Legal Watch:Property Risks & CoverageApril 2014 - Issue 004
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In This Issue:
National Property Risks and Coverage Conference
Welcome new colleague
Mitchell so where are we now?
Permission to withdraw or substantially amend
Net contribution clause effective limitation on
Minor trespass did not justify a mandatory
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,
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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
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
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 
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
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
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?
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
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
(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