Claims never change

Over the past couple of years there has been a sudden (at least from the legal community’s perspective) transition to hybrid working. Indeed in their 2021 law tech report, the Law Society of England & Wales noted that “By some estimates there have been 5.3 years of digital transformation in the last year”. This transition has brought increased reliance on IT, and a corresponding susceptibility to cyberattacks. Numerous articles and guidance notes have already been produced on this topic; however cyberattacks represent a risk in the methodology of business. The purpose of this article is to consider the underlying causes of claims which, sadly, remain relatively unchanged; and what lessons can be learned from that.

In 2014, the SRA in England & Wales released data suggesting the main causes of claims and complaints comprised a mixture of both delays and technical errors. Almost a decade later, the landscape remains all too familiar, with the SRA reporting that delays remain the top reason for client complaints, while the SLCC’s most recent report shows that the majority of complaints continue to stem from conveyancing (with executries a close runner-up).

As one of the Master Policy panel solicitors, our experience reflects that of the regulators, and the trends show no signs of changing. Below are some examples of the types of claim we see on a relatively regular basis.

Case study 1: The back burner

We’ve all heard the culinary metaphors: transactions or court cases are either being cooked with gas or relegated to the back burner depending on the speed with which they are progressing. Of course the problem is, if you leave a pot on the back burner for too long, your food gets ruined.

In this case the solicitor was instructed in the purchase of a large rural property including several fields and a servitude right of access over a road owned by the seller. An application was submitted to the Keeper for registration of title. Several years later the Keeper indicated that the access road failed to identify a benefited and burdened property. The error was a simple drafting error which could have been readily resolved by amending the original application.

The solicitor raised the matter with the seller; however there were several delays in obtaining documentation and the matter was not progressed quickly. As a result of the delays, the Keeper cancelled the application.

Eventually, a fresh application was presented to the Keeper for registration. Sadly, in the intervening period, the seller had sold part of the access road. This prevented the Keeper from registering the servitude contained in the new application.

Had the original problem been dealt with timeously, the new owner of the access road would have taken it subject to the servitude of access. As a result of delays, however, the original problem became irretrievable. The purchaser sued the solicitor for negligence.

This is not an isolated incident and we have been instructed in several recent cases where a failure to act timeously, particularly in relation to title issues, has either caused or complicated disputes between agent and client. When in doubt, remember only to take on matters where you have capacity, and the Latin maxim, tempus fugit!

Case study 2: Style over substance

It is likely not a stretch to say that most of us have, on occasion, asked a colleague the time saving and innocuous question, “Do you have a style I can use?” The problem with styles is that their essence runs contrary to the solicitors’ mantra that “no two cases are the same”.

Nevertheless, in an effort to maximise efficiency, the reach for styles can be tempting. This can be particularly so when the drafter lacks experience and looks to others for support. The problem is that the greater the complexity, the greater the need for flexibility in adapting a boilerplate style; or, paradoxically, the greater the need for reliance on a style, the less likely that a style can safely be relied on.

In this case a solicitor was tasked with preparing a commercial lease between landlord and tenant. The lease was designed to regulate (amongst other things) a restriction on the tenant assigning or selling the lease. In its original incarnation, the lease was nothing out of the ordinary and one which was perfectly suited to the use of a style.

When originally prepared, the lease envisaged the tenant company attempting to assign the lease to a third party and nothing more. During the course of the transaction, the tenant changed and became a special purchase vehicle company. The problem was that, at that point, the possibility of a change of control higher up the corporate structure became a possibility – one which ultimately bore out in reality.

The case had a number of complex problems associated with it, but central to the pursuer’s argument was that, at the point when the tenant changed, the lease ought to have been changed to reflect the new reality and, in the pursuer’s case, the new risks associated with any change of control. The original style never envisaged this occurrence and couldn’t be expanded to cater for the complexity of this new reality. The drafting ultimately failed to achieve what the pursuer sought, and litigation ensued.

While deferring to styles and examples, remember that every situation or transaction is very much fact sensitive, and just because it worked for someone else does not mean it will work for you.

Case study 3: Staying in your lane

An unrestricted practising certificate entitles solicitors to engage in any area of law they choose without restriction. That being said, just because you can do a thing, does not necessarily mean that you must do that thing or that you can do it well.

Throughout my formative legal years it was impressed on me that there was a distinction between so called “high street” and “big firm” solicitors. The former were characterised as generalists, imbued with an ability to turn their hand to anything that came through the door. The latter were specialists, spending their entire careers devoted to increasingly niche areas of law. In the years since, I have seen an increase in specialisation, and a general decline in the role of the generalist solicitor.

The SRA notes that since July 2010 the number of sole practitioners declined from 37% of the profession in England & Wales to just 18% in September 2022. This division has been cemented in both case law and regulatory rules (see, for example Moy v Pettman Smith [2005] 1 WLR 581 and the Law Society of Scotland’s rule B1.10); however for the ordinarily competent professional the question arises: what is a specialist area?

To illustrate the point, albeit by reference to other professionals, in one of our cases an engineer had signed off on a professional consultant certificate (“PCC”), confirming that a property had been built generally in accordance with the building drawings etc.

The property turned out to be defective and the client sued the engineer for failing to inspect the property properly.

There was nothing which specifically prohibited engineers from executing PCCs; in practice, however, this task almost invariably falls to architects who are more specialised and experienced in this area. As it transpired, that is for good reason.

The issue which followed was the extent to which an engineer could be expected to know what defects to pick up on and whether the engineer in question should be held to the same standard as an architect carrying out the same activity. This then raised the difficult question of what standard the engineer ought to be judged against.

We have seen increasing examples of cases where solicitors have turned their hand to matters which on the face of it appeared to be within their competence, but once the transaction was under way specialist input has been required – the commercial lease with renewable elements; the will with crofting elements; the litigation involving offshore trust issues. In each of these the generalist would be well advised to seek specialist input rather than try to “muddle through” and risk coming a cropper.

With more areas of law becoming ever more specialised, the risk for the generalist is that they find themselves trying to negotiate areas of law which, if touched, might leave their fingers badly burned.

Conclusion

There’s a lesson to be learned from each of these case studies, but the concern is that, with the same causes of claims often repeating themselves, it appears we’re not as good as we should be at taking heed from the past misfortunes of ourselves and of others.

For those of us who carry responsibility as complaints or claims partners or who are responsible for disseminating risk management guidance, please make sure that you analyse and keep a record of the causes of your own firm’s bad experiences and “near misses”, and take a note of those you read or hear of other firms experiencing, identify any recurring issues or trends and regularly share all of this valuable learning material with your colleagues… because the only other way to learn a lesson is the hard way.