As has been reported this morning on BBC Radio 4 and in the press, a software glitch has come to light which it is said could affect as many as 20,000 couples who have sought or been awarded ancillary relief in matrimonial proceedings since April 2014. The glitch relates to the online version of Form E which is used by each party to provide asset details on which the financial settlement will principally be based. The glitch, which came to light only after some 20 months, results in liabilities not being netted off the asset figure. As a result, arrangements could have been agreed or ordered that would have been in a lesser sum if the software had performed correctly.
The issue only relates to divorcing couples who used the Ministry of Justice's online version of the form: if a paper or other electronic version was used, the figures should have been correctly calculated. This version of the form is not used in all cases.
HM Courts and Tribunals Service has issued a statement as follows: "We are urgently investigating this issue [and] are taking steps to rapidly identify cases where this regrettable error may have had an impact".
Clearly, there is a potential for claims to be brought against solicitors and barristers acting for divorcing parties who did not spot that liabilities had not been netted off. That said, it is a moot point as to whether a lawyer would be found to owe a duty to check calculations performed by software designed for the task unless the error was obvious. Cautious lawyers, if taking responsibility for putting together the financial information will no doubt have asked clients to check and/or confirm the calculations. But some lawyers may not have been so cautious, and so this issue will have to be looked at on a case by case basis.
What claims might arise out of the glitch?
Claimants can be inventive and imaginative in forming claims, but the obvious area where claims could come will relate to the increased costs of challenging "unfair" awards, and claims that parties have changed their position by being forced to sell assets to comply with "unfair" awards.
It seems to us that "Big Money Claims" which by definition result in the largest awards, are less likely to give rise to claims because the financial arrangements are more complex and often external financial advisers have been involved.
What steps should now be taken?
As we have said, the Court and Tribunals Service is taking steps to identify cases where the error may have had an impact. That will undoubtedly be a less than perfect process, and one that will take substantial time.
If you are concerned that within your firm there may have been clients which might have been negatively impacted as a result of the Form E glitch, you should review the relevant files as a matter of urgency. Given that it has been reported that the glitch was present for 20 months (and has now been corrected), cases where this specific online version of Form E will have been used prior to April 2014 do not need to be investigated.
Clients will no doubt start to make contact following the wide publicity of this issue, so firms should agree a collective response to be given to worried clients.
We expect that the Ministry of Justice will be in urgent communication with its IT providers. There is not the space in this briefing to consider what redress might be offered by or sought from the MOJ.
If you would like to discuss this issue further please contact the authors or your usual contact in the lawyers' liability team at Clyde & Co (please see regional contacts below). As with all issues which impact the legal profession and its insurers, we will continue to keep this issue under review.
The statement issued by the Government can be found by clicking here.