1,061 solicitors firms closed in the year up to November 2014, out of 10,312. It could be yours.

I’ve thought a lot about this sort of thing over the last few years, and written a number of pieces in my Coventry View blog, most recently telling everybody to be a Sheep if you could, or failing that a Goat, but not in any event a Dinosaur. It seemed a good idea at the time, and involved being Light on Your Feet, Keeping Up to Date, Winning, Knowing the Shortcuts, and Remembering that you are a Lawyer, among other things. I think it’s worth reading for yourselves – but then I would.

Whatever you do, though, have a plan. Nobody owes us a living. Politicians hate lawyers because they have discovered that it is much easier to attack lawyers than the public, and without the lawyers the public can’t in practice enforce the rights that they have. Why abolish the right to claim against the NHS for clinical negligence if you can just make it too expensive to do so, or can arrange things so that your nearest solicitor is in Bradford? So they will carry on doing so, regardless of the result in May.

Litigation matters because it is the sharp end where clients enforce their rights. Our colleagues grant them rights in the contract or the will. If they can’t enforce these rights they are worthless, so this is where we come in. Our colleagues are useless without us. And if we are good at it we can make a good living and enjoy the work as well. A win/win situation.

Written by Coventry Man

28/02/2015 at 18:16

Where Do We Go Now?

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I started this blog in 2011 and as you do at this time of year, I’ve been looking back through the postings to see what I seem to be writing about. The blog is meant to be about property litigation, and to no real surprise I have written quite a lot about that. However, I do keep coming back to a different topic, and this is another piece of that sort.

The topic is the actual way in which people can use their legal rights and the legal system that supports them.

As a practical lawyer I know that for people to have useful legal rights they need a lot more than just having the rights themselves. They need to know about them, be able to get advice, and have practical, and affordable ways of enforcing them.  I have written about the need for all businesses to know some basic law in Law and Business and about some of the other requirements for a practical legal system in Having Rights is Not Enough, and pointed out why Mediation is not the answer,  but this time I want to look at things from another angle. I touched on it in Tell Me what You Want, but I’ve developed it further here.

A lot has been made of the changes in legal procedure and practice over recent years. Some people say that it is a long-needed simplification, and the cutting of miles of unnecessary red tape, that will result in much quicker, easier and cheaper justice for all. Others say that it is the destruction of hundreds of years of justice and a legal profession solely for the advantage of big business, the government and other prowerful players in the field. The argument has raised a lot of heat, but not cast a lot of light, and I’m not going to tackle things in such a broad brush way. Because there was something to be said for both sides.

The practical effect however has changed the legal landscape, and like the earth after the asteroid, it is no longer a place for dinosaurs. This piece is aimed at lawyers who want to survive.

The Sheep, Goats and Dinosaurs

In the new reality you can divide the survivors into two sorts: the sheep and the goats.

The Sheep are major companies, the Government and its quangos, and High Net Worth Individuals, engaged in disputes with other Sheep, and the large firms of lawyers they use, based in the major cities.They deal with the High Court, and the Court of Appeal, and apart from some increase in cost, and some decrease in the time taken by the Courts to deal with things, they will have noticed very little change.

The Goats are smaller businesses, clubs and associations, and the rest of the population. They have disputes with other Goats, and also from time to time with Sheep. They also use Goats –  smaller specialised lawyers and other agencies who adapt rapidly to change. They generally deal the County Court and District Registries, and have noticed very significant increases in cost and in the time taken to deal with their cases, and a large reduction in the resourses available for their use. So they have to be canny and resourceful and will be the heroes of this article.

The Dinosaurs used to be either Sheep or Goats, or their lawyers. They didn’t notice the change in the legal environment until too late, if at all, and so are either trying to carry on as if nothing had changed, with disasterous consequences, or have given up any significant use of the court system, and try to deal with things in other ways.  The lawyers have gone out of business.

How to be a lawyer for Goats

In the new world there are many new rules:

  • Be light on your feet – be ready to adapt to changes quickly. Just because you always did something one way doesn’t mean that it’s the best way now.
  • Keep up to date – there are frequent  changes in the law and the CPR and in the court decisions that follow them. You have to be ahead of the crowd to win.
  • Winning matters – this is why your clients come to you.
  • Keep an open mind – there are lots of different was of doing things. If one way doesn’t work there are many others.
  • Payment by the hour is on the way out. Clients much prefer payment by stages (eg up to issue) or by results. You have to adapt.
  • You’ve got to know the shortcuts. Nobody wants to go all the way to trial. Know how to get summary judgment or default judgment, or the Defence struck out. Or more usually, a good offer.
  • Specialise. You can’t know everything well enought to be really good at it. And being really good matters.
  • Get it right first time. You can’t afford to do things twice.
  • Don’t carry passengers. You need a few experts plus a flexible team to draw on when you need them.
  • Be small. You may grow into a Sheep with guaranteed multiple repeat businesses. But until then you can’t afford to be bigger than you have to be.
  • Make friends. This is the key to being a small business. There are lots of people out there who want to help you and you only need to pay them when you need them. And sometimes not even then. A smile may be worth hundreds.
  • And remember you’re a lawyer. You don’t run the client’s business or life. That’s their concern. But you’re liable to lots of extra obligations as a lawyer. And being one will pay the rent next year, when this client has moved on.

I’m not telling you everything. I need to make a living too. As I said, I’m a practical lawyer. But this is the new reality. And if you ignore it you are likely to go the same way as the dinosaurs. Which is not a good idea, on the whole.

A Happy New Year to you all.

Written by Coventry Man

01/01/2015 at 20:04

Distance Selling Regulations on Steroids

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The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (2013 No 3134)

Now as I’ve said before, you’re a bright and well-informed bunch, and have no doubt heard about the Distance Selling Regulations (Consumer Protection (Distance Selling) Regulations 2000)  which covered Distance Selling – basically selling things to people without meeting them, normally by internet or mail order. You may also have heard about the Cancellation of Contracts Regulations (Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008) which really don’t need much explanation once you’ve read the title.

Well, you can (shortly) forget them, because from 13th June 2014 they have both been replaced by the regulations listed above, which I will call the CCR.

Now this isn’t some neat consolidating exercise, that just bundles the two sets of Regs into a new one. That would be far too easy. The CCR make important amendments to them, and adds in some new stuff too. And, most importantly, they apply to ALL contracts made between traders and consumers, in both cases as defined in the CCR, apart from the exempted transactions, which I’ll mention below. This includes transactions made face-to-face in your office or shop, and because of  the definitions some of these face-to-face transactions are treated as if they were made off-site, in a consumer’s home etc and have cancellation rights. So it matters to most of us one way or another.

I will concentrate in this piece on how this affect professional services, especially for solicitors, as it’s an area of particular interest to me. But I may come back and cover more of it later if the muse takes me.

I apologise if this isn’t one of my most engaging pieces, although I have tried my best. However, it is one of my most important, as it might affect my own income, and that of most other lawyers.

Please note that I haven’t always used the full definitions etc in order to make this more readable. If it matters, read the CCR. And remember this is journalism, not legal advice. If you want to know more, the Law Society have produced a very helpful Practice Note.

The exemptions

The main exemptions are set out in r6 and include many of the usual suspects – gambling, banking & financial services, conveyancing, letting residential property, construction of new buildings, delivery rounds, package holidays, timeshares etc vending machines and automatic commercial premises (the mind boggles, but I assume this is car-parks and the like). There is also exemption for certain things to do with telephones (which you will have to read of you want to know more) and for goods sold by way of execution. And there are also exemptions from some of the obligations in certain circumstances – eg there is no right to cancel for  medicinal products prescribed by a health care professional (not just Doctors, it seems). If this all matters to you you will have to read the CCR for the details.

The important point however is that the vast bulk of services provided by most professionals,  including lawyers, to consumers, will be covered, and all those of us who thought that because we saw people in our offices we could ignore all this rubbish will have to think again.

 Definitions

Trader – person acting for purposes relating to that person’s trade, business, craft or profession. This includes acting through agents/employees, and actions not exclusively for the trade etc.

Consumer – individual acting for purposes wholly or mainly outside that person’s trade, business craft or profession. So can’t be a company or partnership, but may include  transactions by sole-traders outside their trading field – eg personal tax advice.

There are lots more, mainly in r5, which are worth looking at. But some of them are so important that they need a section of their own.

On-Premises, Off-Premises and Distance Contracts

On-Premises Contracts – any contract between a trader and a consumer that is not a distance contract nor an off-premises contract. So read on.

Off-Premises Contracts – contracts that are either

  • made face-to-face off the trader’s premises.
  • where the consumer made an offer face-to-face off the trader’s premises.
  • made immediately after the trader had addressed the consumer face-to-face off the trader’s premises, and whether made on the premises or by distance communications.
  • during an excursion organised by the trader to promote his goods or services.

Note that the consumer’s offer may have been made some time previously – I’d like you to prepare my will – OK I’ll make you an appointment and we can discuss this at the office when I return from holiday. And how soon is “immediately” for the next scenario? Clearly  if you meet a client at court and ask them to come back to the office with you to discuss their problem this counts. What if they come in next week? And what is an “excursion”? Would a visit to a client in hospital count?

An awful lot of transactions that would naturally be considered as on-premises contracts may turn out not to be – especially if there is a series of discussions leading up to signed instructions. And it matters – see below.

Distance Contracts – made under “an organised distance sales or service-provision scheme”, without any meetings up to the point when the contract is made.

Note that the portion in quotes isn’t defined. It clearly covers tele-sales and mail-order, and orders via the internet. Does it include a client who gives instructions entirely by letter and telephone, or by email? Quite probably, but we don’t know.

Why this matters

Part 2 of the CCR sets out different sorts of information that the trader must provide to the consumer before the consumer is bound by the contract. The information is set out in Schedule 1 for on-premises contracts, and Schedule 2 for off-premises and distance contracts. So if you don’t give the consumer the info in Sch 2 because you think it’s an on-premises contract and you’re wrong then they aren’t bound by it, and this can be serious. Not only can’t you sue them for the price, but you may have to repay them any money paid up front. They probably have a right to cancel the contract at no cost to them. And it may even be a criminal offence – more details in Right to Cancel below.

The information for On-Premises Contracts

This information is only needed in so far as it isn’t apparent from the context. For example if you are working in an office with Bloggs & Co Solicitors on the door, you can take it that the client knows your business’s name. And there is an exemption for “day-to-day transactions entered into immediately” although this is not defined. Presumably a barber would be exempt, as would be most transactions in shops. And administering an oath.

The info which must be given “in a clear and comprehensible manner”

  • the main characteristics of the goods or services – ie what you are supplying
  • the trader’s identity (eg trading name) address and telephone number – you have to give your telephone number to all clients whether they ask for it or not.
  • the price, or if this can’t be calculated in advance, how it is calculated.
  • any delivery charges.
  • arrangements for payment, delivery and the time involved.
  • the trader’s complaints handling policy.
  • in sales contracts, confirmation that the trader must supply goods in accordance with the contract.
  • any after-sales service or guarantees.
  • how to terminate the contract.

There are extra requirements if there is digital content.

There is nothing particularly unexpected here, but it does mean the end of the single-visit-and-no-paperwork transaction. You will always have to supply the information which would normally be set out in any client care letter or business agreement, and may as well do so  that way, although it would be possible to set all this out in notices and leaflets, or indeed orally. But remember that these things can be difficult to prove later.

The big danger is the extra information that has to be given to off-premises contracts, and which may be missed if you don’t realise that you are dealing with one at the time. The safest course is to provide all that as well.

The information for Off-Premises Contracts

More comprehensive. Includes all the information needed for an On-Premises contract plus:

  • any fax or email addresses.
  • if trader is acting on behalf of another trader, the other trader’s details.
  • the other trader’s business address if different.
  • details of cost per billing period or any monthly charges .
  • details of any increased phone or other communication charges.
  • where a right to cancel exists, details in accordance with regl 27-38.
  • cost of returning any goods if cancellation.
  • if there is no right to cancel, information about this, or how it has been lost.
  • details of any codes of conduct and how copies may be obtained.
  • any minimum duration for the contract
  • any deposits required or other financial guarantees to be paid by the consumer
  • where applicable, any technical requirements or compatibility problems for digital content
  • any relevant  out of court complaints schemes and how to access them

Much of this won’t apply for a legal business. But the cancellation rights may, and are set out below. And if they do then you must give the consumer a prescribed cancellation form. All this information and a copy of the signed contract (or confirmation of its terms) must be given to the consumer on paper, or another durable medium” (eg email) if the consumer agrees, before any services are provided under the contract. And the burden is on the trader to prove that they did all this, in any dispute with the consumer.

The Right to Cancel

This generally applies to all Off-Premises and Distance Contracts, although there are a number of exceptions, such as medicinal products, products trading on financial markets, and a number of exceptions relating to goods, repairs, auctions, holidays and so on. The only relevant one for a (cheap) lawyer is that there is an exception for transactions when the total to be paid by the consumer does not exceed £42 (or the current equivalent to €50).

Otherwise the consumer has a right  under r29 to cancel any distance or off-premises contract, without giving any reason, at no basic cost to the consumer at all, apart from some delivery charges, or when the consumer requests early supply. The cancellation period starts when the contract is made and normally runs for the next 14 days  ie 15 days including the day of the contract (an increase from the 7 days previously). However, the period is extended until 14 days after the cancellation information is supplied, or 12 months  and 14 days after the contract if sooner.

To cancel, the consumer has to give the trader “a clear statement setting out the decision to cancel the contract”. This does not have to be in writing, but as it is for the consumer to prove that they gave it clearly the best option. It doesn’t have to be on the form supplied by the trader but it can be. And if it is sent it only has to be sent within the cancellation period – it can arrive later.

Once the contract is cancelled all obligations come to an end and the trader has to return all monies paid by the consumer within 14 days. Any ancillary contracts are ended too. Any goods have to be returned or collected, and there are complicated provisions for the cost of this. More relevantly, nothing need be paid for any services supplied in the cancellation period unless

  • the consumer has requested the trader to do so beforehand in a durable medium, and
  • the consumer has been informed that they would have to pay the reasonable cost of this, and
  • the consumer has been given proper notice of their right to cancel.

The amount must be a proportionate part of the total cost, and the right to cancel is only lost if the service has been fully supplied and the consumer has been informed that this would happen.

It is a nightmare. Fortunately Schedule 3 consists of an approved form of notice giving details of the right to cancel, and the prescribed cancellation notice  which can be adapted and completed and given to the consumer, although the information can be provided elsewhere if you want to take the risk.

If this isn’t bad enough, failing to give the consumer details of all the cancellation rights on an off-premises contract is a criminal offence under r19 punishable with a fine of up to £5,000, both on the trader and any individuals concerned, including directors of corporate bodies.

Distance Contracts

I won’t go through these in detail as anybody who is intending to do serious business in this way will have to read the words in the CCR and the guidance very carefully anyway, and the rest of you will just get confused, or bored.

However, briefly, the trader has to provide the same information as for an Off-Premises  contract, adapted for distance/electronic mediums. This includes any “Accept” button being labelled “ORDER WITH OBLIGATION TO PAY”  “or a corresponding unambiguous formulation”. And again the burden is in the trader to prove that they have complied with all this.

Other Provisions

Just in case this wasn’t enough, the government took the opportunity of tacking on some amendments to the law on the delivery of goods to consumers, (within 30 days unless otherwise agreed) and the passing of risk on sales of goods to consumers (on delivery to consumer, or their own delivery service) in rr42 & 43. Plus some more provisions on inertia selling, additional payments under a contract (consent needed and a pre-ticked box won’t do) and prohibiting telephone help lines at premium rates – rr39-41.

Will it do any good?

Well, it will be good for paper manufacturers, and the likes of Brother, Canon, Epsom and HP. Clients will have lots more information, some of which will be useful to them. Some of the sharper practices will be banned, and some of the worst operators will be dragged up to the level of the better ones. But there will be more box-ticking and things to trip over, and I have my doubts on how much good this does in the end. We’ll have to see.

What do we do now?

We need to look at our way of working and not just our terms of business.

  • Consider your clients. Are they ALL businesses, and attending for business purposes? What about the will for the MD, or the tax advice for the partner?
  • Do you always see any consumers in the office and never elsewhere? Or discuss things with them elsewhere and ask them to come in?
  • What about the consumers who live at a distance and who you don’t see at all, but handle by email/post/Skype/phone?

Unless you are certain that all your consumers are going to enter into On-Premises contracts then you need to get lots of paperwork organised and supply it at the appropriate time. You are going to have to get used to the right to cancel and not starting work until the paperwork is in order and the client has requested you to do so in writing. You may choose to treat all clients as being off-premises consumers for safety, or rigorously divide them up into the different sorts. But you need to start NOW as you have 10 days left as I write this.

There is useful advice from the Law Society as mentioned above (here’s the link again) and two helpful and comprehensive pieces by Kerry Underwood here and here. There are many more out there so look at some of them because it’s very important.

And the Regulations apply for all contracts entered into on or after 13th June 2014.

 

UPDATE – for details of a case on the old regulations see here.

 

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

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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

Written by Coventry Man

18/02/2014 at 23:35

Mind What You Say

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I feel sorry for Bevan Ashford (as was) the West Country solicitors.  One afternoon in 2003 their small Tiverton office was visited by a distraught wife asking for advice and she was seen by a newly qualified solicitor who I won’t name here for reasons that will become apparant.

It seems that the wife had been told by her husband, a financial consultant, that he was in serious trouble, had been accused of taking some £200,000 from a client, and that the only way to avoid being prosecuted was to charge their jointly owned house, and their shares,  in favour of the client. Otherwise she and the children would see him going to prison.

In order for the charge to be valid the wife would have to get independent legal advice, and this is what she wanted. She had been given a letter from the husband’s solicitors explaining the situation very briefly and saying that she needed to get advice right away. Hence the visit to Bevan Ashford.

The meeting was a very short one – possibly less than 15 minutes as the wife had to collect the children from school. The solicitor gave excellent advice: don’t sign or agree to anything, don’t go ahead, the husband isn’t worth it. However, the wife was deperate to go ahead and left saying she would do so. No charge was made for the interview.

So far so good. However, things then started going seriously wrong:

  • It would appear there was no attendance note. For a 15 minute meeting that was understandable but not very clever, and probably reflected the solicitor’s inexperience.
  • Bevan Ashford sent a fax to the husband’s solicitors saying the wife would be going ahead, “having taken advice from them as to the consequences”. In fact the consequences had hardly been discussed.
  • A few days later the wife had a meeting in Bevan Ashford’s larger Exeter office with an associate who witnessed her signature to the charge and other legal documents, and certified that she had “had the consequences of the deed explained to her by a solicitor… and understood its meaning and effect.”  The associate had (it appears) not explained this himself – he relied on the advice given in Tiverton. And he hadn’t seen a note of this because there wasn’t one. He didn’t notice that the amount covered had gone up from £200,000 to £860,000. And he didn’t raise a bill either.

The rest of the sorry tale is rather inevitable. The husband had not stolen £860,000 as he had said but more than £2,000,000 and was inevitably prosecuted and sent down for 6 years. The parties divorced. The victim enforced the mortgage and the house was sold. So the wife sued the solicitors.

Now when the case came on for trial in Bristol there was the first bit of good news for Bevan Ashford – the Judge stopped the trial on the first day after hearing the wife’s evidence and dismissed the claim, saying there was no case to answer.  The initial advice was all you would expect in a 15 minute free interview and if the wife had wanted more she should have come back later for a proper appointment.  And no advice was given at the Exeter meeting. So the case failed.

However the Court of Appeal had a different idea and in December 2011 they allowed the appeal and ordered a retrial before a different judge.  So they all go back and the matter continues. Because the defendants  did not get as far as giving evidence the conclusion had to be tentative on the facts, and there wasn’t enough to make a final decision. The cost of two trials and a visit to the CA won’t be cheap to whoever loses in the end.

The CA made some pretty obvious comments:

  • Once a solicitor accepts instructions they have to do a proper job, whether there’s a fee or not.
  • If a solicitor certifies that somebody understands a transaction then they either have to explain it themselves or be satisfied that somebody else has done so, and the Exeter associate seems to have done neither.
  • There is little point in just telling a client not to enter into a transaction. You have to explain why not, and what will happen if they do. And in this case it should only take a moment for a solicitor (although perhaps not a newly-qualified one) to see that if somebody has stolen as much as £200,000, let alone £860,000 (or £2m) then they are going to be prosecuted even if they give it back.  So it was a scheme that was doomed to failure , however much the wife loved her husband at the time, and if she had been told this she would probably not have gone ahead.
  • And if a solicitor can’t give a client adequate advice they mustn’t certify they have, or they take the consequences.

So the case goes back for a retrial, or negotiation. And what can we learn, in addition to the CA’s points?

  • That  newly qualified solicitors know a lot of law and little of life, and are dangerous (even if “very gentle, and young” as the wife described her here.)
  • And that independent advice of this sort is serious work that needs doing properly, and at a fee that reflects the risks.

But most of all, that it doesn’t matter what happened, what matters is what you can prove happened. If you make and keep a good note then it is still there 8 years later when the oral witnesses have forgotten everything. And although one must always tell the truth, do remember that Winston Churchill said that he would come out of the history of the war very favourably because he would write the history of the war, and there must be some of that in all of us.

The case is Padden v Bevan Ashford [2011] EWCA Civ 1616.

 

Written by Coventry Man

23/01/2012 at 19:05

Do you need to be an expert to argue about wills?

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Civil litigation is a funny business. In some ways it is all “litigation”, and a litigator is as different from a non-litigator as a toaster is from a fridge.  It is all about making, or defending, claims and involves courts, threats, steely nerves and the management of risk.

Yet it also has its distinctions, and we would naturally describe ourselves as personal injury litigators, or property litigators; we all realise that the law is too big to know all of it, and we have all been told that Dabbling is Dangerous (even if we don’t always believe it).

This is all very well. Niches are good – you do things you are good at, you attract clients who need this sort of thing, you charge a premium price for a premium product, and you win more often than not, so the clients are happy. However, what happens if your niche closes down? There used to be a steady trade  for people with nice round hands who wrote out deeds on parchment, and there had been for hundreds of years. Or had skill in looking after horses. Then along came the typewriter, or the motor car, and goodbye niche.

This sort of thing has been happening to litigators over the last few years. Out here in the Midlands there is an awful lot less litigation going on than there used to be before the banks tried to take us all over the cliff with them. First the market in disputes between businesses fell away, as everybody decided they just couldn’t risk the cost of fighting, then the remaining pools of Legal Aid dried up, and personal injury work isn’t what it was, with portals, protocols, and talk of fixed costs and the end of the CFA as we knew it. Litigators are scratching around.

One of the few growth areas is Contentious Probate – arguments about wills, trusts, executors, Inheritance Act claims and so on.  This has the major advantage that clients only show an interest when there is a serious amount of money at stake. They only discover a liking for Great Aunt Alice once they find that she is worth the odd £100k or two. They rarely feel it worth while arguing that as a point of principle they should get a half share in her dog and its basket, unlike a lot of the other possible areas such as matrimonial law, or claims against the police, where clients ride their principles up and down all day with little regard for how the humble lawyer is to get fed. No, this looks much more promising.

And all the evidence seems to show that there are more of these arguments about. I’m not sure whether it is because times are hard and people turn to arguing with their families to make ends meet, or that it has become fashionable, like whiplashes were, or it’s a spin off from the Ilott v Mitson case which said that adult children are entitled to claim under the Inheritance Acts. But it is clear to see in the figures.

So lots of worried litigators jump on the band wagon. This new area can’t be that difficult, can it? Well here are a few unusual features that you don’t get elsewhere:

  • All parties thinking they know all the other parties, but not always being right;
  • Actions with 30 parties, including minors, people under disabilities, and cousin Frank in Vietnam, all of whom may need to be served;
  • A chance to get a statement from the person who drafted the will under a Larke v Negus request;
  • Caveats, Warnings and Appearances, dealt with in Leeds;
  • Statements of Testamentary documents;
  • No default judgements or summary judgements, but a chance to proceed with written evidence to proof in solemn form;
  • Substantial chances of winning and not getting your costs, or losing and not having to pay any, or sometimes losing and getting the costs paid out of the estate;
  • And clients who might be worth a fortune if they win, or nothing if they don’t and can’t afford to pay the cost as it goes, and who are extraordinarily difficult to get covered by ATE insurance.

Then you add counsel whose clerks assure you have done lots of this but turn out to know no more than you, and District Judges who handle 3 cases a year (or, more scarily, 3 a day) and ask whether you would like the “usual directions.” And having to administer the estate if you win.

Clients who come in looking for a windfall, and having convinced themselves that they are entitled to it, are very upset if things go wrong, and explaining that all litigation is risky, or the judge had a bad day, rarely cuts the mustard. They expect either success, or a good compromise, or early advice that they aren’t going to get anywhere and should save their efforts for the next great aunt. And in all fairness, this is what they ought to be getting. You don’t rate a dentist who embarks on extensive root-canal work when he really ought to tell you to get the thing pulled out; you feel let down.

No, clients, not unreasonably, expect you  to know what you are doing. You need a private client colleague who deals with the administration, access to expert counsel for an early advice and the trials, and a detailed knowledge of the (odd) procedure and the law. You need to know the courts to go to and those to avoid like the plague. You need to cultivate specialised funding that can only come with a track-record. You need to know those of your opponents who know their onions, and those who are cabbages. And you need to pick your clients, pick your cases, and pick your fights.

Like anything else really. Don’t Dabble. Unless you want to help the swelling numbers in the next popular field – making professional negligence claims against solicitors.

Written by Coventry Man

16/09/2011 at 09:55