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Ground Rent escalation clauses in residential Leases-was my solicitor negligent?

Ground Rent Doubling Every 25 YearsThere has been recent publicity about Ground Rent escalation clauses in residential Leases and the shocking impact they can have if the escalation is too rapid, often with ground rent doubling every 25 years. Some home owners have found that their otherwise standard Leasehold property has a hidden time bomb in a ground rent review clause, which often doubles the rent after a specific period or at set periods throughout the term of the Lease.

Although these clauses will often appear quite innocent and may be included in standard Leases produced by reputable property developers, they can on close examination be seen to be more sinister and can cause all kinds of problems, particularly later during the rest of the term of the Lease.

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Ground Rent Doubling Every 10 – 25 Years?

It is known that many properties have been sold on a leasehold basis with automatic doubling of ground rent at intervals of 25 years and even every 10 years. A ground rent of £250 per annum, which doubles every 10 years, would be £64,000 per annum after 80 years. The rate of increase even over the first 30 years is 800% and would clearly far outstrip any inflationary increase which these clauses purport to cover. The freehold reversion may be sold on by your reputable property developer to an investor who is only interested in the maximum return on his investment.

Whether the ground rent doubles every 25 years or 10 years, it can have serious implications for the leaseholder.

Should I have been advised against the ground rent increase clause?

In the first place any increase in rent in a Lease has to be looked at carefully. Rent review clauses are not uncommon but automatic stepped rent increases have to be checked carefully by your solicitor or other legal adviser, in case the stepped increases are unfair or unreasonable throughout the term of the Lease.

Ground Rent Doubling Every 25 YearsA Clause which automatically doubles the rent or ground rent every 25 years is capable of operating unfairly and so is one of those clauses which your Solicitor ought to be checking for you and bringing anything unusual or onerous to your attention. If the rate of increase is high or the dates of the stepped increases are too short these should be brought to your attention. A doubling of ground rent several times during the course of a Lease is clearly something that a Solicitor ought to bring to your attention and if this is unusual or onerous in the context of your Lease this should also be pointed out.

One of the problems that Leaseholders have been facing is in respect of the current and future marketability and value of their Leasehold interest. If a clause in your Lease is onerous it could impact upon your ability to sell your property or recover the correct price as a discount may be sought by your Buyer. Further down the line a higher ground rent can impact upon the relative valuations of the leasehold and freehold interests in the property. The higher ground rent increases the value of the freehold reversion as an investment. The higher the freehold reversion is valued as a proportion of the overall property value, the lower the leasehold value may be.

In a residential lease of say 99 years, as the term runs through, the value of the leasehold interest generally reduces and most residential leases of 60 years or less are not considered good marketable title, without exercising any right to extend the Lease. ( some Mortgage Companies require even a longer term remaining and Leases of between 60-70 years remaining require particular care).When a Lease extension application proceeds the premium payable to the Landlord for the extended Lease might increase as the length of the remaining term decreases. The amount payable to the Landlord for the extended Lease may also be affected by the ground rent review provisions in the Lease( if the ground rent is capitalised as part of the valuation exercise), potentially leaving the Leaseholder, with a ground rent escalation clause, with a substantial loss. We are Solicitors and are not qualified to give valuation opinion. These comments are just general indications of some of the risks relating to short residential leases. We always advise Clients to obtain professional valuation opinion on these matters.

The amount of the ground rent at any given time can also be relevant to the statutory provisions affecting the Lease. There are provisions (for example, relating to Assured Tenancies under the Housing Act 1988), which apply to residential tenancies where long leases at a low rent are excluded. If the automatic doubling of rent over the term of the Lease brings the ground rent above any particular threshold set by the legislation then the statutory provisions can have a different impact on the Lease and potentially cause the Leaseholder a loss. The exact impact would depend upon the individual Lease and the circumstances of the property, the specific legislation concerned and whether the low rent provision was subject to periodic increase by statutory instrument. In these cases, once the potential legal implications can be established, it would be necessary to obtain expert valuation evidence to determine any adverse impact upon the value of your Lease.

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Everything explained fully so as to be easily understood.

Many thanks for your superb service. You gave me an understanding of everything you did. I was kept fully informed of your progress at every stage of the proceedure. Your advise and support was of a very high standard. Many Thanks.”

Mrs N, Durham.

Take action now – we are specialists in this area.

If you believe that you have suffered a significant loss or damage at the hands of your solicitor as a result of buying a leasehold property with a ground rent escalation clause then it is best to seek advice as you may wish to sue your solicitor for negligence, but may also be fearful of going up against a legal practitioner. For example, their insurance will often allow for an expensive legal team to assist them as a defendant. Such legal assistance will also be well-versed in the defences used when a solicitor is sued for negligence.

At Matthew Wilkinson Solicitors, we have a wealth of experience to draw from that will help conciliate this possible advantage. Matthew Wilkinson himself has nearly 30 years’ experience with handling solicitor’s negligence claims and Matthew Wilkinson Solicitors frequently deal with cases of ground rent doubling every 25 years or less.

Make A Free Enquiry Now!

With most legal matters It is better to take action sooner rather than later. We know that contacting a Solicitor can create anxiety itself, which is why you can contact us without any obligation or cost.

Call us on 0800 043 9981 or dial 0333 577 0172 if calling from a mobile.

complete a free online enquiry or contact us via email on enquiry@matthewwilkinson.co.uk we’ll have a no obligation chat with you about what you need and what you hope to achieve. We’ll happily answer any questions or queries you have and give you advice on how to progress your matter.

You can be sure if you contact us that whatever you ask us to do for you will be handled professionally and efficiently, so you can get the best outcome possible without any of the hassle.

1. The Obvious Problem

Increased Court fees create a potential barrier to access to justice and increases the costs and risks of litigation. This is as obvious as it is unattractive.

When the Government, after a short round of consultation, introduced massive increases in Court fees on the 9th March 2015, there were many protests on the grounds of affordability and access to justice. Looking at the large personal injury litigation market, the Government’s position appeared to be that cases were often run and funded by lawyers and that Clients’ were likely to be insulated from the effects of the increases by the lawyers and funders, with the loser’s Insurers ( Liability or ATE Insurers on either side of the industry) picking up the ultimate cost of the increased Court fees.

However, there seemed little thought for the effect on Commercial and Professional Negligence Litigation. For example, because Court fees were now set at 5% of the claim value ( subject to a maximum of £10,000), a small business, where its main customer defaulted on a £100,000 contract, would have to find a Court fee of £5,000 out of its depleted revenue, to issue any Court proceedings. The fee would rise to £!0,000 if the claim was for £200,000 or more.

Likewise, a Professional Negligence Claimant is unlikely to find such favourable funding terms as are available in the personal injury market, not least because of Qualified One Way Cost Shifting (QOCS), which means that in most personal injury cases the losing Claimant is not liable for the Defendant’s costs. QOCS does not apply to Professional Negligence or Commercial claims and the Claimant has to find funding for his own costs and disbursements and the potential liability to pay the Defendant’s costs.

The burden of funding disbursements such as Court fees was not felt to be too burdensome prior to the Court Fee increases as the fees were quite modest. However, when a Court Fee rises from a few hundred pounds to a few thousand pounds it changes everything. The Client may not be able to raise the funds to pay the fee and the Lawyers may not be able to fund it from their own resources, as the total outlay would become unmanageable, once a few claims had to be issued at Court. There is a funding solution for acceptable cases, which involves the provision of credit for Court fees being provided by a Third Party Funder.

However, the cost of the credit is quite expensive and can burn a further hole in any damages once any Success Fee and ATE premium have also been deducted from the damages. Some might say that the Claimant has still got access to justice and is simply sharing the cost of going to Court with the deductions from his damages. However, there is a risk that some genuine cases will not have any funding available for the Court fees and this could become a serious obstacle to access for justice.

In our firm we specialise in professional negligence claims against Solicitors and other Lawyers and the new Court fees do present a new challenge and must be managed in each case depending on the circumstances. However, we are committed to finding an acceptable funding solution in each case so that our Clients can still proceed to litigation and sue their Solicitor or other Lawyer, if this becomes necessary.

After all we share a common interest in being able to proceed with meritorious cases as our business depends upon it.

2. The Hidden Problems

However, there are deeper and darker problems, caused by the huge hike in Court fees.

A Defendant can now sit back and dare a Claimant to risk issuing proceedings and sue their Solicitor in the knowledge that the Claimant will have to put a large sum of money down as the Court fee just to start the process. Professional Negligence Defendants already often deny claims in the hope that claims will go away and the large increase in Court Fees is only likely to increase the use of this tactic.

A further problem arises with the rules as to statements of value when proceedings are issued. The rules state that the Claimant has to state whether the claim exceeds the small claim limit of £10,000 or the fast track limit of £25,000 or does not know. For example, a claim for £15,000 should say that it exceeds £10,000 but is less than £25,000. However, this is only relevant for allocation of track and not the Court fee. The claim has to be limited to a specific Court fee band to benefit from that fee otherwise it is treated as unlimited and the full £10,000 Court fee is payable.

It was thought by some that even if a higher value was known or suspected, that a claim could be limited to a lower value and the Court fee paid for that limit, which could then be increased if the additional Court fee was paid. This was helpful for claims which had to be issued quickly for limitation purposes, where the value was uncertain or it was not known whether the proceedings would be required. However, on the 21st December 2015 in Richard Lewis v Ward Hadaway 2015 EWHC 3503(Ch) High Court Deputy Judge Mr John Male QC decided that it was an abuse of process for a Claimant’s Solicitor to deliberately limit a claim to a lower value than its true value and although it was not fair to strike the claim out for abuse of the Court’s process, he entered summary judgement for the Defendant, on the grounds that the proceedings were not valid, as they had never been started in time for the limitation date for the case. This was because when they had been issued by the Court the wrong Court fee had been paid and where this error had been an abuse of process the proceedings had never actually been validly commenced!

This does appear to be a very harsh decision but a close reading of the case itself shows that this particular Solicitor had been warned previously about issuing proceedings with the wrong statement of value. On that basis it may have been fair to strike the claim out as an abuse of process and certainly after reading the case I had less sympathy for the Claimant’s Solicitor, but the poor Claimant was left losing the claim ( and there were several Claimants’ cases effected by this decision)and they may now have to investigate a Professional Negligence claim against their own Solicitor.

The Judge’s grounds and reasons for refusing to strike out the claim for abuse of process and instead to enter summary judgement for the Defendant in Lewis v Ward Hadaway do not sit comfortably with my sense of justice and I would not be surprised to see the Claimants appeal this decision, although the Defendant could also appeal the refusal to strike out the claim for abuse of process.

The end result at the moment is entirely unsatisfactory. It leaves great uncertainty and difficulty with regard to the process of issuing proceedings, particularly where there is any doubt or uncertainty as to the value of the claim. It will encourage Defendants to challenge established proceedings on the alleged grounds that the proceedings are a nullity because an incorrect value had been given at the outset and therefore the correct Court fee had not been paid. It will demand great care and attention by Claimant’s Solicitors at the point of issuing proceedings to ensure that they comply with the rules of Court as currently interpreted.

We are well aware of these potential problems and our understanding of the current interpretation of these rules by the Court will ensure that our Clients are protected as much as possible in any proceedings which we instigate when we sue Solicitors or other Lawyers.

There could be some cases of litigation where Claimant’s Solicitors blatantly ignore this interpretation and have cases struck out or lost as a result of the incorrect value statement being used. There also may be many litigation cases where Claimants are represented by Solicitors who are oblivious to these developments and risk a finding that the incorrect Court fee was paid. Although, if the Solicitors were not aware of the problem, there may be less chance of a finding of abuse of process, there is still the chance that the Court could find that there had been an incorrect statement of the claim’s value, which had been done deliberately to keep the Court fee down and that this was enough for the actions to constitute an abuse of process, so that the claims are lost, either as a result of summary judgement being entered or a strike out of the claim. In all of these cases the Claimants will need to investigate whether they have a Professional Negligence claim against their own Solicitor for the way that the statement of value has been completed at the time that the proceedings were issued.

Matthew Wilkinson Solicitors Limited are experienced in pursuing professional negligence claims involving claims struck out or lost as a result of the negligence of previous Solicitors or other Lawyers and will be pleased to assess any such claims for no win no fee funding.

Matthew Wilkinson 12th January 2016

What Next ?

With most legal matters It is better to take action sooner rather than later. We know that contacting a Solicitor can create anxiety itself, which is why you can contact us without obligation.

Call us on 0800 043 9981 or dial 0333 577 0172 if calling from a mobile.

complete a free online enquiry or contact us via email on enquiry@matthewwilkinson.co.uk we’ll have a no obligation chat with you about what you need and what you hope to achieve. We’ll happily answer any questions or queries you have and give you advice on how to progress your matter.

You can be sure if you contact us that whatever you ask us to do for you will be handled professionally and efficiently, so you can get the best outcome possible without any of the hassle.

Even though part of a solicitor’s job is to sue, it does not make him or her immune from being sued in their professional capacity. A solicitor can be sued for negligence just like any other professional person and professional negligence cases are actually fairly common. Whether you can sue your solicitor for negligence will depend on a variety of factors. We will explore those in this article and also provide examples of solicitor negligence.

“Matthew Wilkinson gave a superb service in bringing a very complicated negligence case to a conclusion. I was able to speak with him promptly on every occasion. Personally I would not hesitate in recommending his services.

Thank you!”

Mr F, Cambridgeshire.

If you need help with a solicitor negligence claim, please call us as soon as possible on 0800 043 9981 or dial 0333 577 0172 from a mobile or complete our Free Online Enquiry and we’ll be happy to have a no obligation chat with you and explain your legal rights and options.

Establishing your solicitors negligence – duty of care.

In legal terms, for someone to be liable for negligence, a ‘duty of care’ must first exist. There are certain special relationships that the courts recognise as having a duty of care present and the solicitor and client relationship has been established as one of these. The next thing that must to be examined when looking at whether you can sue your solicitor for negligence, is if there has been a breach of the duty of care that a solicitor has for their clients.

For example, your solicitor may have missed a crucial court deadline to the detriment of your case. Or perhaps when acting on the purchase of your property they have failed to advise you about missing permissions or consents or something else adversely affecting the title. (i)

“More than capable, thorough and well researched, dedicated towards achieving the desired result – from start to finish. A light of hope in a dire situation.”

Mr K, Sheffield

Establishing loss or damage caused by your solicitor’s negligence.

Next to consider is whether you, the solicitor’s client, have suffered loss or damage as a result of your solicitor’s breach of duty (should one exist). Since you have found your way to this article, you may have already pondered this.

It is important to note that the standard of care that the courts hold solicitors to is slightly different to the general standards of ‘the reasonable person’.(ii) This standard is that of a reasonable person with the same skills or expertise, which was established in the case Bolam v. Friern Hospital Management Committee (1957). (iii)

Establishing the loss was caused by your solicitors negligence.

Finally, the loss or damage incurred must have an established chain of causation from the act(s) considered a breach of duty, which includes establishing that the damage suffered must not be too remote from the purported negligent act(s).

It is up to the claimant (specifically, the legal team representing the claimant) to prove what was most probable, except where the acts of third parties would have been involved, had the correct advice been given, in which case, the Claimant has to establish that he had a significant chance that the third party would have acted in a particular way. The latter test is used in many situations but the most obvious one is a complete loss of chance claim, for example in a litigation claim lost through the Solicitor’s negligence, the Claimant can sue the Solicitor for the lost chance that he could have won the case had he not been prevented from doing so by the Solicitor’s negligence.

Taking advice about suing your solicitor for negligence.

If you believe that you have suffered a significant loss or damage at the hands of your solicitor then it is best to seek advice as you may wish to sue your solicitor for negligence, but may also be fearful of going up against a legal practitioner. For example, their insurance will often allow for an expensive legal team to assist them as a defendant. Such legal assistance will also be well-versed in the defences used when a solicitor is sued for negligence.

At Matthew Wilkinson Solicitors, we have a wealth of experience to draw from that will help conciliate this possible advantage. Matthew Wilkinson himself has nearly 30 years’ experience with handling solicitor’s negligence claims and Matthew Wilkinson Solicitors deal with cases of this specialism on a daily basis.

If you have not suffered a significant financial loss you may, in the first instance, take up your complaint directly with the solicitor concerned and this may be all that is needed to resolve the issue. Your solicitor should also remind you of the Legal Ombudsman’s services at this point. If your complaint is not dealt with satisfactorily by your solicitor, the Legal Ombudsman may be your next port of call. Please be aware that awards from the Legal Ombudsman are generally quite modest and often will not cover your financial losses. If you accept the decision the Legal Ombudsman makes then you cannot bring to court a claim in negligence on the same set of circumstances. You are welcome to contact us to seek advice on whether the Legal Ombudsman’s service is the best route for you.

The most common areas of solicitor’s negligence cases we have seen over the years are Property and Conveyancing and all types of Litigation , however we have experience of handling claims in nearly all types of Solicitors’ and Lawyers’ work. We understand how these types of cases can be overwhelming in themselves, without having to endure the negligence of a solicitor, on top of everything else. Call us today on 0800 043 9981 or dial 0333 577 0172 if calling from a mobile, for a no-obligation discussion of your case.

What next ?

With most legal matters It is better to take action sooner rather than later. We know that contacting a Solicitor can create anxiety itself, which is why you can contact us without obligation.

Call us on 0800 043 9981 or dial 0333 577 0172 if calling from a mobile.

complete a free online enquiry or contact us via email on enquiry@matthewwilkinson.co.uk we’ll have a no obligation chat with you about what you need and what you hope to achieve. We’ll happily answer any questions or queries you have and give you advice on how to progress your matter.

You can be sure if you contact us that whatever you ask us to do for you will be handled professionally and efficiently, so you can get the best outcome possible without any of the hassle.

i)For further examples of solicitor’s negligence claims, please see the tables on the following pages:
http://matthewwilkinson.co.uk/solicitors-professional-negligence-claims/ and http://matthewwilkinson.co.uk/lawyers-professional-negligence-claims/
ii) Hall v. Brooklands Auto-Racing Club (1933) 1 KB 205(CA)
iii)Bolam v. Friern Hospital Management Committee (1957) 1 WLR 582 (QBD): Precedent for the standard of care for ‘professional or skilled’ defendants (trained or experienced in a specific area).
iv)Legal Ombudsman, What problems we can help resolve, http://www.legalombudsman.org.uk/faqs/

30 Sep / 2015

Litigation Solicitor Middlesbrough.

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Immediate Vacancy-Litigation Solicitor for Professional Negligence Claims required in Middlesbrough.

We are looking for a motivated and energetic LITIGATION LAWYER with a good academic background. An eye for detail and a real sense of justice are essential. The individual must be able to work in a team and have great Client Care, Risk Management and Business awareness. Previous Litigation experience is required, (NQ or part qualified with good credentials and litigation experience considered).

We are a niche Professional Negligence practice, specialising in claims against Lawyers and we are looking for a new addition to our team. We are based in MIDDLESBROUGH in the North East, which is a great place to work. Basic legal knowledge and litigation experience more important than professional negligence experience as in-house training and supervision will be provided.

This is a unique opportunity to join a niche practice helping real victims of Lawyer’s negligence from all around the country, working from a base in the North East of England.

Please send your CV and covering letter to matthew_w@btconnect.com

MATTHEW WILKINSON SOLICITORS LIMITED

What Next ?

With most legal matters It is better to take action sooner rather than later. We know that contacting a Solicitor can create anxiety itself, which is why you can contact us without obligation.

Call us on 0800 043 9981 or dial 0333 577 0172 if calling from a mobile.

complete a free online enquiry or contact us via email on enquiry@matthewwilkinson.co.uk we’ll have a no obligation chat with you about what you need and what you hope to achieve. We’ll happily answer any questions or queries you have and give you advice on how to progress your matter.

You can be sure if you contact us that whatever you ask us to do for you will be handled professionally and efficiently, so you can get the best outcome possible without any of the hassle.

04 Sep / 2015

What Does ‘Time Barred’ Mean?

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What Does ‘Time Barred’ Mean?

If you have discovered that a claim your solicitor was pursuing on your behalf has been ‘time barred’, you may be wondering what this means, exactly, and where to go from here. Put simply, it means that the time permitted to bring forward the issue has passed and it is no longer possible to pursue the case against your opponent.

This occurs when a fixed amount of time has passed and depends on which area of law the case is founded upon. The time limits are stated in The Limitation Act (1980), which is used as a defence when a case is brought against the Defendant, should it be relevant in terms of time elapsed. This is why you might have heard it referred to as a ‘limitation’ defence. Sometimes, time barred cases may also be said to be ‘statute barred’, which relates to it being time barred under the Limitation Act (1980), which is the Statute of Limitation. Should The Limitation Act (1980) not cover the time limit for a particular type of case then alternatively the courts may set the length of time.

At Matthew Wilkinson Solicitors, we specialise in claims against other solicitors. We deal with a lot of time barred claims. If your claim is time barred, please contact us urgently. Please call us now on 0800 043 9981 or dial 0333 577 0172 if calling from a mobile or complete a Free Online Enquiry and we will soon be in touch.

“I recommend Matthew Wilkinson Solicitors to anyone who has a claim against another Solicitor. In dealing with obdurate Professional Indemnity Insurers they are very skilled, experienced and tenacious. First Class.”

Mr H, Somerset.

When does time start in a time barred claim?

The point in time that the countdown may start depends upon the type of case. In negligence cases it is often when the action first caused damage, or may be when the Claimant first has knowledge of certain facts including the damage. Further complexities mean that it is best to seek legal advice from a trusted, qualified professional.

If you have a claim against an opponent, a time limit in which to bring it may seem unfair. It exists because the law attempts to account for competing public interests. The law allows for access to justice so that claims can be made, but also acts in the interest of all of us being free of indefinite claims arising from any particular event. The lawmakers’ assessment is that finality of proceedings is for everyone’s overall benefit, so a time limit needs to be established. As these time limits are part of our general law, your Solicitor is expected to be aware of them and is under a duty to advise you about them so that your action can be brought in time.

Was your solicitor negligent with your time barred claim?

If your solicitor has negligently lost your claim through having it pronounced ‘time barred’ or ‘statute barred’, or you have found that you can no longer pursue an action because of your Solicitor negligently causing such a ‘limitation defence’ to arise, you probably find yourself frustrated with this injustice. If your case otherwise had significant potential, even if some elements were not very strong, you will be relieved to know that it is possible to make a successful claim against your solicitor. The same is true if you are a Defendant and you had the benefit of a limitation defence available to you but it has not been raised in time by your Solicitor, causing you to lose the defence.

“I am very pleased with the service received from Matthew Wilkinson.

I was informed through the process about the different options available for me and this enabled me to make an informed decision. I could not have got a better outcome! Many Thanks.”

Mr E, London

Perhaps they failed to interpret The Limitation Act correctly or maybe they missed a crucial deadline. Whatever the reason, you are within your rights to seek advice on finding an appropriate remedy. Such advice should be sought sooner rather than later to ensure that time is on your side.

Choose a specialist to help you with your time barred claim.

In order to give your claim the best chance of success, it is essential that when selecting a new solicitor to act on your behalf that you choose one with a wealth of experience in winning solicitor’s negligence cases for their clients. When making your selection, it is also helpful to look for those whose process can minimalise, as much as possible, any stress involved for you. This is something you can also expect from a more experienced solicitor’s negligence specialist firm such as Matthew Wilkinson Solicitors.*

*Matthew Wilkinson Solicitors have decades of experience in pursuing these claims, including many successful claims arising from actions, which were time barred as a result of their previous Solicitor’s negligence.

What next ?

With most legal matters It is better to take action sooner rather than later. We know that contacting a Solicitor can create anxiety itself, which is why you can contact us without obligation.

Please call us now on 0800 043 9981 or dial 0333 577 0172 if calling from a mobile or complete a Free Online Enquiry and we will soon be in touch.

“I was very satisfied with your service! Thank you very much for what you have done for me, I would recommend you to anyone without a doubt!”

Mr M, Southampton

complete a free online enquiry or contact us via email on enquiry@matthewwilkinson.co.uk we’ll have a no obligation chat with you about what you need and what you hope to achieve. We’ll happily answer any questions or queries you have and give you advice on how to progress your matter.

You can be sure if you contact us that whatever you ask us to do for you will be handled professionally and efficiently, so you can get the best outcome possible without any of the hassle.

2014 Global 100 Awards Winner: We are proud to announce that we have been appointed winners in the Global 100 Awards 2014 and have been successful as the winners of the award for ‘Law Firm of the Year-Professional Liability-United Kingdom’.

What Next ?

With most legal matters It is better to take action sooner rather than later. We know that contacting a Solicitor can create anxiety itself, which is why you can contact us without obligation.

Call us on 0800 043 9981 or dial 0333 577 0172 if calling from a mobile.

complete a free online enquiry or contact us via email on enquiry@matthewwilkinson.co.uk we’ll have a no obligation chat with you about what you need and what you hope to achieve. We’ll happily answer any questions or queries you have and give you advice on how to progress your matter.

You can be sure if you contact us that whatever you ask us to do for you will be handled professionally and efficiently, so you can get the best outcome possible without any of the hassle.

09 Sep / 2014

UK Professional Liability Law Firm of the Year

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2014 ACQ Global Awards Winner: We are proud to announce that Matthew Wilkinson Solicitors have been selected as the Winner of the ACQ Global Award 2014 in the category ‘UK Professional Liability Law Firm of the Year’.

What Next ?

With most legal matters It is better to take action sooner rather than later. We know that contacting a Solicitor can create anxiety itself, which is why you can contact us without obligation.

Call us on 0800 043 9981 or dial 0333 577 0172 if calling from a mobile.

complete a free online enquiry or contact us via email on enquiry@matthewwilkinson.co.uk we’ll have a no obligation chat with you about what you need and what you hope to achieve. We’ll happily answer any questions or queries you have and give you advice on how to progress your matter.

You can be sure if you contact us that whatever you ask us to do for you will be handled professionally and efficiently, so you can get the best outcome possible without any of the hassle.

In Mitchell v News Group Newspapers Ltd 2013 the Client or the Solicitor potentially lost half a million pounds by a retrospectively imposed sanction for failing to lodge a document at Court within 4 days of the Court’s direction to do so, the failure not being excused by the intervening weekend! A robust decision! It was and remains harsh and unfair even though we would all hope that in similar circumstances we would have made a better attempt at compliance, how many other firms would have struggled to produce a half million pound costs budget within 4 days including a weekend?

In Denton etc. 4th July 2014 the Court of Appeal have in effect confirmed Mitchell but have provided further guidance, which has been said to change the emphasis from the interests of the administration of justice generally and compliance with rules (the factors a) and b) in Rule 3.9 as referred to in Denton) towards the interests of justice in the case, by stating that the former factors are not paramount (as stated in Mitchell) but are to be given ‘particular’ weight and all the other circumstances of the case including the interests of justice are also relevant.

Will this have any effect? The 3 stage test, which has been suggested does not give any confidence that a failure to lodge a document due to an oversight (no good reason), which had an impact in the case or the administration of justice (therefore significant) has a realistic chance of getting relief from sanctions, even if the opposite party will be laughing all the way to the Bank, at the unexpected windfall. The judiciary have been told to use ‘nuances’ and to judge each case on its own facts but if they still have to place particular weight on a) the importance of the efficient and proportionate conduct of litigation and b) compliance with rules and orders, will they not still uphold the rules and orders despite producing an unjust result?

In Mitchell the Judge had been particularly harsh in considering the significance of the breach when the time given to comply had been so unreasonable, bearing in mind the retrospective sanction she had in mind. True justice could have been achieved by imposing some other sanction, but she chose the full loss of costs recovery, applying CPR 3.14 by way of analogy. The Judge was also wrong in my view to state that the sanction in Rule 3.14 was mandatory, when it specifically says in the Rule that it applies, unless the Court otherwise orders. It was also unfair to use in her reasoning for refusing relief from sanctions that the breach had caused inconvenience to the Court and the administration of justice, because to grant relief from sanctions had necessitated a hearing taking up judicial time, which could have been used on other cases. If that reasoning were to be applied universally to cases where there had been a significant breach and there was no good reason, no one would ever get relief from sanctions in these cases unless the hearing could take place when the Judge would otherwise have been sitting idle! Although I sympathise with the asbestos Claimants whose Case Management cases could not be heard by the Mitchell Judge the logic of this reasoning completely defies me!

In Denton the Court of Appeal made it clear that Mitchell was right. In doing so it said that it was a case management decision and there were no grounds to interfere with it. With respect the two things are not entirely the same. Did this mean anything? It would be nice to conclude that the Court of Appeal had distanced itself from Mitchell but instead it has quoted the decision extensively and Denton etc. is really Mitchell revisited. Lord Justice Jackson was the dissenting minority in respect of the emphasis to be placed on the 2 factors a) and b) mentioned in Rule 3.9, which at least shows consistency, as in his Report he had favoured a specific reference to the interests of justice of the case in factor b) and the Rules Committee had rejected his draft preferring the specific reference to compliance with Rules and Orders. However, even Lord Jackson took the trouble to confirm that he did not disagree with the Mitchell decision, albeit on the basis that there were no grounds to interfere with it.

If you have not read Mitchell and Denton they are worth reading as there has been a slight shift in emphasis but Mitchell still holds sway. I believe that Mitchell amounted to a gross failure of our legal system to produce a fair and just decision, as demonstrated by the first 4 lines of this article! The position remains unsatisfactory. The Court of Appeal appears to want to retain Mitchell to support the foundations of the new post Jackson Reforms. It can be seen to have recognised some unfairness in decisions being made based upon Mitchell, but could be said to have applied blinkers when considering the patently unjust and disproportionate decision in Mitchell itself and cannot now resile from it. There was clearly scope for the Court of Appeal in Mitchell to underpin the Jackson Reforms with a robust precedent without leaving it as a jagged edge cutting into the principles of fairness and justice in our legal system.

There is no real indication or hope that the new Denton guidance would have produced any different result in Mitchell. It is still clear that it would be regarded as a significant breach made without good reason and the third stage balancing exercise is still weighted in favour of factor a) the importance of the efficient and proportionate conduct of litigation and factor b) compliance with rules and orders. The only hope we can have for the future is that, despite the straightjacket of Mitchell, the front line judiciary feel able to sense the nuances of the case and provide justice and do not impose unjust and disproportionate sanctions, whether in the name of promoting the proportionate conduct of litigation, compliance with rules and orders, world peace, or, any other generally desirable objective that might interfere with the true justice of the case.
Mr. M. B. Wilkinson BA MPNLA

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In Paul Dean Davies V Liberty Place (Sheepcote Street) Management Co (2014) Leggatt J found an apparently ingenious way to get round the obvious draconian effects of Mitchell (Andrew Mitchell MP V News Group Newspapers Limited 2013) by a simple but apparently logical maneuvre in finding that the Mitchell test did not apply if the sanction was conditional and had not yet been imposed. The Mitchell decision has been widely condemned as very harsh in imposing a robust enforcement of Rules and Orders and a strict interpretation of Rule 3.9, which prior to the recent Jackson Reforms to Civil Procedure had been used in a wide range of circumstances to obtain relief from a sanction imposed by the Court or the Rules. The message after Mitchell was do not breach Rules or Court Orders and do not expect to be excused if you are in breach unless the breach is trivial or you have a very good reason. However, simple errors or not planning workloads so that deadlines could be met was not a good excuse, even if the other side was not prejudiced and the sanction was unfair or disproportionate. The importance of the efficient and proportionate conduct of litigation and compliance with Rules and Orders could trump the unfairness to the defaulting party, even if their case was struck out or, as in Mitchell, he was denied the right to recover an estimated £500,000 in costs from the other side, if he won the case. The interests of the administration of justice generally were to be allowed to outweigh the interests of justice in the individual case. Davies was a case where the specific circumstances were familiar as Leggatt J was dealing with the late service of witness statements and the application of Rule 32.10 which states “If a witness statement is not served in respect of an intended witness within the time specified by the Court, then the witness may not be called to give oral evidence unless the Court gives permission.” This was the very rule in operation in the Denton appeal due for consideration by the Court of Appeal in the combined ‘Mitchell’ appeals. Leggatt J found in Davies that the Judge below was right to say that in applying Mitchell there would be no relief from sanction but went on to say that the Judge below had been wrong to find that Mitchell applied because it was not an application for relief from sanctions after all. On a true construction of the Rule 32.10 no relief was required until the sanction had taken effect, which would only be when a witness was unable to be called as a result of Rule 32.10. Accordingly a defaulting party did not have to apply for relief from sanctions but could simply apply for an extension of time prior to the time for the witness to be called, because the Rule itself offered a route for avoiding the sanction.
There is clearly a logical justification for this decision, as why else would the rule provide a route for escaping the sanction, if in every case an application for relief can be made, so this specific route must be something different, a consideration on different principles to Mitchell, perhaps akin to a normal application for an extension of time made in time?
However, although Mitchell clearly does not apply to applications for extensions of time made prior to default, the default in Davies had already occurred, even though it was before the sanction had impacted on the case or the defaulting party. When the reasoning in Davies is considered in more detail it sounds very much like a pre-Mitchell judgement with an appreciation of the 2-strike rule of thumb with applications for unless and debarring orders preferred to robust enforcement of the rules. Further, not all sanctions imposed by the Court have an immediate effect, such as the costs sanction in Mitchell itself, which would only have real effect in respect of costs recovery after judgement. In any event in Mitchell, like in Davies, the sanction in Rule 3.14 used by analogy, had the get out clause, unless the Court otherwise Orders. If Davies was right, by the same logic, the Mitchell decision would be different if the sanction had been imposed directly by Rule 3.14, rather than by analogy because it was the pilot scheme rules, which did not have a specific sanction. Despite the attraction of the result in Davies and its initial apparent logic, this decision may have been condemned to a short lifespan as it surely would not withstand close scrutiny of the higher judiciary unless Mitchell and the ethos of the Jackson reforms was to be diluted beyond recognition. Well, we know that this is not gong to happen and the Court of Appeal in the Denton, Decadent and Utilise combined appeals has confirmed Mitchell and provided further guidance on its interpretation. It is clear that there is no going back and Davies is surely sunk by the Denton appeal itself. This was an appeal against an Order granting relief from the sanction imposed by Rule 32.10 for the late service of witness statements and the Court of Appeal granted the appeal and therefore re-imposed the sanction in 32.10 because relief was refused under Rule 3.9. It could not really have done that if Rule 32.10 did not impose a sanction to which Rule 3.9 applied!! The Davies theory of Leggatt J was not however referred to in the judgement of the Court of Appeal, which could therefore lead to a somewhat brave attempt to apply the same argument in the future…..

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With most legal matters It is better to take action sooner rather than later. We know that contacting a Solicitor can create anxiety itself, which is why you can contact us without obligation.

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complete a free online enquiry or contact us via email on enquiry@matthewwilkinson.co.uk we’ll have a no obligation chat with you about what you need and what you hope to achieve. We’ll happily answer any questions or queries you have and give you advice on how to progress your matter.

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24 Apr / 2014

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We are proud to announce that we have been appointed winners in the Acquisition International Magazine M & A Awards 2014 and have been successful as the winners of the award for Northern Litigation Law Firm of the Year 2014.

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