Legal Watch - Property Risks & Coverage - Issue 4

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  • Legal Watch:Property Risks & CoverageApril 2014 - Issue 004

  • Events

    Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months:

    MBIG Seminar | 22.05.14 | Royal College of Physicians

    In This Issue:

    National Property Risks and Coverage Conference

    Welcome new colleague

    Mitchell so where are we now?

    Permission to withdraw or substantially amend

    admissions refused

    Net contribution clause effective limitation on

    liability

    Minor trespass did not justify a mandatory

    injunction

    Changes to court fees

    This month thanks go to Keith Gaston for his article Mitchell

    so where are we now?, to Alison Heard for her article on

    Co-Operative Group Ltd v Carillion & Vibropiling Ltd and

    to Christopher MacQueen for his article on StephenWest,

    CaroleWestvIanFinlay&Associates.

    Introduction

    Contact UsIf you would like any further information on the cases or

    articles featured in this edition, please contact:

    Keith Gaston

    T: 0844 245 4956

    E: keith.gaston@plexuslaw.co.uk

    Alison Heard

    T: 0207 469 6236

    E: arh@greenwoods-solicitors.com

    Christopher MacQueen

    T: 0207 469 6267

    E: cmq@greenwoods-solicitors.com

    Marise Gellert

    T: 0207 469 6249

    E: msg@greenwoods-solicitors.com

  • 03

    National Property Risks and Coverage Conference A final thanks to all those who supported our first National

    Property Risks and Coverage Conference held at the

    London Stock Exchange in April. The very positive feedback

    both on the day and subsequently, has been tremendous

    and demonstrates that there is a real appetite for this kind of

    high-level symposium in our sector. So, we are confidently

    looking forward to the second such event next year! The

    best way to assure an early allocation of space is to watch

    out for further announcements in this newsletter early in

    2015.

    Richard Houseago

    Head of Property Risks and Coverage

    Nathan RehbockNathan was admitted as a solicitor in Australia in 2006.

    In Australia, Nathan worked in a general insurance

    litigation practice and represented the interests of global

    insurers, Lloyds of London syndicates, large Australasian

    insurers, self-insured publicly-listed companies and local

    authorities across a number of sectors including building

    and construction, mining, claims against professionals,

    sporting and recreational claims, and claims resulting from

    catastrophic weather events. Nathan moved to London in

    February 2013 and has joined us after some time spent

    working in-house for an insurance services provider.

    Welcome new colleague

  • 04

    Everybody has heard about, and understands, the effect of

    theJacksonreforms but what about the Mitchelldecision in

    particular? Let us see.

    It is widely known that the Jackson reforms became

    effective on 1st April 2013 but one aspect of this is the new

    rules for costs budgeting. These are not an entirely alien

    concept after a widespread pilot scheme. However under

    the new rules it is a requirement under CPR 26.3(1) that a

    costs budget is filed at least seven days prior to a CMC or

    (if earlier) by the date specified on the notice of allocation

    (N149C). In Mitchell v News Group International [2013]

    EWCACiv1526theclaimantssolicitors failure to achieve

    this led to the automatic sanction that costs were disallowed

    save for court fees, an effective penalty of c.0.5m.

    However, the impact of the Mitchelldecision has gone far

    wider than this.

    For those who still hanker for practice pre-1999 the present

    climate must indeed be unsettling. Back then one could

    issue a Writ of Summons for 60, which could be served

    up to a year later. Quaint rules existed going back 200 years

    as to whether throwing a writ over a wall or at a defendants

    feet constituted good service. How things have changed

    whether entirely for the good is strictly speaking outside the

    scope of this article. What must be understood is that the

    effect of the new approach is to place new demands most

    immediately upon not just lawyers, but also witnesses and

    especially expert witnesses.

    The impact of this dramatic change of culture procedural

    compliance may ultimately impact most of all upon clients.

    Many institutional and corporate clients have some inkling

    that things have changed, but perhaps the extent to

    which this will impact upon them directly has not yet been

    sufficiently realised.

    The impact of this dramatic change of culture procedural compliance may ultimately impact most of all upon clients.Golden rules for lawyers and clients 1. The meaning of justice has changed. Justice is no

    longer between the parties - any impact upon the

    courts and hence other court users will be regarded as

    being of the utmost seriousness once you are under

    the relief from sanctions jurisdiction (CPRPart3.9(1)).

    Strict compliance with rules is now to be regarded as

    the paramount feature of the overriding objective.

    2. Take rules seriously gone are the days when directions

    were regarded as mere guidelines, and rightly so.

    3. Know when sanctions for the purposes of CPR 3.9(1)

    are applicable this is not restricted to orders which

    provide for a specific penalty such as unless orders.

    The dramatic effect of this was seen in recent costs

    decisions LongvValueProperties&Another[Master

    RowleySCCO13thJanuary2014]andWilliams&

    GeorgiouvWayneHardyt/aHardyBuilders[Master

    HurstSCCO2014]. In the Hardy case the Senior Costs

    Judge, Master Hurst assessed the receiving partys

    costs at nil following a failure to serve a Statement of

    Costs on time in advance of a Detailed Assessment

    hearing. What would previously have been regarded as

    insignificant breaches were held not to be minor and

    resulted in severe sanctions being enforced.

    Mitchell so where are we now?

  • 05

    this subject will remain an active feature of the litigation landscape

    4. Relief from sanctions is likely to be granted sparingly

    and certainly not routinely - generally only for causes

    outside the law firms control. But where such a cause

    is the client or an expert how will the jurisdiction be

    operated? Little authority yet exists, but it would be

    best to presume that such behaviour is unlikely to be

    regarded favourably.

    5. Even when there is no specified sanction, ensure that

    offices have systems with mutual cross checking.

    6. Plan ahead major directions such as disclosure,

    witness statements and experts reports require

    significant forward planning, often weeks and even

    months, even in relatively routine cases.

    7. Communication to and from clients and experts at the

    right stage is critical. Lawyers must give clients clear

    notice and an explanation of what is needed and when,

    and understand that they will have other pressures and

    priorities. Equally clients cannot hand litigation cases

    over to lawyers and expect to take no further notice.

    Clients must appreciate that it is in their own interests

    to provide necessary assistance, whether documents,

    witnesses or instructions in a timely manner.

    8. Instructions to experts and counsel should now specify

    the criticality of compliance. This must be understood

    and agreed, and experts especially must immediately

    make clear immediately if they are aware of any reasons

    whereby they cannot provide a report in time, or if

    instructions are in any way deficient.

    Where next?There is no doubt that courts have been overwhelmed in

    some instances by the numbers of applications made fol-

    lowing the decision in Mitchell.

    Certain judges have railed against the strictest of views,

    imploring parties to take a reasonable stance rather than

    seeking tactical benefit. Regretfully this has often been

    a forlorn hope and appears unlikely to change soon. In

    SummitNavigationvGeneraliRomania[2014]EWHC398

    (Comm)a party was criticised for having taken an unduly

    aggressive stance following another partys non-compli-

    ance. This decision appears to have been widely favoured

    from both claimant and defendant standpoints.

    Most significantly, the Civil Procedure Rules Committee

    has approved a Statutory Instrument due to come into

    force by early May 2014 enabling parties to agree a 28-

    day extension of time in most situations. This will provide

    some greater flexibility and, it is hoped, primarily will assist

    hard-pressed court offices and judges at first instance. It

    does not amount to a wholesale rewriting of the principles

    arising from Mitchell.

    The right approach to all parties will be to tighten up

    systems to ensure compliance and talk to your witnesses.

    To parties in default, the sooner you apply the better but if

    you receive a request for an extension of time it would be

    wise to appreciate the risks of taking an inflexible stance.

    Nevertheless, this subject will remain an active feature

    of the litigation landscape and further decisions will

    continue to be published. One might ask if in 1977 it