DSBA Litigation Seminar 11th March.

1. DSBA Litigation Seminar 11th March. David Curran LLB. CPLS. Solicitor, Insurance Consultant & Sports Arbitrator.

2. . Making A Professional Negligence Claim: -Who is the Client? -Identify the Negligence - Has a loss been suffered?

3. In most transactions there is no doubt about the identity of the client, sometimes there will be uncertainty about the person on behalf of whom the solicitor is instructed. However, not always clear cut! • McCutcheon v David MacBrayne Ltd 1964 1WLR at 125 • Look at the legal framework governing the transaction, Section 68 letter, Terms of business retainer letter etc.

4. Look at: • The legal framework governing the transaction, • Section 68 letter, • Terms of business retainer letter etc. • Solicitor could be instructed by one client, many clients, a representative of a body of clients or by one or more companies. Full analysis must be carried out to ; • Understand the intention of the person or persons dealing with the solicitor. • Deduce on whose behalf the solicitor was reasonably entitled to conclude he was being retained by.

5. Solicitor could be instructed by one client, many clients, a representative of a body of clients or by one or more companies.

6. Full analysis must be carried out to ; • Understand the intention of the person or persons dealing with the solicitor. • Deduce on whose behalf the solicitor was reasonably entitled to conclude he was being retained by.

7. Full analysis must be carried out to ; • (ii) Deduce on whose behalf the solicitor was reasonably entitled to conclude he was being retained.

8. Welburn v Dibb Lupton Broomhead (2003) EWCA Civ1601. • Plaintiff started case prior to the entering of the IVA but claim then vested in the supervisor of the arrangement. Wrong plaintiff continued the action. • Extent of Instructions: Scope and limits of retainer. • Scope of solicitors duties depends on the terms of the retainer coupled with any additional implied duties. • - Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (1979) Ch. 384 • Credit Lyonnais SA v Russell Jones & Walker (2002) EWHC1310 • Solicitors duties determined by construing terms of instructions , as they usually lack legal precision. Up to solicitor to clarify areas of obscurity so as extent of obligations is clear.

9. Extent of Instructions: Scope and limits of retainer. • Scope of solicitor’s duties depends on the terms of the retainer coupled with any additional implied duties. • - Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (1979) Ch. 384 • Credit Lyonnais SA v Russell Jones & Walker (2002) EWHC1310 • Solicitors duties determined by construing terms of instructions , as they usually lack legal precision. Up to solicitor to clarify areas of obscurity so as extent of obligations is clear.

10. Solicitors duties determined by construing terms of instructions , as they usually lack legal precision. Up to solicitor to clarify areas of obscurity so as extent of obligations is clear.

11. Extent of Instructions: Scope and limits of retainer. • - Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (1979) Ch. 384 • Credit Lyonnais SA v Russell Jones & Walker (2002) EWHC1310 • Solicitors duties determined by construing terms of instructions , as they usually lack legal precision. Up to solicitor to clarify areas of obscurity so as extent of obligations is clear.

12. - Judith Whelan & Ors v AIB, M.O.P & LK Shields Unrep. High Court Peart J Dec 8th 2011 Solicitor should be clear who is and who is not their client & what their retainer is and what they will do to discharge the retainer.

13. Establishing Loss: Emerald Island Assurances and Investments Ltd, Timothy Maverley & James Morey v Coakley Moloney solicitors Unrep. High Court Kearns P. Jan. 18th 2012 - Despite solicitor being found negligent, no causative loss was established. This applies to Accountants, Architects, Engineers and other professionals.

14. Insurance & Coverage position: • Has the potential defendant the ability to meet any award? Have they the benefit of an insurance policy or are they Self insured? • Compulsory insurance scheme, Group scheme or members of a professional body. • - If insurance policy in place, know the terms, conditions and exclusions. • Duty on Plaintiff solicitor to advise on likely payment of damages if claim successful. • Consider all sources of funding for the plaintiff action, • (i) Household insurance ( legal costs component) • (ii) Professional insurance( D&O) • (iii) Before the event or after the event insurance ( BTE & ATE)

15. Insurance & Coverage position: • Compulsory insurance scheme, Group scheme or members of a professional body. • - If insurance policy in place, know the terms, conditions and exclusions. • Duty on Plaintiff solicitor to advise on likely payment of damages if claim successful. • Consider all sources of funding for the plaintiff action, • (i) Household insurance ( legal costs component) • (ii) Professional insurance( D&O) • (iii) Before the event or after the event insurance ( BTE & ATE)

16. Insurance & Coverage position: • If insurance policy in place, know the terms, conditions and exclusions. • Duty on Plaintiff solicitor to advise on likely payment of damages if claim successful. • Consider all sources of funding for the plaintiff action, • (i) Household insurance ( legal costs component) • (ii) Professional insurance( D&O) • (iii) Before the event or after the event insurance ( BTE & ATE)

17. Insurance & Coverage position: • Duty on Plaintiff solicitor to advise on likely payment of damages if claim successful. • Consider all sources of funding for the plaintiff action, • (i) Household insurance ( legal costs component) • (ii) Professional insurance( D&O) • (iii) Before the event or after the event insurance ( BTE & ATE)

18. Insurance & Coverage position: • Consider all sources of funding for the plaintiff action, • (i) Household insurance ( legal costs component) • (ii) Professional insurance( D&O) • (iii) Before the event or after the event insurance ( BTE & ATE)

19. (i) Household insurance (legal costs component) • (ii) Professional insurance (D&O) • (iii) Before the event or after the event insurance (BTE & ATE)

20. “Those who fail to remember the lessons of history are condemned to repeat them” George Santayana, Spanish American Philosopher & Poet. David v David (2009) NSWCA 8 Cherney & Ors v Neuman & Ors (2011) EWHC 2156 Bowdage v Harold Michelmore & Co (1962) EGCS 54(CA) Clarke Boyce v Mouat (1994) 1AC 428 Caparo Industries v Dickman (1990) UKHL 2AC 605 Hedley Byrne v Heller (1964) 1AC 465

21. David v David (2009) NSWCA 8 Cherney & Ors v Neuman & Ors (2011) EWHC 2156 Bowdage v Harold Michelmore & Co (1962) EGCS 54(CA)

22. Clarke Boyce v Mouat (1994) 1AC 428 Caparo Industries v Dickman (1990) UKHL 2AC 605 Hedley Byrne v Heller (1964) 1AC 465

23. Defending a professional negligence action; the Insurance Lawyer’s position. • Provision of a defence inherent in Professional Indemnity policy. • Solicitor appointed to deal with the defence of matter; type of appointment • (i) Singular retainer • (ii) Dual retainer • (iii) Coverage counsel. • Establish retainer and extent of instruction . Who is client, is it insurer, insured or both.

24. (i) Singular retainer – for Insurer or Insured. • (ii) Dual retainer – for Insurer & Insured, • (iii) Coverage counsel. • Establish retainer and extent of instruction . Who is client, is it Insurer, Insured or both?

25. Insurers should consider all issues on cover in early course. • Are there notification issues? • Material non disclosure issues? • Dishonesty/ Fraudulent conduct issues? • Consider cross referral with policy, proposal form, insured profile as well as the nature of the claim. • If coverage issue exists, general reservation of rights or Specific reservation of rights. Duty to inform insured. • - Fiduciary obligations of the retained law firm.

26. Consider cross referral with policy, proposal form, insured profile as well as the nature of the claim. If coverage issue exists, General reservation of rights or Specific reservation of rights

27. Duty to inform Insured of:- • General reservation at earliest opportunity. • (2) Specific reasoned reservation asap. • - Fiduciary obligations of the retained law firm.

28. The insurer must act in good Faith, the contract is one of “utmost good faith” Sections 17 & 18 of the Marine Insurance Act 1906. Sec 17 Insurance is uberrimæ fidei.

29. A contract of (marine) insurance is a contract based upon the utmost good faith, and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party. • Carter v Boehm (1766) 3 Burr 1905. • March Cabaret Club & Casino v London Assurance (1975) 1 Lloyd’s Reports 169

30. Carter v Boehm (1766) 3 Burr 1905. • March Cabaret Club & Casino v London Assurance (1975) 1 Lloyd’s Reports 169

31. 18 Disclosure by assured. (1)Subject to the provisions of this section, the assured must disclose to the insurer, before the contract is concluded, every material circumstance which is known to the assured, and the assured is deemed to know every circumstance which, in the ordinary course of business, ought to be known by him. If the assured fails to make such disclosure, the insurer may avoid the contract.

32. (2)Every circumstance is material which would influence the judgment of a prudent insurer in fixing the premium, or determining whether he will take the risk. (3)In the absence of inquiry the following circumstances need not be disclosed, namely:— (a)Any circumstance which diminishes the risk; (b)Any circumstance which is known or presumed to be known to the insurer. The insurer is presumed to know matters of common notoriety or knowledge, and matters which an insurer in the ordinary course of his business, as such, ought to know;

33. (3)In the absence of inquiry the following circumstances need not be disclosed, namely:— (a)Any circumstance which diminishes the risk; (b)Any circumstance which is known or presumed to be known to the insurer. The insurer is presumed to know matters of common notoriety or knowledge, and matters which an insurer in the ordinary course of his business, as such, ought to know;

34. (c)Any circumstance as to which information is waived by the insurer; • (d)Any circumstance which it is superfluous to disclose by reason of any express or implied warranty. • 4)Whether any particular circumstance, which is not disclosed, be material or not is, in each case, a question of fact. • (5)The term “circumstance” includes any communication made to, or information received by, the assured • Aro Road & Land Vehicles Ltd v Insurance Corporation of Ireland Ltd (1986) IR 403 • Chariot Inns Ltd v Assicuraziona Generali (1981) IR 199

35. (5)The term “circumstance” includes any communication made to, or information received by, the assured • Aro Road & Land Vehicles Ltd v Insurance Corporation of Ireland Ltd (1986) IR 403 • Chariot Inns Ltd v Assicuraziona Generali (1981) IR 199

36. Discharge defence retainer in proper manner, - Establish liability and potential quantum in a timely manner. Insurer and insured will expect advice on how best to deal with the claim, should it be settled or proceedings issued. Don’t give over optimistic and unqualified advise at any time. Client and insurer will rely on such advices.

37. Levicom International Holdings BV & another v Linklaters (a firm) EWCA Civ 494 Rebuttable presumption that solicitors advice is causative when a client or insurer relies on this to their detriment. Always have opportunity to analyse all aspects of the claim.

38. Get insured professional’s full papers. • Is the defence entitled to other papers from third parties. Consider voluntary discovery from third party. • Data Access requests. Section 4 of Data Protection Acts 1988 & 2003.

39. Independent expert to opine on the mechanics of the transaction which is the subject of the litigation. Choose suitably qualified expert to provide commentary on acts or omissions alleged and how this radiates into a loss.

40. Bolam v Friern Hospital Management Committee (1957) 1WLR 582 Engage with the Plaintiff in early course, try to establish common ground. Consider Plaintiff’s strengths and weaknesses. E.G Plaintiff’s motivation for claim, recovery of funds or restitution or raid on policy?

41. Defence Strategy: Litigation route: Defend in full, lengthy and time consuming. ADR: Mediation or Arbitration, speedy resolution, compromise & privacy.

42. The Defence solicitor: Judged by the standard of other competent defence solicitors. Roche v Peilow (1985) IR 232 O’Donovan v Cork County Council (1967) IR 173 “Advertising Specialisms, notice to all Solicitors” - Practice Note April 2007.

43. “God Ted, I've heard about those cults. Everyone dressing in black and saying our Lord's going to come back and judge us all”.