Litigation Trends. Update. Professional liability

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1 Professional liability January 216 Update Litigation Trends Last year, the Ministry of Justice published its statistics for judicial and court activity in England and Wales for 214. In this note, we take a look at the 214 figures and highlight emerging litigation trends. Our own enquiries into professional negligence claims for the first three quarters of 215 show that claims numbers are likely to be broadly similar to those for 214 and 213. We intend to follow this note with an update after the Ministry of Justice publishes its own figures for the whole of 215 later this year. The 214 figures show that overall the volume of litigation dealt with by the Royal Courts of Justice in London dropped by 13% compared to 213. This decrease (see Fig. 1) was due primarily to a reduction in the number of claims in the Chancery, Commercial, Companies and Bankruptcy courts (the biggest falls being in the Companies and Bankruptcy courts). The number of claims in the Queen s Bench Division increased marginally. Queen s Bench Division, London In the Queen s Bench Division, London (not including the Admiralty, Technology and Construction and Commercial Courts), the number of new claims increased by 231 to 5,417 (a 4.5% increase on the 213 number). On the other hand, the number of new QBD claims designated as negligence cases (including professional negligence) dropped from 258 to 27. This is the lowest level since the peak in claims in 29 when the figure was 362. By comparison, clinical negligence claims increased by 15%. The number of other tort claims (nuisance, trespass, assault, wrongful arrest) fell by 3% from 111 to 78. However, in contrast, defamation claims rose markedly from 142 to 227, up by 6%. Debt claims fell by 28% from 137 to 743, the lowest figure within the last ten years. Debt claims made up 14% of total claims issued, a marked decrease from 213, when the proportion was 2%. Breach of contract claims dropped by 29% from 891 to 633, continuing a downward trend after peaking in 212. Both of these statistics are consistent with general improvements in the economic outlook. Fig. 2 further illustrates trends in claims brought in the Queen s Bench Division in the Royal Courts of Justice, London, by category of proceedings as described above. Queen s Bench Division, England & Wales Across the whole of England and Wales (including London) 13,142 claims were started in the Queen s Bench Division which is virtually static (an increase of less than 1%) compared to 213. QBD claims hit a high of 18,583 in 29 but since then have been on a downward trend.

2 Chancery Division In the Chancery Division (excluding the Companies and Bankruptcy Courts), the number of new claims issued in London was 13% lower than in 213 (4,843 compared to 5,546). However, professional negligence claims in the Chancery Division in London jumped from 99 in 213 to 171 in 214, an increase of 72% (see Fig. 3). This indicates that claimants are increasingly electing to bring professional negligence claims in the Chancery Division in London. There could be a number of reasons for this, including the excellent facilities at the Rolls Building and reports of delays in the Queen s Bench Division, particularly in obtaining appointments for case management hearings. Across England and Wales (including London) 23,96 new Chancery Division claims were commenced, down 16% compared to 213, and a drop of 5% compared to a 28 peak. Professional Negligence claims Looking at the number of new professional negligence claims issued in London across both divisions together (balancing the drop in QBD with the increase in Chancery), the downward trend between 21 to 213 was arrested, with the number of new professional negligence claims in 214 broadly the same as in 213. Our review of new professional negligence claims issued during 215, suggests that the trend of bringing professional negligence claims in the Chancery Division has continued this year, with around 14 new claims issued against solicitors, barristers and accountants firms in the Chancery Division in a nine month period to September 215. The majority have been claims against solicitors.the equivalent number in the Queen s Bench Division in London is approximately 85. If the same trend continued until the end of the year, the overall number of new professional negligence claims in London in 215 across both divisions is likely to be broadly the same again as in 213 and 214. Fig. 4 illustrates the combined position in respect of professional negligence claims in the London Queen s Bench and Chancery Divisions. Fig. 5 shows the number of lawyers liability claims in the Chancery Division in London from which it can be seen that the number of claims against solicitors and barristers rose from 56 in 213 to 98 in 214. This is still nowhere near the 29 peak of 21. Companies and Bankruptcy Courts In the Companies Court in London there was a decrease in claims by 22% from 8,992 to 7,13, mirroring the decrease nationwide. Most of these were liquidation cases. The number of cases in the Bankruptcy Court in London fell from 8,51 to 7,14, a drop of 18%. Stronger economic conditions explain these falls. Technology & Construction Court Following an increase in activity of 7% in the Technology & Construction Court in London in 213, claims increased again in 214 but only by 1% from 446 to 451 (see Fig. 6). Commercial Court In the Commercial Court, following a spike in 211, when claims reached 1,331, the number of new claims dropped back. In 214 the figure was 1,85, 9.5% lower than in 213 (Fig. 7).

3 The Appellate Courts In 214, the workload of the Court of Appeal s Civil Division increased as the numbers of final appeals filed rose by 11% to 1,269. The number of successful appeals dropped from 375 to 316. Fig. 8 illustrates trends in the numbers of appeals filed and disposed of by the Court of Appeal. In the Supreme Court there were 211 applications for permission to appeal. Of the appeals disposed of during the year, 71 were allowed and 139 refused. The number of such applications rose slightly compared to 213 when there were 21 applications. The percentage of successful applications remained broadly the same. 6 full new appeals were presented to the Supreme Court in 214 compared to 84 in 213. Of the 52 appeals disposed of during 214, 34 were allowed and 18 were dismissed. This was a greater proportion of successful appeals by comparison to 213, when of 68 appeals disposed of, 32 were allowed and 36 were dismissed. Costs assessments Statistics for the Senior Courts Costs Office show that the number of costs assessments increased from 2,333 in 213 to 2,895 in 214. In 212 the figure was as low as 1,67 (Fig. 9). Comment Given the improving economic climate, it is not surprising to see a drop in the overall number of new claims issued in 214. Nevertheless, this disguises different trends in different areas. Defamation claims increased significantly (despite the introduction of the Defamation Act 213 which introduced the requirement that a claimant to show serious harm), perhaps as a result of claims relating to social media, although reports suggest a drop in 215. Personal injury and clinical negligence numbers also moved higher notwithstanding the changes to the rules relating to the funding of litigation for such cases introduced in 213, indicating that at least for larger claims commenced in the High Court, those new arrangements have not had the effect of denying access to justice. With regard to an area of particular interest, professional negligence claims, the overall volume of new High Court claims remained broadly steady in 214 and into 215 but with a marked increase in the number of claims brought in the Chancery Division. This is consistent with our own experience that the spike of claims resulting from the recession has largely worked its way through the Courts and that the number of new claims has settled back to a more consistent pattern. Adjudication of professional liability claims has not taken off (at least not yet) and while a significant proportion of claims are being resolved through the pre-action protocol, including by mediation, a steady stream of cases continues to reach the courts. We will update this note later this year, once further figures for 215 are available.

4 Fig. 1 Originating proceedings in the Royal Courts of Justice in London (Chancery Division, Queen s Bench Division, Admiralty Court, Technology and Construction Court, Commercial Court, Companies Court and Bankruptcy Court) 5, 45, 4, 35, Proceedings 3, 25, 2, 15, 1, 5, Fig. 2 in the Queen s Bench Division in the Royal Courts of Justice London, by nature of proceedings 1,6 1,4 1,2 1, Debt (goods Breach of sold & contract delivered, work carried out, etc.) Clinical negligence Personal injury actions Other negligence (inc. professional negligence) Category Defamation (libel, slander) Tort (eg. nuisance, trespass, assault, wrongful arrest, etc.) Recovery of Miscellaneous land/property

5 Fig. 3 in the Chancery Division of the Royal Courts of Justice, London, by nature of proceedings 1% 9% 8% 7% 6% Proportion 5% 4% 3% 2% 1% % Land Business and industry Intellectual property Contract Professional negligence claims Trusts, wills and probate Other Fig. 4 Professional negligence claims in the Chancery and Queen s Bench Divisions, Royal Courts of Justice London Queen's Bench Division (other negligence including professional negligence) Chancery Division (professional negligence)

6 Fig. 5 against barristers and solicitors in the Chancery Division, Royal Courts of Justice London, by category Fig. 6 Caseload of the Technology and Construction Court, Royal Courts of Justice London Fig. 7 issued in the Commercial Court, Royal Courts of Justice, London

7 Fig. 8 Final appeals disposed of by the Court of Appeal (Civil Division) 3, 2,5 2, Appeals 1,5 1, Filed Allowed Dismissed Dismissed by consent, struck out or otherwise disposed of Fig. 9 Number of between the parties assessments by the Senior Courts Costs Office 3,5 3, 2,5 Further information If you would like further information on any issue raised in this update please contact: Neil Jamieson E: neil.jamieson@clydeco.com Clyde & Co LLP The St Botolph Building 138 Houndsditch London EC3A 7AR T: +44 () F: +44 () Further advice should be taken before relying on the contents of this summary. Clyde & Co LLP accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. No part of this summary may be used, reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, reading or otherwise without the prior permission of Clyde & Co LLP. Clyde & Co LLP is a limited liability partnership registered in England and Wales. Authorised and regulated by the Solicitors Regulation Authority. Clyde & Co LLP 216 Assessments 2, 1,5 1, CC922 - January 216