CH1. Part D: - Pre-Action Considerations

Question 1

What issues must a solicitor need to consider at first instruction?

Answer 1

• the client’s objectives;
• the merits of the case, available remedies and limitation periods;
• the evidence available;
• the position of the other side and its ability to meet any judgment that may be obtained against it;
• professional conduct issues;
• alternative ways of achieving the client’s objectives;
• costs;
• how the client intends to fund the claim; and
  next steps.

Question 2

Evidence gathering will cover which two aspects of the claim?

Answer 2

1. liability i.e. proving the defendant is/isn’t to blame; and
2. quantum of damages, i.e. how much the defendant will pay the claimant if liability is proved.

Question 3

Give reasons why a solicitor must work hard prior to the issue of proceedings?

Answer 3

1. to give the client the most accurate advice possible;
2. to comply with the pre-action steps required by the court;
3. to ensure that the solicitors are fully prepared to respond to the claim/defence;
4. to make it easier to comply with court timetables;
5. to make it easier to evaluate the case as it proceeds; and
6. to make settlement more likely.
   It also means that the client incurs considerable ‘start-up’ costs.

Question 4

What needs to be considered regarding the position of the other side?

Answer 4

The financial status - If the other side cannot pay there is little point in pursuing him or her as a defendant.
Another consideration is what will need to be done if the party can pay but won’t, or if its assets are located abroad.

Question 5

List the principal ways to investigate the other party’s means.

Answer 5

Enquiry agents, registers, and company searches.

Question 6

What will a company search reveal?

Answer 6

1. the company’s general solvency;
2. the company’s assets; and
3. whether those assets are charged.

Question 7

What are the benefits or risks of using enquiry agents?

Answer 7

Private investigators can procure quite extensive information, but… they are expensive and run the risk of misconduct which will be imputed to the solicitor.

Question 8

List the four main registers.

Answer 8

1. The Register of Judgments, Orders and Fines Regulation 2005 (for England and Wales) (the ‘Register Regulation’)
2. Land Charges Registry
3. Individual Insolvency Register
4. Attachment of Earnings Order Index

Question 9

What other considerations regarding the financial position of the other party must be considered?

Answer 9

1. Is the other side in receipt of legal aid? - (unlikely to recover costs or damages)
2. Have the assets have been dissipated (disposed of or moved) in anticipation of the judgment in your client’s favour.
3. Is the party insured and entitled to be indemnified for the risk?

Question 10

What will the client letter include?

Answer 10

• A summary of the main points covered in the first interview
• Details of the retainer (the contract between the solicitor and the client).
• costs
• client care (often in a separate client care letter) in order to comply with the Outcomes in Chapter 1 of the SRA Code of Conduct 2011

Question 11

What are the 4 elements required for a cause of action/ claim?

Answer 11

Duty; breach; causation; and

loss.

Question 12

Duty - What must be established in contract?

Answer 12

You must establish that the defendant owed a duty to the claimant.
In contract you will generally need to show:
1. there was a contract between the claimant and the defendant (i.e. that there was ‘privity of contract’); and
2. that a duty/duties (derived from an express term (oral or written) and/or an implied term) was/were owed under that contract.

Question 13

Duty - What must be established in tort?

Answer 13

In tort you will need to show there was a duty/duties owed, for example, under the common law of negligence and/or a statutory duty.

Question 14

Breach - What must be established?

Answer 14

contract - factual evidence to prove breach of a statutory implied term or an express term.

Tort - breach established according to the standard of a reasonable man

Question 15

Causation - What must be established?

Answer 15

The breach of the duty has caused the client’s loss.

Question 16

Damage - What must be established?

Answer 16

The amount of the loss, and that the loss was reasonably foreseeable.

Question 17

Damages awarded for contractual claims require 2 elements, with the general aim to?

Answer 17

place the claimant in the position it would have been in if the contract had been properly performed. The test is that the loss must flow naturally from the breach or be in the reasonable contemplation of the parties when the contract was made.

Question 18

Damages awarded for tortious claims aim to?

Answer 18

Provide compensation and place the claimant in the position it would have been in if the tort had not been committed.

Question 19

Can a successful claimant of a tortious claim seek compensation for direct loss and consequential loss?

Answer 19

Yes provided the loss is a reasonably foreseeable consequence of the tort.

Question 20

What is the difference between a damages claim and a debt claim?

Answer 20

The difference between a damages claim and a debt claim is that, the claimant has a duty to mitigate its losses re. damages. In the latter, it does not.

Question 21

The main types of remedies available are?

Answer 21

Damages, injunctions and specific performance.

Question 22

What happens if proceedings are not commenced within the relevant limitation period?

Answer 22

The claimant will be barred from recovering damages and on this basis, the defendant will have a full defence.

Question 23

What is the limitation period for an action in tort or contract?

Answer 23

The limitation period expires six years after the date on which the cause of the action accrued.

Question 24

A case theory provides answers to what 3 questions?

Answer 24

1. What needs to be proved?
2. What evidence is there to prove it?
3. Is that evidence admissible?

Question 25

In civil litigation claims who does the burden of proof lie with?

Answer 25

Any party seeking to assert an issue of fact or law to further their case.

Question 26

Negligence - the claimant must prove:

Answer 26

Duty, breach, causation, and loss.

Question 27

Contract - the claimant must prove:

Answer 27

Duty (existence and terms of contract), breach,

causation and loss.

Question 28

Negligence - the defendant must prove:

Answer 28

contributory negligence (if any); and
b) why the defendant’s version of the facts is correct (i.e. that
the claimant’s version must be wrong).

Question 29

What is the required standard of proof in civil proceedings?

Answer 29

Proof on a balance of probabilities. A fact will be established if it is more likely than not to have happened.

Question 30

Give 3 examples of certain situations whereby the court may treat matters as established without evidence being brought into court?

Answer 30

1. Formal admissions

a) in the statements of case; or
b) in response to a notice to admit facts (CPR 32.18).

2. Presumptions
   For example: res ipsa loquitur (‘the facts speak for themselves’). Further details are unnecessary; the facts of the case are self-evident.
3. Inferences of fact
   (Common sense conclusions drawn from primary facts).

Question 31

Name 3 types of admissible evidence used to prove facts in issue.

Answer 31

1. Testimony, i.e. live witness evidence.
2. Documents.
3. Real evidence.

Question 32

Name and explain the 2 types of witnesses.

Answer 32

1. Witnesses of fact -
   Direct evidence by a witness of what s/he has perceived with his own senses.
2. Expert witnesses
   giving evidence of matters of opinion within their expertise provided the court’s permission has been obtained.

Question 33

Name and give examples of two types of documents.

Answer 33

1. private documents, e.g. contracts;

2. public documents, e.g. entries in a register.

Question 34

Give an example of ‘real’ evidence.

Answer 34

Prototypes produced to the court in a patent dispute.

Question 35

Pre-action Disclosure. Give the rule and the 4 conditions to be satisfied.

Answer 35

CPR 31.16
The applicant must satisfy four conditions:
1. the respondent is likely to be party to subsequent proceedings;
2. the applicant is also likely to be party to subsequent proceedings;
3. had proceedings started, the documents would have been disclosed under standard disclosure; and
4. pre-action disclosure is desirable in order to:
a) dispose fairly of the anticipated proceedings;
b) assist the dispute to be resolved without proceedings; or
c) save costs.

Question 36

List the main types of dispute resolution procedures.

Answer 36

1. litigation;
2. arbitration;
3. alternative dispute resolution, known as ‘ADR’; and
4. negotiation.

Question 37

Define Litigation.

Answer 37

Litigation involves the use of the courts and legal process to resolve a dispute.

Question 38

List the advantages of litigation.

Answer 38

• Legally correct solution
• Precedent value
• Wide power of the court
• Process is tried and tested
• A solution is guaranteed
• The process is not voluntary i.e. a party cannot back out

Question 39

List the disadvantages of litigation.

Answer 39

• Expensive and often relatively slow
• Lack of privacy
• Process is inflexible
• Solution is imposed by the court
• Process may be regarded as unfair
• No choice of judge

Question 40

Define Arbitration.

Answer 40

Arbitration is a procedure by which an impartial, independent third party decides the outcome of a dispute between two (or more) other parties.

Question 41

List the advantages of arbitration.

Answer 41

• Dispute heard by expert in field and person of parties choice
• Easier to enforce abroad
• Private
• Parties have more control over procedure and powers

Question 42

List the disadvantages of arbitration.

Answer 42

• Cost – often as expensive as litigation
• Limited rights of appeal
• Not appropriate in all cases e.g. if your client wants a precedent to be set
• Cannot join third parties to the proceedings without their consent

Question 43

Define ADR.

Answer 43

A method of resolving a dispute, other than by use of the courts. the most common type being mediation, which is a confidential process intended to facilitate resolution of a dispute through the use of a mediator, an impartial third party.

Question 44

List the advantages of ADR.

Answer 44

• Flexible and simple process
• Allows active involvement of the parties
• Quick and cheap
• Preserves commercial relationships
• Private
• Commercially realistic solutions

Question 45

List the disadvantages of ADR.

Answer 45

• Lack of powers for mediator
• Voluntary – parties can withdraw at any time
• Solution not binding
• Legally correct solution less likely
• Not appropriate in all cases, e.g. certain remedies unavailable/if your client wants a precedent

Question 46

Define negotiation.

Answer 46

Negotiation involves the parties (usually through their solicitors but not necessarily) attempting to reach a settlement without the use of the courts and without any form of intermediary.

Question 47

List the advantages of negotiation.

Answer 47

• Conducive to continuing relations
• Quick and cheap
• Private
• Flexible

Question 48

List the disadvantages of negotiation.

Answer 48

• No solution guaranteed
• Voluntary – parties can withdraw at any time
• No precedent value

Question 49

Explain a ‘retainer’.

Answer 49

A ‘retainer’ is the contractual relationship between the solicitor and the client. Once the solicitor has been instructed and agrees to act, a contract or ‘retainer’ is formed and the obligation to meet the solicitor’s costs is detailed in the retainer.

Question 50

Explain ‘Solicitor/ client costs’ and who is responsible for paying them.

Answer 50

These are the costs of the work carried out for the client, comprising:
1. profit costs (charge out hourly rate x numbers of hours spent) plus VAT; and
2. disbursements
A client is responsible for solicitor’s costs for work expressly or impliedly authorised.

Question 51

Explain ‘Costs on Account’.

Answer 51

Funds which the client pays the solicitor up front, before the solicitor begins work on their case.

Question 52

Explain ‘interim billing’.

Answer 52

Bills are rendered at regular intervals, for example, monthly or quarterly.

Question 53

Explain the general rule regarding ‘Party/ party costs’. Does the court have discretion? if so, under which rule?

Answer 53

General rule: ‘Costs follow the event’. The successful party’s legal costs are paid by the unsuccessful party (CPR 44.2(2)). These are known as party/party costs. BUT court has discretion CPR 44.2.
It is very unlikely a client will ever recover 100% of fees from the losing party.

Question 54

What factors does the court consider when making a costs order?

Answer 54

The conduct of the parties throughout the litigation and, in particular, whether they have acted reasonably.

Question 55

When can a court make a cost order?

Answer 55

At the end of proceedings, at interim hearings which may take place in the period between issue of proceedings and trial, or both.

Question 56

Outcome 1.13 (O(1.13)) of the SRA Code of Conduct (the ‘Code’) confers a duty on a solicitor to…

Answer 56

Give his/her client the best possible information about the likely overall costs of the matter both at the outset and at appropriate times during the retainer.

Question 57

Under Ch. 1 of the SRA Code of Conduct, Solicitors are expected to discuss the following with their client:

Answer 57

1. Advise the client of the basis and terms of their charges,
2. Make them aware of likely payments the client will need to make,
3. Advise the client of any potential liability for the other party’s costs,
4. Discuss how the client will pay; including the possibility of costs being covered by insurance, an employer, or a trade union, or whether legal aid is available..