Stop the press
Compliance will be the watchword for 2014 and beyond. Adhere to deadlines/court timetables and all should be fine. Miss a deadline and you are in stormy seas. The cases which follow Mitchell v News Group Newspapers Ltd provide little comfort for errant lawyers. Persuading a judge that a default is trivial or arose for good reason will be uncomfortable and difficult.
While inconsistency remains, courts have seized the initiative and relief from sanction is being refused up and down the land. In our experience, judicial interpretation of what is “trivial” varies considerably and even modest delays are being sanctioned (41 minutes in one case).
Refusal to grant relief from sanction may not stop a claim in its tracks but it inevitably creates immense difficulties for solicitors, their clients and, ultimately, their insurers. Solicitors need to be wary and apply to the court before an unavoidable default. Tactical decisions to take issues rest with opposing parties. It is easy to envisage litigators “taking points” with Jackson to support their cause. The environment to do so is benign. Neither party will feel confident about the position a court will take. Next time the opponents may be in the firing line.
Co-operate? No, litigate!
Litigation is an adversarial process. However, it is possible to exercise a degree of co-operation in the conduct of claims. While this is envisaged by Jackson and the courts, it seems inevitable that as the stakes get higher, parties and their lawyers may be tempted to seek to capitalise on any perceived failings by opponents.
A trivial example perhaps, but it is not uncommon for firm rivalries to exist particularly where the firms are regularly on opposing sides. As such, should one firm take a “Jackson point” and refuse to co-operate? If this results in Mitchell outcome, it is not difficult to see the losing firm seeking revenge in the future. This may be one disappointing outcome, given the more conciliatory litigation environment that has developed since the CPR came in.
The rise of ADR, and mediation in particular, is likely to continue this year. Despite the gradual decline in the percentage of mediations resulting in settlement, parties and their lawyers refuse to engage in the process at their peril. Costs sanctions can affect ultimately successful parties. Lawyers who refuse offers to mediate (or who fail to respond to the offer) can expect little judicial sympathy.
One trend we have seen, “virtual mediation”, is increasing. Settlement does not arise on the actual day, but does so weeks, or sometimes months later, as part of an ongoing process. While it is not in anyone’s interest to delay settlement, sometimes it is not possible to achieve that in the finite time allowed for a face to face mediation. The post-mediation period is incredibly important and it is a required skill to maintain the impetus and engagement that the mediation process brings to disputes.
Recent experience suggests that the costs budgeting process is expensive, time consuming and, ultimately, a lottery. Some hearings feature costs management in only a cameo role (at a CMC before Christmas, after extensive preparation by both parties, we saw a court dispense with costs management entirely). In others it is the lead actor - this month, the bulk of a CMC was devoted to costs management, with budgets heavily reduced.
All that lawyers can do is prepare thoroughly. Failing to prepare is preparing to fail.
The hidden impact of cost budgeting is a concern for law firms’ insurers. Reduced budgets will need to be explained to clients, but the client will still require (and be entitled to) the same level of duty of care regardless of the cost budget. At present, we do not see courts factoring in the cost budget awarded by a court when assessing a later negligence claim and the conduct of a solicitor. In our view, however, it should do. This ties in with our article in this edition of Covernote, which looks at two recent claims against Eversheds and Raleys, and the court’s approach to the duty of care.
Silver lining or unintended consequences
It is easy to predict doom and gloom. Litigation is undergoing a period of intense change and uncertainty which is, inevitably, unsettling. As time goes on, it is to be hoped that there will be more clarity as courts and practitioners adapt to the new landscape resulting in a more streamlined and cost effective process benefitting lay clients and well organised lawyers. However, it is essential that courts are consistent in their approach and are resourced to keep up with the Jackson vision.
That said, there remains an air of unreality about the Mitchell decision. Client pressure on law firms to do more for less and the uncertain economic environment mean that there are wider issues putting strains on businesses and the ability to run (and resource) litigation in the way Jackson envisages. An unexpected result may be that many firms withdraw from offering litigation services as a result of the withdrawal of CFAs and their inability to comply with Jackson, or to do so profitably.