LITIGATORS – MISSED A DEADLINE? DON’T DIG BIGGER HOLES FOR YOURSELF: DIG YOURSELF OUT (WITH A LITTLE HELP FROM YOUR FRIENDS)

The decision in Wingate & Anor v The Solicitors Regulation Authority [2018] EWCA Civ 366 may well be Jackson L.J’s last judgment (certainly as a full time judge). It concerned the conduct of solicitors. I want to look at one aspect of that decision  in relation to an attempt to cover up a mistake. It is an opportunity to repeat, to some extent, what I have said in earlier posts about the need for candour and planning and not panicking when mistakes happen during the course of litigation.

THE ISSUE BEFORE THE COURT

One of thcases concerned the “backdating” of a form N251 by a partner in a major firm,  a Mr Malins.

THE FACTS
    1. John Malins was a partner in Bond Pearce LLP. He specialised in construction law. On 1st May 2013 that firm merged with Dickinson Dees to become a new firm, Bond Dickinson LLP. Mr Malins continued as a partner in the new merged firm.
    2. In 2012 Mr Malins started to act for Stephen Shirley in a claim against a building firm, STMC, concerning the quality of works carried out to Mr Shirley’s family home. Hill Dickinson were the solicitors for STMC. In March 2013 Mr Malins arranged ATE cover in respect of the litigation which he was planning to launch on behalf of his client. The total premium paid in respect of that insurance was £181,862.
    3. On 1st April 2013 LASPO came into force. LASPO made it impossible for a successful party in litigation to recover under a costs order the amount of any ATE premium which it had paid. In order to avoid the consequences of LASPO, it was necessary for Bond Pearce to serve form N251 giving notice of the ATE premium on Hill Dickinson, before the 1st April 2013. They did not do so.
    4. The litigation proceeded satisfactorily. STMC made a reasonable Part 36 offer. On 4th March 2014 Mr Shirley accepted that offer and became entitled to recover his costs, assessed on the standard basis.
    5. Mr Shirley claimed the ATE premium as part of his recoverable costs. Hill Dickinson maintained that Mr Shirley was not entitled to recover the ATE premium, because Bond Pearce had not served any notice of funding before 1st April 2013.
    6. Mr Malins was unable to find any record in his office of a form N251 having been served. In those circumstances he set about creating such a record and backdating it.
    7. On 2nd May 2014, Mr Malins created a letter on the headed note paper of Bond Pearce LLP (i.e. the old pre-merger firm) and dated it 19th March 2013. That letter was addressed to Hill Dickinson and read as follows:
“Dear Sirs
Stephen Shirley v STMC
Please find enclosed a notice of funding confirming the details of the ATE Insurance that has been taken out in respect of our client’s claim.
A copy of the notice will be filed at Court in due course, as necessary.
Yours faithfully
Bond Pearce LLP”
    1. Mr Malins created a form N251, giving notice of the ATE premium. He dated the notice 19th March 2013 and signed it “Bond Pearce LLP”.
    2. Having created those two documents, he sent them to Sarah Grant, the relevant partner at Hill Dickinson, under cover of an email dated 2nd May 2014 and timed 16:40. That email read as follows:
“Without Prejudice
Sarah,
Further to our conversation earlier this week, I attach a copy of our correspondence last year with notice of funding.
The other point which we should have made clear in our last letter is that our client is also entitled to interest on their costs, but this has been waived for the purposes of their settlement offer.
I know you are away until 8 May, but can we speak by the end of next week to confirm whether your client accepts our client’s offer in relation to costs.
Regards
John
John Malins
Partner
for and on behalf of Bond Dickinson LLP”
  1. On 21st July 2014, Mr Malins sent a further letter to Hill Dickinson asserting he had served form N251 in March 2013 and relying upon the copy documents sent in May 2014. On 14th August 2014 Mr Malins allowed the costs team in Bond Dickinson to send a letter to Hill Dickinson to the same effect.
  2. Subsequently the true state of affairs came to light. Bond Dickinson notified the SRA. At the instigation of one of his partners, Mr Malins sent a self-report to the SRA making full admissions. The SRA investigated. They then brought proceedings against Mr Malins in the Solicitors Disciplinary Tribunal.”

 

THE TRIBUNAL DECISION

The decision of the tribunal was overturned by the High Court judge, but resurrected by the Court of Appeal.  However we are not concerned with the outcome (striking off) but the findings of wrongful conduct and the consequent effect this had – making it impossible for the claimant to apply for relief from sanctions.

“49.12 … It was the Tribunal’s understanding that the test was objective. In order to assess whether the Respondent’s admittedly wrongful conduct in creating back dated documents crossed the line, as Mr Treverton-Jones put it, over into professional misconduct and constituted acting in breach of the requirement to act with integrity and to maintain public trust, the Tribunal considered that it had to consider his explanation that he had created and served originals of the covering letter and Form N251 in March 2013 and that his creation of the documents was therefore a crude form of duplication.
49.13 The Tribunal did not overlook the submission that the documents in Mr S’s case ran to 12 to 14 boxes. However the information before the Tribunal was clear; there was no evidence that documentation had been sent to HD in March 2013. The Tribunal had the benefit of Mr EW’s evidence about searches of the firm’s systems and the Respondent’s own evidence of his inability to find contemporaneous copies of any such documents. The best evidence that the Respondent could produce that the Form N251 existed in March 2013 was his own oral evidence that he had a handwritten draft of it in his daybook up until he left the firm and that he used that handwritten draft as the basis for the document he created in May 2014. He also stated that the handwritten draft was among a wad of loose documents which he asserted had disappeared from the daybook. The Tribunal considered that his reliance on the retention of a draft was suggestive that a final typewritten version was not prepared. He admitted but could give no reason why he had not retained a copy of the completed and served Form in his daybook when his evidence was that it was his practice to keep key documents in such a book for each matter. The Form N251 was certainly a key document because of the impending deadline for the change in the CPR rules. Even if the Tribunal accepted the Respondent’s evidence that a handwritten draft existed and had disappeared, it undermined his credibility that he had also not added it or a copy of the final version of the Form N251 as served to the file either electronically or in hard copy. There was then the obstacle that the electronic and paper filing systems contained no copy of any contemporaneous covering letter which the Respondent asserted he was sure he had sent. In answer to this the Respondent asserted that documents were missing from the electronic file and the paper file for the relevant period. The only other evidence to support the assertion that the documents had been sent was a reference in his oral evidence by the Respondent to a time recording entry for a letter to HD on 19 March 2013. However that did not constitute proof of the contents of any such letter or that it was signed and dispatched on that day. The evidence before the Tribunal led it to conclude that a covering letter and Form N251 were not sent in March 2013 to HD.
49.14 … The Tribunal did not find credible his reliance on the possibility that HD would find the documents in its files and that it had been toying with searching for them for some nine months. It was clear by May 2014 that these documents were not suddenly going to materialise. The Respondent was an experienced lawyer in this particular field and on his own evidence had dealt with two other cases where the CPR deadline was material and where his evidence was that the Forms N251 were in existence and in play during negotiations between the parties. The Tribunal noted that he did not produce the draft to HD in May 2014 and he could not on his own evidence produce it to the Tribunal at the hearing. The Tribunal was not satisfied that the handwritten draft existed but considered that the Respondent could not simply admit to having created the backdated documents but instead used the device of the draft to justify having done so. The Tribunal considered the Respondent’s explanation that there was no trace of the Form N251 on the firm’s systems because he had used a program PDF Filler. Even if this were the case and it left no trace on the firm’s systems of the document itself, following normal office procedure he would have created the covering letter on the firm’s system but no trace could be found of that either.
49.15 The Tribunal considered that the Respondent was an experienced litigation solicitor and clearly well versed in court procedure. In a situation where it was obvious what he had to do – apply promptly to the Court for relief from sanction – because he could not prove that he had served notice of ATE funding on the other side and knew (and indeed had always acknowledged) that he had not filed notice at Court, the Respondent chose instead when costs discussions were heading to court proceedings to create two backdated documents. This was a quite deliberate act involving use of the firm’s computer system to extract a heading for one of its predecessor firms which would have been in use in March 2013 and a document template. The Respondent had minimised the issues in obtaining relief from sanction in his evidence but the Tribunal considered that the outcome was far from certain thus putting him under additional pressure. The Respondent faced a further complication in that by maintaining his assertion that he genuinely believed that he had served Form N251 at the appropriate time he made it impossible to apply for relief from sanction. In respect of the facts and circumstances surrounding the creation of the two backdated documents there were simply too many factors which militated against the explanation which the Respondent had given for his actions. The Tribunal found that the Respondent’s actions in creating Form N251 Notice of Funding (allegation 1.1) and a covering letter for a Notice of Funding (allegation 1.2) both on 2 May 2014 displayed a clear failure to act with integrity (Principle 2) and that he had not behaved in a way that maintained the trust the public placed in him and in the provision of legal services (Principle 6). The Tribunal accordingly found allegations 1.1 and 1.2 proved on the evidence to the required standard.”

LAWYERS SHOULD BE TRAINED (AND PREPARED) FOR THINGS GOING WRONG

I know it is is not possible to legislate against the total loss of moral compass (and commonsense).  However this is another example of a failure to address a problem and,  indeed, making matters far worse for the client and the solicitor.

 “In a situation where it was obvious what he had to do – apply promptly to the Court for relief from sanction”.

It is not possible to say whether an application for relief from sanctions would have succeeded.  In May 2014, when Mitchell, was the dominant force it probably appeared as if there was no prospect.  Two months later after Denton (4th July 2014) an application may have stood a realistic chance.

If the solicitor had admitted the error and made an application then, by the time it was heard an application for relief from sanctions had, at least, a fighting chance.

Applications for relief from sanctions following late service of notice of funding  succeeded in

Something we should all learn

Somewhere within the process of legal training and education there should be a session on “what to do if things go wrong”, perhaps coupled with “no matter how hard you try things can still go wrong”.  I know some litigators claim infallibility but this is nonsense. We should all work to avoid mistakes, and systems must be in place, however problems can still occur.

(This post should not be seen as condoning misconduct. It is probably impossible to legislate against deliberate dishonesty. However proper awareness of the potential problems, and an appreciation that mistakes can be made can serve to reduce the number of problems occurring).

Making matters worse

By failing to address mistakes, openly, honestly and promptly, lawyers usually make matters far worse.  That is what happened in this case.

“The Respondent faced a further complication in that by maintaining his assertion that he genuinely believed that he had served Form N251 at the appropriate time he made it impossible to apply for relief from sanction.”

THIS IS NOT ROCKET SCIENCE

Mathew Hickey puts the point succinctly in Rocket Lawyer

“There will be moments in your legal career when things go wrong. Maybe even the devastatingly, “the sky is falling” sort of wrong.”

Legal culture, however, favours the myth of infallibility.  Lawyers do not make mistakes.  This contrasts with reality, where mistakes are made.

THE REASON THIS IS IMPORTANT

This myth (and again myth it is) of legal infallibility can have profound consequences.  The most significant of which is that it can make lawyers reluctant to  admit their mistakes at once, or, as in the case above, attempt to hide them.  The difficulty is that:

  • Many mistakes can be rectified if dealt with early.
  • The “cover up” of the mistake is almost always far more harmful than the mistake itself.
  • The costs, expense and delay to the client are made much worse.

SO TELL YOUNG LAWYERS (AND REMIND OLDER LAWYERS) THAT MISTAKES WILL BE MADE

  • Making mistakes does not make you a bad lawyer.
  • Failing to admit mistakes makes you a bad lawyer (you are never going to learn).
  • Covering up your mistakes makes you a dishonest lawyer (and probably an ex-lawyer).

Mistakes in litigation, if identified early enough and dealt with promptly enough, can often be rectified, or at very least the consequences minimised.

Far better to face up to a mistake than lose your means of earning a living.

PILOTS LEARN ABOUT CRASH LANDING: LAWYERS DON’T

As a passenger I am comforted by the fact that pilots have regular training on what to if anything goes wrong during the flight. I don’t expect things to go wrong, I  certainly don’t want anything to go wrong. However there are good reasons for pilots to be trained in this way. Not least they are learning from mistakes made in the past.

However there is very little by way of equivalent for lawyers.  It could be said that the issues are “obvious” and do not need telling.  However this does not take into account the sheer feeling of panic that can overtake a practitioner when a mistake has been made.  There, are, of course, sometimes issues of ego as well.  However the purpose of training and instruction is to ensure that people know what to do.

APPLYING THIS TO CIVIL LITIGATION

The need for contingency planning

Litigators, of all people, should know that things can go wrong. If they did not then there would be no need for litigators. Planning for things to go wrong is not a sign of weakness or defeatism.  It is pure realism.  All litigation departments have systems in place to ensure that things go right, however your contingency plan provides the essential safety net. Further effective contingency planning will feed back into the department and cut down on mistakes in the first place.

Knowing when things go wrong

Any contingency planning has to have a strategy for recognising when things have gone wrong.  In many cases this is obvious. The key point is often when a limitation period is missed, proceedings not served in time or an application made to strike the action, or part of the action or Defence, out.

Who should deal with the file?

When matters go wrong on a file it, normally, becomes the bane of the lawyer’s life.  It is often passed onto someone else. Hence the courts often see witness statements that say:

I now have conduct of this matter because I am the newest/youngest/ most gullible person in the department and everyone else realised that this file was a bag of rats.”

Of course the statement does not say that expressly. However most of our District Judges and Masters have knocked around for while and they can recognised the “hospital pass” file. It is not difficult to read the writing between the lines and Judges are, often, not impressed. Any  personal sympathy for the litigator involved is overtaken by anger (if not disgust) with the firm that put the litigator in that situation.

Further it is doubtful whether the new fee earner is comfortable with the file.   I have been involved in cases, particularly for large firms, where the assistant solicitor given charge of the matter regarding  being handed the “problem” file as somewhat of a blot on their career. They have explained to me that they felt that even being associated with the file would taint their reputation and their prospects. Further because much of the time spent on the file could not be billed they were unwilling to spend enormous amounts of time on it.

Someone sensible, and experienced needs to take this on

If a decision is made that problem files should be moved on (and my Advice is that, subject to the views of the client, they should be at least for the purpose of solving the immediately problem) they need to be moved to someone senior and with considerable, patience, wisdom and experience.  There is an abundance of talent in our litigators and, in most firms, someone will fit the bill.  Dealing with problem files should be the pinnacle of the litigator’s career. With these files it is often your firm’s money and reputation at stake it is sheer folly to hand the file to someone who is uncomfortable with them, no matter how diligent they are.

Act promptly and act decisively

Usually this involves an application to the Court, or defending an application.  This is where things can go wrong and where golden opportunities are missed for things to go right.  Any application made hereinafter, should be perfect with the forms accurately completed, witness statements clear, concise and wonderfully drafted and everything lodged and served in good time.

The important thing here is to be clear about the decisions you are making and, if relevant (which it usually is), consult with your indemnity ins

  •  If the position is hopeless then it is prudent to recognised this at once and mitigate   the damage as much as you can.  Hopeless applications to the court will only increase costs.
  • Even if the position is, apparently, hopeless there may be other escape routes. For instance  the law relating to service of a claim form within the four month period is extremely strict.  It will be rare for a court to grant an extension. However:-
  •  If the limitation period has not expired you can issue again.  (This is not, automatically, an abuse of process).
  • If the limitation period has expired, in personal injury cases,  then you can make an application under Section 33.

The case may require some lateral thinking. However if the position is hopeless then you must advise your client to go elsewhere.

If the position is salvageable then there are two rules:-

*           Don’t make the position worse.

*           Do what you can to make the position better.

THE FIRST APPLICATION TO THE COURT IS THE ONE THAT COUNTS

Never make a half-hearted or half-baked application to the District Judge or Master assuming that, since this is only a trivial default, then relief will be granted.  This is an extremely dangerous assumption.  Firstly the judge may not share your assumption, secondly if you fail in your half-baked attempt this is, effectively, the end of the line.

If you have made a half-baked application to the District Judge with half the evidence missing then, the chances are, the appeal will be considered with only half the evidence available.

DRAFTING THE WITNESS STATEMENT

My advice here is based on this cumulative experience of (at least) several hundred applications in relation to sanctions, relief and limitation, (in other words you are learning from the mistakes made by other people).

 (1) Be honest

If you, or  your firm, have  made  a mistake admit it.  The person responsible, or the partner responsible for the department, should state clearly that they admit responsibility. In many cases this is blatantly obvious in any event, however most judges respond positively to admissions of responsibility. (All this may be subject to the views of the indemnity insurers).

(2) Be prompt

The issue of delay in making an application is always a relevant factor.  Any application should be made within days, not weeks.

(3) Offer explanations and not excuses

This is closely allied to point number (1) above. The court is entitled to know how a party has got itself into this situation and is equally entitled to a detailed explanation. Give the court a clear and concise explanation make it clear that this is an explanation and not an excuse.

(4) Put any default right before you get to the hearing

If you are in default of certain steps and have been guilty of delay then make sure that those steps are taken before the hearing of the application. There is no need to delay the making of an application until the steps are complete, a separate statement can be sworn at a later date if necessary. However if, by the time the matter gets to a hearing, you have taken those steps then this is of great assistance, both to your case and to the court. Do not be put off by any consideration that the costs involved in taking these steps could be wasted, do them and do them properly.  A vague promise that these steps will be taken “soon” will not suffice. The facts that the steps have been taken will not guarantee success but will help considerably.

(5) Offer a definite plan of future action

If there are any matters outstanding when the matter reaches a hearing explain the reason for this to the court and offer a definite plan of future action together with a rigorous timetable. Make the timetable both rigorous and realistic,  many judges will respond to the offer of a timetable and, particularly if there has been a history of default, impose a series of peremptory orders. If you have suggested an unrealistic timetable then you are creating further problems for yourself.

IF YOU LOSE

If you lose at the application before the District Judge or Master:

  • Consider appealing. However remember the limitations and difficulties outlined above.
  • Remember there are only 14 days to lodge the appeal.
  • If you are going to appeal be careful to get it right. File the right documents, give proper grounds of appeal and file a proper skeleton argument.

IF YOU WIN

If you win you cannot afford to relax.

  • Consider who should deal with the matter in the future.

(1)  The matter should not, necessarily, be handed back to the original fee earner (although much depends on the cause of the original problem).

(2) Sometimes a partner takes over conduct of the matter. If the partner is not familiar with this area of the law, or has insufficient time to deal with the matter, this does not help.

  • Whoever deals with the matter steps should be taken to ensure that the situation is explained to the client and that the action stays on the rails in the future.

LEARNING FROM THE EXPERIENCE

An important point here is that the contingency planner should make sure that the whole firm benefits from the experience of any file that has gone wrong. Steps must be taken to:-

  • Ensure that the cause of the problem is identified and steps taken to deal with this.
  • If the problem is one of a system breaking down then the system must be remedied.
  • If the problem is one of overwork then the litigator’s workload must be examined.
  • If the problem is one of an individual litigator’s ability. Then consider re-training or re-allocation.
  • Do your very best to ensure that the specific problem never arises again.

THE CRUCIAL POINT: ENCOURAGING CANDOUR WILL SAVE MUCH TIME AND MONEY IN THE LONG RUN

What is very important is that staff are confident that they will receive help if they rely on the contingency plan. If your staff are not confident of this then mistakes will get hidden or (usually bungled) attempts will be made to remedy the situation. In these circumstances the plan is useless. The earlier you deal with problems the better.

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