Ask the Panel

The Panel Members

t: 0131 479 2776

e: tim.edward@mms.co.uk

Terry Brennan, Russells Gibson McCaffrey, Glasgow

t: 0141 332 4176

e: info@russellsgm.co.uk

t: 01506 464260

e: iain@nicolclaims.co.uk

t: 0131 556 2896

e: stephenblane@urquharts.co.uk

Having abruptly terminated its investigation into the Master Policy on competition grounds, the Office of Fair Trading is still making warning noises. It sees an “access to justice” issue in that more claims against the policy mean that everyone’s premiums go up. That, it reasons, makes it hard to find a solicitor to take on a professional negligence case against another.

Perhaps it should take a look at the Pursuers’ Panel, the four experienced litigators nominated by the Society to investigate and if appropriate pursue just such cases. Between them last year, they launched over 60 claims against members of the profession from 160 enquiries. However it would be wrong to be too critical of the OFT – the Panel members suspect that even many solicitors remain unaware of their role. As they approach the end of their initial three year term this coming September, how do they rate their recognition factor?

“Certainly in my experience the numbers of referrals from other members of the profession are very low”, comments Stephen Blane of A & WM Urquhart, the new boy on the Panel, having succeeded Alistair Thornton last year. “There are reasonable numbers of enquiries from individual clients themselves who have contacted the Society or have seen the information on the website.”

Iain Nicol, now a sole practitioner in Livingston, supports this. “There do seem to be quite a number of solicitors who are oblivious to our existence.” He and his colleagues accept that other solicitors may be willing, contrary to popular belief, to take on such cases themselves – but stress that theirs isn’t an all-or-nothing service. “We’re quite happy to assist other solicitors in formulating claims or in their dealings with the insurers as well,” Stephen Blane emphasises. “And because we’re doing a reasonable volume of this kind of work, I was able to build up quickly a very good working relationship with the professional indemnity insurers.” If there’s a claim which is close to being time barred, he can phone or email his contacts in the Royal and Sun Alliance and find out the best way of dealing with it – similarly if it appears that a claim may have fallen between stools at the insurers. “That has to be to the claimant’s benefit particularly at a time when they already have quite a poor perception of the profession because they’ve been let down, or feel they have, which is why they come to us in the first place.”

“Particularly in small town settings it can be helpful for an external adviser to be brought in to help with a claim,” Tim Edward of Maclay Murray & Spens points out.

Terry Brennan of Russells Gibson McCaffrey detects a growing tendency for other solicitors to consult him for a second opinion – a possible indication that the profession has an increased level of consciousness about the existence of the Panel and what it does.

The dangers of DIY

All four firmly believe that their good relations with the insurers are a big plus point. “I’ve noticed a big difference in my dealings with Royal and Sun Alliance in connection with professional negligence claims since the Panel was instigated”, Iain Nicol asserts. Or as Stephen Blane puts it: “I think they expect we will have given a claim a degree of thought and application beforehand because we are familiar with the points that arise and the questions that need to be asked of the claimant before it goes forward.”

Not that the insurers are always involved. A firm faced with a claim within its self-insured amount under the Master Policy, may prefer not surprisingly to deal with the matter itself. The Panel clearly believe that it is better to have someone on the other side taking an objective view of the situation, though most are reluctant to tell other firms how to respond to a claim. “It’s up to the firms how they deal with it,” says Iain Nicol. “What I don’t like to see is them burying their head in the sand and just pretending that there’s no claim there to answer.”

Nevertheless there is a shared feeling that such cases are more difficult to settle. Having been involved in the case, the solicitors concerned may have a view, in some cases an entrenched view, but it can still be helpful, even within the self-insured limit, to have a fresh pair of eyes to pick up something that might have been missed. It could be from another solicitor they know or one of the solicitors on the panel used by the Royal and Sun Alliance as lead insurer. The latter can offer a view as to who is in the right, even on something within a firm’s excess limit, and advise on how to proceed if the firm is considered to be at fault.

Of the cases taken up by the Panel, the majority are conveyancing or property related. Litigation, in particular time bar cases, comes second; beyond that there is a miscellany. Terry Brennan cites general advice on contentious matters as a significant source, and has recently noticed more claims arising from matrimonial financial settlements – to some extent an indication of the increasingly complex law in this area.

Where the problems arise

“I think the majority of claims arise just out of sheer carelessness and are completely avoidable,” Iain Nicol maintains. “I think the lack of preparatory work in certain instances is fairly stark. It’s just people being under pressure of time, clients’ expectations or whatever just to get a job done, but they’re cutting corners in some respects. That’s a self discipline issue more than anything else… There’s no one thing you can put your finger on to say that’ll cure all evils.”

Often with property-related claims the problem may not come to light until many years after the defective transaction. As Tim Edward comments: “In a lot of the conveyancing cases that I get, the problem arises when people come to sell their property and all of a sudden it comes to light that there’s a title problem or a consent that’s missing. Sometimes these can be rectified quite readily; for example if it’s a consent you can get the local authority to provide a letter of comfort which may be sufficient to enable the property to be sold, but it might still in the end of the day result in some sort of retention being made or reduction in the price. If it’s a fundamental title problem it’s more difficult.”

The first hurdles

All four concede that they may first have to overcome a client’s suspicions. Particularly if they have had a bad experience, members of the public sometimes come in not expecting anything because their view is that at the end of the day lawyers stick together. Whether the belief has any substance is doubtful. Panel members regularly consult specialists in the profession for an independent opinion, and can rely on them for an entirely objective view – in some cases critical in explicit terms of what has been done by the former solicitor.

Stephen Blane points out that there can also be a problem of explaining that a solicitor may have been patently negligent, but actually there has been very little loss occasioned as a result.

So is it hard for clients to accept, if they have to be told that there doesn’t appear to be a claim? “On the whole I’ve found people to be surprisingly reasonable in accepting advice,” says Tim Edward. “There will always be people who have a fixed impression in their mind that they have a good claim and who are unwilling to listen objectively, and I’m not sure that there’s much more the profession can do other than providing a panel such as we have to resolve that.”

He adds that he will say to clients that if they are dissatisfied, there are other solicitors on the Panel who could provide a view. “I’ve also provided and taken expert views from other Panel members when I’ve been uncertain about a case. So it does seem to me that people who come to us are getting a fair crack of the whip, a proper professional analysis of their claim.”

Funding can be another difficulty at the initial stage, as Stephen Blane explains. “I know from speaking to the other members of the Panel that they find it particularly difficult to make this type of work worthwhile, because it can be very labour intensive at the start if the client delivers to you a box of files which may take several hours to go through. The Scottish Legal Aid Board won’t give you an increase in expenditure until you can say whether there’s merit in it; you simply won’t know until you’ve spent three or four hours looking at all the papers, and if it’s a complicated action in the first place where the solicitor has allegedly been negligent you really have to spend quite a lot of time doing that. So that is a difficulty, there’s no doubt at all.”

Terry Brennan admits that clients can be taken aback at being asked to dig into their pockets again at the outset, especially if they feel aggrieved at having to consult a lawyer because of the negligence of their previous one. With work under the advice and assistance scheme, in the majority of cases he is able to persuade the Scottish Legal Aid Board to fund any expert opinion required, the cost of which can run to several hundred pounds.

The IPS option

Each Panel member is in no doubt that the increase in the maximum inadequate professional service (“IPS”) award, for work done after 1 April 2005, is a good thing. Though quite distinct from a professional negligence claim, the two often overlap, and the “more realistic” £5,000 limit, as Stephen Blane puts it, may encourage some clients to settle through that route rather than endure further protracted proceedings. Tim Edward agrees: “It’s certainly been a discouraging factor for people who come through me that the maximum compensation they could get has been £1,000. That doesn’t go very far these days if there’s a problem of any substance, so I can see an increased limit making it more attractive to people to go down the route of a complaint.”

It could however result in more contested IPS cases. Solicitors who may think it not worth their while putting a lot of time and effort into contesting a claim, if at the end of the day they are looking at maximum compensation of £1,000, might take a different view with the new maximum.

But there is a warning for solicitors not to risk an IPS complaint by attempting to negate the effect of negligence settlements. Some, for example, insist on charging their full fee for work carried out, even though it has given rise to a claim, and come up with a bill for £5,000 to cancel out a settlement at £5,000. If they insist in that course rather than taking a commonsense view, it is very likely to give rise to an IPS complaint.

The work may often be difficult, but the Panel members want their services to be as widely known as possible. To conclude with Iain Nicol: “We can offer the profession a service and we’re not necessarily there to make life difficult for anybody. We’ve had solicitors comment in correspondence when we’ve maybe been the second or even the third firm involved, that thank God somebody has actually sat down and looked at this properly… It is a specialised area, we’re trying to raise the standards and present these claims in a professional manner and as long as people know that we’re there, then hopefully we can be of service.”

TIM EDWARD had a claim where a client was trying to sell a ground and basement flat but it transpired the basement had been excavated from an existing cellar and there had been nothing done regarding title to the cellar when it was purchased. The Keeper wasn’t prepared to provide an indemnity in relation to the cellar and the purchaser wasn’t prepared to take it. The client had bought another property and was already bridging so there was a significant ongoing loss. “In that case we managed to persuade the firm of solicitors to acquire the property from the client and some larger claim was resolved by that, so there are flexible options which exist in that type of case.”

TERRY BRENNAN sees matrimonial financial settlements as a growth area for professional indemnity claims – most commonly due to drafting errors as the law becomes more complex. In one case a financial shortfall of £60,000 arose as a result of a drafting error in an agreement. The PI insurers accepted the claim. He has dealt with others at more modest level, and has more in the pipeline.

IAIN NICOL produces various examples of “sheer carelessness” – failure to investigate a defender’s correct designation, resulting in a failed action and a time barred claim; offering £25,000 more for heritage than the client instructed; failure to consider properly the correct sheriff court jurisdiction; and failure to lead crucial evidence at a disciplinary tribunal. Among other assorted blunders he has seen a failure to disregard the value of a client’s house in assessing eligibility for advice and assistance; failure to advise of alternatives to litigation, resulting in costs far exceeding the value of the claim – which he maintains would now be regarded as breach of duty even if it would not have some years ago; and failure to advise of the option of irritancy when instructed to pursue arrears of rent.

STEPHEN BLANE has some sympathy with the solicitor who missed a personal injury time bar, not realising that a two year and not a three year limit applies to aircraft accidents. “When I saw the papers it rang a bell with me that it was two years, but I couldn’t honestly say that I would have spotted it the first time the client had walked into my office.” Claims can often give rise, he says, to useful points for others to bear in mind for the future.