Part 36 offers**W

[andrew1]

I have been told by solicitors for a finance company I am in negotiation with they will be making a Part 36 offer to settle in a few days time, but I know what they are going to offer as they told me. If I were to get a Part 36 offer of my own in for what I want and what I believe is reasonable before they get there's in what are the benefits or pitfalls?

[surfaceagentx20]

Part 36 offers are 'without prejudice' offers to settle with carrrots and sticks. A fuller description would be 'without prejudice except as to costs'. The carrot is the sum offered to settle. The stick is that a where the offer is rejected by the offeree but the offeror should achieve a result in court which is equal to or greater than the Part 36 offer to settle which the offeror made, the 'without prejudice' veil is removed on the question of costs and the offeror may refer to his offer saying to the Judge: 'I offered to settle for £x and you awarded my opponent less than £x. Had my opponent accepted my offer when I offered it, we wouldn't have had to come to court. All the costs which have been incurred since I made that offer have therefore been wasted. I should get my costs since then to be paid by my opponent and I should not be liable to pay my opponent his costs since then either.'

 

The costs consequences are spelled out in CPR 36.14. They are that:

 

(1) This rule applies where upon judgment being entered-

(a)a claimant fails to obtain a judgment more advantageous than a defendant’s Part 36 offer; or

(b)judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer.

 

(2) Subject to paragraph (6), where rule 36.14(1)(a) applies, the court will, unless it considers it unjust to do so, order that the defendant is entitled to-

(a) his costs from the date on which the relevant period expired; and

(b) interest on those costs.

 

(3) Subject to paragraph (6), where rule 36.14(1)(b) applies, the court will, unless it considers it unjust to do so, order that the claimant is entitled to-

(a) interest on the whole or part of any sum of money (excluding interest) awarded at a rate not exceeding 10% above base rate (GL) for some or all of the period starting with the date on which the relevant period expired;

(b) his costs on the indemnity basis from the date on which the relevant period expired; and

© interest on those costs at a rate not exceeding 10% above base rate.

In other words, the offeror gets his costs on a more generous basis for costs assessment and which will yield more cash (the indemnity basis versus the less generous standard basis) and gets interst too. If the offerror happens to be the claimant he will get interest on his award as well.

 

I am not clear whether you are a Claimant or a Defendant but I assume you are a litigant in person. This is a pity, because as a litigant in person only half the stick is available. The one part of the stick which involves the opponent paying your costs is a bit soppy.

 

As for the timing of any Part 36 offer to settle particularly where it is anticipated the opponent will make one, it must be remembered the usual rule which says a counter offer is tantamount to the rejection of an earlier offer disapplies in the field of Part 36 Offers. Further, the receipt of a Part 36 offer by a party about to make its own Part 36 Offer may cause that party to hold off from making that offer.

 

x20

[andrew1]

Further, the receipt of a Part 36 offer by a party about to make its own Part 36 Offer may cause that party to hold off from making that offer.

 

Which is precisely where the danger lies. So, it may be a far better ploy to continue with my personal dialogue and encourage them to go back and improve the offer before documenting it into a part36...sweet talking might be a better option, I have a very good relationship going with the solicitors believe it or not even though they are paid to sue me....Thank you for that...I'll mull this over during the afternoon and plan...

[mcuth]

As for the timing of any Part 36 offer to settle particularly where it is anticipated the opponent will make one, it must be remembered the usual rule which says a counter offer is tantamount to the rejection of an earlier offer disapplies in the field of Part 36 Offers.

 

Interesting - so you should always explicitly reject the original P36 offer if you want to make a counter offer?

 

Is non-reply taken the same as rejection?

 

Cheers

Michael

[elizabeth1]

Surfaceagent20x

 

I've a question about Part 36 offers too.

 

I am thinking along the lines of a personal injury claim as a claimant.

 

Scenario is the claimant was led to believe the claim had reached court stages. The Counsel's advice had been sought, witness statements had been drawn up, it had been said papers had been drawn in court.

 

Defendants made Part 36 Offers - for whatever reasonings the solicitors representing the claimants insisted "this is best offer you'll get - don't risk a hearing you'll lose and be liable for costs". Solicitors spoke of scary figures to ensure settlement went ahead. Consequently compensation was paid out and solicitors took their cut. (this was done on a no win = no fee basis = case was won so claimant had to pay solicitors a lump sum from awards won)

 

Now upon doing an SAR asking for complete copies of the files off solicitors several things came to light.

 

No evidence of any official court papers amongst files at all.

No Correspondence between the solicitors involved and court of any description.

 

General feeling is a much higher settlement could have been achieved. Solictors bullied to end the case.

 

Letters shown between claimants solicitors and Defendants Legal Dept only days before settlement was reached Defendants are clearly asking the solicitor "which court are you filing in?" = clearly the case has never been filed despite numerous telephone conversations and emails the solicitor insisted case was already filed.

 

A "minors" (under 18) money was held back till months after 18th birthday - was told by solicitor money was at court held till 18th birthday etc.. - absolutely no evidence at all his money was held by court ever - and eventually cheque was from solicitor involved not the court.

 

There are plenty of other descrepancies but the above is just an outline.

 

NOW MY QUESTION is should this case have been setled CPR PART 36 while it wasn't in court ? Can this be used still if proceedings haven't gone to court at all ? = while no papers had been lodged in a court at all.

 

Should the solicitor take costs from both the claimant and defendants? My reasoning is these solicitors took quite a hefty sum from the defendants as in £10,000 - but also took around 25% of the compensation awarded too. Are they allowed to take money from each party like this under a CPR part 36 settlement?

 

I am just curious and need to fathom the next move with this cause I don't know how to deal with it. Any reply will be greatly appreciated as I am in the dark about this CPR Part 36 stuff.

[surfaceagentx20]

mcuth,

It is unnecessary to expressly reject a Part 36 offer if the offeree wishes to counter with a P36 offer of his own. He just makes his P36 offer. The point I was trying to make was the usual rules of offer andd acceptance do not apply. In other words, the offeree in the example I just gave would be at liberty to accept his opponent's P36 offer after service of his own P36 offer. The opponent's P36 offer would not be treated as having been rejected as it might have been if the usual rules concerning offer and acceptance were applied.

 

Elzabeth I,

In the case you cite, the situation goes much further than a mere consideration of offers to settle and whether or not within the confines of P36, but rather to the adequacy of the compensation settled on after advice from a solicitor and whether that advice was advice which a reasonably competent solcitor would give in the circumstances (ie was the solicitor's advice negligent advice?)

 

As for your questions:

[1] A P36 offers can be made before litigation [see CPR 36.3(2)]

 

[2] A conditional fee agreement (CFA) (commonly known as a 'no win no fee agreement') may provide for an uplift or enhancement of fees in the event of a win. Ordinarily in a PI claim, the enhancement will be payable by the defendant wrongdoer or his insurer and the Claimant's solicitor will have notified the opponent that he is proceeding with the benefit of a CFA. The CFA is usually made from the outset with notice about the CFA given in the letter of claim addressed to the wrongdoer.

 

If the claim resulted in a win and if the solicitor conducting under a CFA gave notice about it to the wrongdoer, ordinarily there would be need for the solicitor to recoup costs from his client.

 

The arrangement for the recovery of fees has nothing to do with CPR 36. The recovery of costs from the wrongdoer is governed by the settlement agreement, which may in whole or in part be construed by reference to the terms contained in a Part 36 offer. The recovery of costs from the lcient is governed by the CFA.

 

The client in your example is entitled to physical possession of the solicitor's file and not limited to receiving what may or may not come up on a SAR. Indeed, since a solicitor's file is largely paper based without manual retrival system in place, little of the file would be reveald on a SAR.

 

In the circumstances my advice would be to demand possession of the file and work on what to do next by reference to what's in it. There will be three lines of enquiry

 

[1] did the solicitor mislead as to the state of the claim?

[2] did the solicitor negligently advise on the adequacy of the settlement proposal? and

[3] has the solicitor made an inappropriate deduction from the settlement which he should pay back?

 

Hope this clarifies the position for both of you.

 

x20

[elizabeth1]

Elzabeth I,

In the case you cite, the situation goes much further than a mere consideration of offers to settle and whether or not within the confines of P36, but rather to the adequacy of the compensation settled on after advice from a solicitor and whether that advice was advice which a reasonably competent solcitor would give in the circumstances (ie was the solicitor's advice negligent advice?)

 

As for your questions:

[1] A P36 offers can be made before litigation [see CPR 36.3(2)] Right OK so this can be used prior to litigation - However, the Claimants were led to believe litigation had begun - BUT the SAR doesn't reveal any Court papers at all - in fact days before settlement letters within the file do reveal Defendants were asking in letters which court was the case to be filed in etc.. (contradictary?)

 

[2] A conditional fee agreement (CFA) (commonly known as a 'no win no fee agreement') may provide for an uplift or enhancement of fees in the event of a win. Ordinarily in a PI claim, the enhancement will be payable by the defendant wrongdoer or his insurer and the Claimant's solicitor will have notified the opponent that he is proceeding with the benefit of a CFA. The CFA is usually made from the outset with notice about the CFA given in the letter of claim addressed to the wrongdoer. YES there were CFA's in place - so does this mean that the Defendants should have paid COSTS to solicitors of the Claimants?

 

If the claim resulted in a win and if the solicitor conducting under a CFA gave notice about it to the wrongdoer, ordinarily there would be need for the solicitor to recoup costs from his client. I'm confused because of 2 above. Will examine the CFA see what it says - copies in SAR are blurry - will ask Solicitor involved for clearer copies of these docs.

 

The arrangement for the recovery of fees has nothing to do with CPR 36. The recovery of costs from the wrongdoer is governed by the settlement agreement, which may in whole or in part be construed by reference to the terms contained in a Part 36 offer. The recovery of costs from the lcient is governed by the CFA. The elements of the PI claims were some how settled as individual issues/elements of claim - each element was paid out separately - the Part 36 offers did NOT at all mention costs in any of these offers. The solicitor withdrew amounts from each of the elements as each element was dealt with. The Claimants did not know that the Solicitors were also asking costs from the defendants/losing party too - this only came to light with the SAR afterwards in the letters contained within files.

 

The client in your example is entitled to physical possession of the solicitor's file and not limited to receiving what may or may not come up on a S.A.R - (Subject Access Request). Indeed, since a solicitor's file is largely paper based without manual retrival system in place, little of the file would be reveald on a SAR. Right OK will ask Solicitor for a complete copy of the contents within file as there are lots missing (the SAR was quite explicit and asked for breakdowns of all costs, all letters and correspondence between defedants and claimants solicitors - BUT it seems claimants solicitors have been very "choosy" as to which parts of files was sent to claimant under SAR??) Is there any particular regulation/section that can be used to gain the "FULL CONTENTS" of these cases?

 

In the circumstances my advice would be to demand possession of the file and work on what to do next by reference to what's in it. There will be three lines of enquiry

 

[1] did the solicitor mislead as to the state of the claim? there is a strong possibilty this could have happened.

[2] did the solicitor negligently advise on the adequacy of the settlement proposal? and Mmm!! gaining the full file will display this

[3] has the solicitor made an inappropriate deduction from the settlement which he should pay back? Not sure yet.

 

Hope this clarifies the position for both of you.

 

x20

 

x20 Thank you so much for this help I really do appreciate this.

 

I willl ask for complete copies of the files (I have already paid £40 SAR to these solicitor for 4 people files) will write asking again for the entire contents of file.

 

I will explain what has raised my suspicions/interests in these cases again.

 

There was a "minor" claimant amongst these cases - as legally the minors money won ought to have been kept at Court till reaching 18th Birthtday - the claim was paid in 4 elements at different times/stages over a 12 month period. The minor never received any interest on his money at all and nothing in his file suggests his money was ever with a court.

 

Witness Statements were prepared for claimants - again there is no evidence of a claim being placed in court etc.. Defendants letters repeatedly ask about where case is going to be file etc.. right up to final part 36 offer.

 

The only way I will see the entire claim is by contents of these files - it seems the solicitors involved don't want to do that - it previously took 6 months (three recorded delivery written requests all signed for) as it happened the letters were not reaching the claimants solicitors apparently. But it was requests sent to the same person and address that had been used for 3 years without anything going astray.

 

I could be wrong with my suspicions - BUT there are just a few things that don't add up.

 

Thanks again for your help.

 

Andrew1 - me sorry for for hogging your thread but you know what me like when me gets a bee in my bonnet

[mcuth]

mcuth,

It is unnecessary to expressly reject a Part 36 offer if the offeree wishes to counter with a P36 offer of his own. He just makes his P36 offer. The point I was trying to make was the usual rules of offer andd acceptance do not apply. In other words, the offeree in the example I just gave would be at liberty to accept his opponent's P36 offer after service of his own P36 offer. The opponent's P36 offer would not be treated as having been rejected as it might have been if the usual rules concerning offer and acceptance were applied.

 

Thanks x20, I gettit now

 

Cheers

Michael

[andrew1]

x20 Thank you so much for this help I really do appreciate this.

 

 

 

Andrew1 - me sorry for for hogging your thread but you know what me like when me gets a bee in my bonnet :p

 

Not a problem elizabeth1, I'd like to encourage more Part 36 Offer questions and answers on this thread as it is quite interesting and a powerful tool used correctly.

 

Sarah

[surfaceagentx20]

Elzabeth I,

 

I created the confusion, sorry. I missed out a 'no'. Correctly, the paragraph which lead to confusion should read:

 

If the claim resulted in a win and if the solicitor conducting under a CFA gave notice about it to the wrongdoer, ordinarily there would be no need for the solicitor to recoup costs from his client.

 

Each client / claimant will need to make his or her own written request for their individual file or where one file was opened to conduct one claim for 4 claimants, then each client / claimant will need to sign the letter requiring delivery up of the one file. You need to remeber the file is the property of the Claimants not the solicitor. The solicitor acts as agent and the Claimants are his principles. The clients are simply asking for what is theirs!

 

Where a claim is to be settled in regard to a minor (nowadays and in the rules, identified as a 'child') CPR 21.10 governs the procedure. The procedure covers settlements reached in the course of proceedings and also without proceedings. Any settlement not approved by the court is invalid and either party may theoretically resile from it. It is therefore in the interests of not only the child (who will begin the proceedings for approval by his 'litigation friend - usually a parent or guardian) but also the wrongdoer to have the settement validated by approval of the court.

The idea behind this is that child Claimants and their litigation friends are thereby assured that independent authority has considered the proposed settlement, before it is approved if appropriate, thus protecting them, if it be necessary, from any errors made by their advisers. Defendants are assured that the court’s approval, without which the compromise is not valid, means that the claim is fully and finally settled, so that a valid discharge is obtained, thus protecting them from any renewal of the claim after, for instance, a child claimant reaches majority at the age of 18.

 

For a decision on the point see Drinkall v Whitwood [2003]

 

The court requires the production of all necessary evidence in or to reach an independent view as to liablity and quantum (See CPR PD 21 Para 7)

Assuming the court approve a settlement, the court will require persuading in terms of what shold occur in relation to the money's investment (See CPR PD 21 Paras 8 and 9). That the money should swish around in the solicitor's account attrcting no interest is an utter 'no no'.

 

Issue your letter for the release of the file and direct that it should be made available immediately. In the letter say that the file will be collected personally and propose a date and time when the file will be picked up, being a date and time say 7 days hence, adding that if it may be available before then, that they may tell you by telephone.

 

See what that brings.

 

x20

[elizabeth1]

x20 I can't thank you enough for this information.

 

My Original SAR requests were sent in January 2008 and through one excuse and another (lost recorded delivery letters, mislaid emails etc..) we have never had the entire contents of these files although the SAR was clearly worded that this is what we wanted to receive.

 

These solicitors have been "choosy" in what they've given to us in relation to this. There is absolutely nothing suggesting any court / judge had over looked the "minors" settlement was fair and correct etc..

 

I shall do as you suggested and will write a letter requesting these entire files and will arrange to visit their offices and collect them.

 

Once I have got these files I shall come back with what I find.

 

At the moment I just have niggley suspicions something is not / was not right - having the whole file will tell the whole story.

 

Thank you for your help.

 

Elizabeth1

[tinkerbell20]

Interesting - so you should always explicitly reject the original P36 offer if you want to make a counter offer?

 

Is non-reply taken the same as rejection?

 

Cheers

Michael

 

 

Not now as the Part 36 rules have recently changed - there is no longer any need to reject a part 36 offer before making one yourself

[andrew1]

Not now as the Part 36 rules have recently changed - there is no longer any need to reject a part 36 offer before making one yourself

 

So, given that situation, If I as defendant put in a part 36 offer to settle before the claimant and the claimant comes back with their own Part 36 don't we end up with the original situation of trying to negotiate a settlement and the P36 a waste of time? It seems that the benefits of getting in a part 36 offer are lost in that case.

[tinkerbell20]

So, given that situation, If I as defendant put in a part 36 offer to settle before the claimant and the claimant comes back with their own Part 36 don't we end up with the original situation of trying to negotiate a settlement and the P36 a waste of time? It seems that the benefits of getting in a part 36 offer are lost in that case.

 

 

The discrepancy between the eventual amount awarded by the judge and the two Part 36 offers willeffect the amount of costs awarded and to which party. Its no loonger a case of winner take all so to speak

[andrew1]

The discrepancy between the eventual amount awarded by the judge and the two Part 36 offers willeffect the amount of costs awarded and to which party. Its no loonger a case of winner take all so to speak

 

Okay, so I am told by phone pre-p36 from them that they had received instruction from the bank, although it's not been documented yet, as to what the company were going to offer me and tell me what that offer is and I say " it's not enough " I am then asked what I think a sensible offer might be and I answer xx which is a higher amount than they were thinking about, but less than my original claim. I then put my proposal on paper as a P36 and send it to them. Next day they formalise their own including this statement " Please note that we intend to bring this letter to the Court’s attention on the question of costs and interest in the event that the offer is not accepted and the matter proceeds to trial. In the event that you are awarded a settlement equal to or less favourable than that detailed above, we will seek an Order that you pay our clients’ costs on an indemnity basis and interest up to 10% above base rate upon those costs from the date herein. and it is preceded with this in the covering letter: I note that you have verbally rejected my client's recent offer. However, I attach a letter setting out my client's offer for completeness.

 

Now where does a situation like that leave us and how would it be best to proceed?

 

Sarah

[tinkerbell20]

Okay, so I am told by phone pre-p36 from them that they had received instruction from the bank, although it's not been documented yet, as to what the company were going to offer me and tell me what that offer is and I say " it's not enough " I am then asked what I think a sensible offer might be and I answer xx which is a higher amount than they were thinking about, but less than my original claim. I then put my proposal on paper as a P36 and send it to them. Next day they formalise their own including this statement " Please note that we intend to bring this letter to the Court’s attention on the question of costs and interest in the event that the offer is not accepted and the matter proceeds to trial. In the event that you are awarded a settlement equal to or less favourable than that detailed above, we will seek an Order that you pay our clients’ costs on an indemnity basis and interest up to 10% above base rate upon those costs from the date herein. and it is preceded with this in the covering letter: I note that you have verbally rejected my client's recent offer. However, I attach a letter setting out my client's offer for completeness.

 

Now where does a situation like that leave us and how would it be best to proceed?

 

Sarah

 

 

I would write back and say (if true) that you did not refuse their Part 36 you have merely forwarded them your Part 36 for them to consider. It will be whichever is closer to the final amount awarded who may benefit costs wise

[andrew1]

I would write back and say (if true) that you did not refuse their Part 36 you have merely forwarded them your Part 36 for them to consider. It will be whichever is closer to the final amount awarded who may benefit costs wise

 

Okay, if it is true, and the offer not 'verbally rejected' there is now, according to what has been said previously here, no one priority of offer either ours or there's other than ours being put in first. Which normally would be the one which is in fact applying the pressure to accept is it not?

 

If it were felt that the company - lets say - "did not have enough documentary substance" to take the case to court and it was a matter of who blinks first, how would one approach or be approached to find common ground as in if it were being negotiated around a table?

[andrew1]

Surfaceagentx20, you mentioned the files belonging to the client of a solicitor above thus:

 

The client in your example is entitled to physical possession of the solicitor's file and not limited to receiving what may or may not come up on a S.A.R - (Subject Access Request). Indeed, since a solicitor's file is largely paper based without manual retrival system in place, little of the file would be reveald on a SAR.

 

I have files with a firm which have now been contacted by a lender who has obtained files from those solicitors we used and wish to include these in their disclosure documents - Firstly, do they have a right to have these and secondly, in what manner do I approach these solicitors to obtain my files? In other words what on earth do I say to them to get them to release them, is it as a result of some legal Act or protocol I can quote at them to get them? The lender insisted upon advice being gained at the execution of the deal, but we instructed them. If they are to use them, no doubt they'll use the documents they choose, but if I can obtain the whole file then that's even better.

 

Thanks

 

Sarah

[surfaceagentx20]

If a solicitor holds papers concerning business transacted by you as a client of that firm, the firm would be in breach of its duty of confidentiality owed to you as a client, if it revealed any part or aspect of that file without your consent. To hand over a complete file of papers without your permission would be a wholesale disregard of that duty.

 

You may ask for the delivery up of the files in the solicitor's possession by writing and asking for them. There is no relevant special statutory power or protocol. The right derives from ordinary possessory rights in property. The file is your property. You commissioned it and you paid for it. That's a second reason not to give the file away. It's not theirs to give away but yours.

 

I can imagine the lender insisted as a condition of granting a loan that independent legal advice was obtained beforehand. That is common. Yet the simple insistence gives the lender no greater powers or diminishes the solicitor's duty to you as client one jot.

 

Having obtainjed the file ther may be documents in it you would be bound to disclose in the course of stansard disclosure in litigation. However, you will not be bound to disclose documents which attract legal professional privilege, which in essense are documents prepared for the purpose of giving or receiving legal advice.

 

x20

[andrew1]

You Sir/Madam, are one very special individual I rarely come across and have just made my day!

 

Thank you very much!

[elizabeth1]

x20

 

An update on my request for files from solicitor = the solicitor involved still insists she will go back over files and forward the "missing items" to me.

 

Several emails later where I am insisting I want the "whole files" - she is still insisting she needs to "review" the files before she releases them to me. I said I'd be willing to collect them from her offices on Monday 29th Sept 2008 - should she be unwilling to forward these files. She hasn't confirmed one way or the other which it's to be etc..

 

I shall give her untill mid afternoon tomorrow and if I don't get a positive response one way or the other I will copy her senior colleagues into this and ask for their assistance etc.. Looks like I'll have to push harder.

 

I get the feeling that she is trying to guess what I am looking for within the files etc.. so is stalling for time to guess my plans?

[andrew1]

I just had an interesting conversation with one of the firms of solicitors used at the time. He stated that it was normal practice in a loan transaction that the firm acted for both the bank and the client. I stress that one firm was engaged to provide independent advice to my partner and they had no involvement with either me or the funds. The other practice I have just spoken to were involved in disbursing some of the loan facility to 2nd charge and Caution holder - it is this one who has sent a full file to the banks solicitors and who feel they were acting for both the bank and ourselves. Does this seem correct?

 

 

This is the letter sent to the banks solicitors by one of the old partners of this firm, on headed paper from his new practice. It doesn't make me feel particularly comfortable:

 

“Your letter of the xxx 2008 has been passed to me as a former partner of xxx which firm closed on the xxx 2004. I have access to the old files in relation to that firm and I have now retrieved the above file from storage and this is attached.

 

This is enclosed on the basis that you hold the documents to my order since I have not taken duplicate copies of the whole file.

 

However, to assist, I have left a the front of the file a handwritten note (this is in my handwriting) dated xxx 2003 confirming that xxx signed the additional loan offer in my presence before he took it away to have it signed by his wife in the presence of an independent solicitor. A colleague of mine, xxx, actually dealt with the file but he was obviously not available at the time when the loan offer was signed by xxx

 

If I can be of further assistance please do not hesitate to contact me.

 

Please note that yyy is not a successor practice to xxx and I am writing to you in a personal capacity and not on behalf of the firm.

 

Yours faithfully,”

Further answers from this individual when questioned further revealed this comment too:

 

" The firm was retained by xxxBank to complete the further advance and also retained by you. There is invariably a dual retainer when acting for clients and mortgage lenders."

 

It all sounds a bit sitting on the fence to me. Perhaps I am mistaken in my belief as I paid the bill and retained the firm in the first place then I am the client?

 

I have asked him if in fact his firm then received a fee from the bank to which I have had no answer as yet. - Just had the answer - No just you!

 

Sarah

Edited September 25, 2008 by andrew1

[surfaceagentx20]

It is indeed common for a solicitor to act in certain circumstances for both lender and borrower. However, a solicitor should not act where a conflict of interest arises. Whether there was a conflict at the time I can not say. If it was considered necessary that a solicitor should be retained to give independent legal advice regarding a loan, that would suggest someone perceived a potential confict. In any event, evidently the solicitor acted for both borrower and lender at that time.

 

A second firm, retained according to you, for the purpose of distributing loan funds received, today claim it acted for both lender and borrower. I do not see how that can be so if the firm referred to in the preceding paragraph handled the transaction for both lender and borrower and if the nature of the instructions was in relation to the disrtibution of the loan.

Evidently the loan business was transacted prior to 2004 since in that year the second firm closed. The file has come into the possession of either a third firm, not being a successor practice to the second firm, or a solicitor who is a former partner of the second firm and is now a partner of the third firm.

 

It is this solicitor who has released the file to the lender on the one hand saying he releases in his personal capacity, yet on the other writing on the third firm's note paper. In 2004 the relevant code (since changed - see below), was the 1999 Guide to the Professional Conduct of Solicitors, Rule 3.11 of which states:

 

'Where there has been a material alteration to the composition of a firm, all clients of the firm who may be affected must be informed promptly.'

 

The closure of a firm quite evidently is a 'material alteration.' Therefore, you should have been informed of the closure in writing and advised about any arrangements for the storage of your file after closure. Had you been informed you may have decided to ask for the file to be released to you.

 

In any event, for the lender to be entitled to any part of the file it will be necessary for there to be a retainer between that lender and the solicitor. If there is no retainer, and there is at least a question in this area on what I am told, no right to the file arises.

 

If the lender did retain the solicitor, below is a quote from the Guidance Notes to Rule 4, entitled 'Confidentiality and disclosure' appearing in the Annex to the current code, The Solicitors Code of Conduct 2007.

 

Where a lender asks for a conveyancing file and you have kept a

joint file for both borrower and lender clients, you cannot, without

the consent of the borrower, send the whole file to the lender,

unless the lender can show to your satisfaction that there is a

prima facie case of fraud. If the client does not consent, you

should send only those parts of the file which relate to work done

for the lender.

 

If the solicitor has released the entire file, in my opinion, he has breached Rule 4.

 

A pdf of the code can be obtained here.

 

x20

[andrew1]

It is indeed common for a solicitor to act in certain circumstances for both lender and borrower. However, a solicitor should not act where a conflict of interest arises. Whether there was a conflict at the time I can not say. If it was considered necessary that a solicitor should be retained to give independent legal advice regarding a loan, that would suggest someone perceived a potential confict. In any event, evidently the solicitor acted for both borrower and lender at that time. Actually not quite, but nearly. This was a Further Advance transaction which was complex in it's make up clearing some personal and business debt and the loan company felt Mrs would need to be aware of the liabilities independently of the transaction itself, reflecting your assessment of a possible conflict. The remit of this firm was purely to advise on the loan content and its implications.

 

A second firm, retained according to you, for the purpose of distributing loan funds received, today claim it acted for both lender and borrower. Correct I do not see how that can be so if the firm referred to in the preceding paragraph handled the transaction for both lender and borrower and if the nature of the instructions was in relation to the disrtibution of the loan.

Evidently the loan business was transacted prior to 2004 since in that year the second firm closed. It was in May 2003 the loan distribution was being negotiated The file has come into the possession of either a third firm, not being a successor practice to the second firm, or a solicitor who is a former partner of the second firm and is now a partner of the third firm. correct

 

It is this solicitor who has released the file to the lender on the one hand saying he releases in his personal capacity, yet on the other writing on the third firm's note paper. In 2004 the relevant code (since changed - see below), was the 1999 Guide to the Professional Conduct of Solicitors, Rule 3.11 of which states:

 

'Where there has been a material alteration to the composition of a firm, all clients of the firm who may be affected must be informed promptly.'

 

The closure of a firm quite evidently is a 'material alteration.' Therefore, you should have been informed of the closure in writing and advised about any arrangements for the storage of your file after closure. Had you been informed you may have decided to ask for the file to be released to you.

 

In any event, for the lender to be entitled to any part of the file it will be necessary for there to be a retainer between that lender and the solicitor.( I have been informed there was not a fee received by this firm from the lender. All charges were for our account and paid by us, I take it by 'retainer' you specifically mean the passing of monies between the two parties rather than assuming an instruction has been considered a 'joint one'.) If there is no retainer, and there is at least a question in this area on what I am told, no right to the file arises.

 

If the lender did retain the solicitor, below is a quote from the Guidance Notes to Rule 4, entitled 'Confidentiality and disclosure' appearing in the Annex to the current code, The Solicitors Code of Conduct 2007.

 

Where a lender asks for a conveyancing file and you have kept a

joint file for both borrower and lender clients, you cannot, without

the consent of the borrower, send the whole file to the lender,

unless the lender can show to your satisfaction that there is a

prima facie case of fraud. If the client does not consent, you

should send only those parts of the file which relate to work done

for the lender.

 

If the solicitor has released the entire file, in my opinion, he has breached Rule 4. I have been informed by this solicitor that the whole file has been forwarded and without any reference to us

 

A pdf of the code can be obtained here.

 

x20

Thank you this is most informative. Might I ask what remedies might be available to us now?

[andrew1]

This gets more bizaar as things progress and I'm not too sure how to proceed with this.

 

I was in a position of some strength in my claim against the bank, no answers to most of my claim have been forthcoming and their solicitors had submitted disclosure documents and a case hearing due early October. Unbeknown to me, around mid August the banks solicitors wrote to the solicitors I had engaged to effect the disbursements of funds (and as would be normal, to ensure clean transactions and to clear 2nd charges etc to ensure clear title as dictated in the loan agreement document conditions) to request the file held by the practice with regard to this transaction. Apart from the letters of which I was sent copy of at the time in 2003 relating to the transactions, I have no idea what else was within that file.

 

As mentioned above, that practice has 'changed' it no longer calls it self the name it was in 2003, but the phone number is still answered by a firm of solicitors. I called to find out what had actually been sent as I knew nothing of this request, nobody other than a temp was there so I left a message to call me. One of the partners listed on the headed paper in 2003 telephoned me but he stated he no longer worked there but had his own practice and retained the files of the old practice of which mine were one.

 

He acknowledged receipt of the letter from my banks solicitors, forwarded no doubt by the other old practice at that address and confirmed to me that he had forward the WHOLE file (uncleansed of my legally privileged documents) which had to be returned and held 'to his order'.

 

I then received advise from my banks solicitors that as a result of their findings in these files they were changing their disclosure documents and their whole stance changed in relation to my negotiating position this is what they wrote:

 

"Our client has recently made enquiries of the completing solicitors Firm A and Firm B in an attempt to obtain further information regarding this matter. As a result of these enquiries, we have received a file from the completing solicitors,(firm A) in relation to the further advance paid in xxx 2003. We are preparing a supplemental disclosure list in respect of the contents of this file and will forward the same shortly.

 

In light of this, we propose the following directions:

 

1. The hearing on xx October 2008 is vacated

2. Our client to provide supplemental disclosure of the file received from the completing solicitors on or before xx October 2008

3. The proceedings be adjourned for 2 months to allow the parties to attend a mediation

4. Our client to inform the Court of the result of the mediation on or before xx December 2008 and to file suggested directions, to be agreed with you if possible

5. The matter be listed for a case management conference on the first available date after xx December 2008."

 

Now, yesterday was to be the third time Witness Statements were to be exchanged and due to their non response to our defence we had been requested to extend the dates, the hearing had also been put forward once at their request. But this has been going on since Feb 08 with this firm employed by the bank and they had come up with nothing to this date of any substance in defence. It may have been because they were awaiting these files, but never the less at this moment in time I had submitted my own Part 36 offer before their one arrived which sought a larger settlement figure than they were previously suggesting and they may well have been about to settle upon my Part 36 amount or thereabouts - I'll never know now.

I was confident there was nothing which could have changed their argument in these files anyway, but it certainly changed their attitude.

 

With the above now in play, I contacted the banks solicitors and asked if they would approachable for an 'off the record' discussion Without Prejudice' to see if we could clear the air ( negotiations had been difficult as they would/couldn't answer any of my counter- claim) and see if we could find common ground with which to conclude this without necessity of mediation and court - we weren't that far apart and I had a very strong position.

 

During that call ( and it's not quite finalised yet so I have to be careful) a proposal was discussed , agreed and deemed acceptable between us and the bank will be asked their opinion by their solicitors for approval. Fine, BUT.....the negotiating position had had to be changed as it altered the balance as I did not know what was in the files, although they were going to disclose them, and it appeared they completely changed their attitude to progressing with both mediation and pushing for a case management conference. None of this bravado had been evident previously and in their own Part 36 believe me, they would not have offered what they did had they the slightest glimmer of a case.

 

I now feel that this fellow, who, according to his letter to the banks solicitors accompanying my file ( he has now sent me an emailed copy of the letter since my phone call and email confirmed he sent the whole file and removed nothing) acting as he says 'in a private capacity' despite writing on his firms letterhead, is responsible for this change in both parties negotiating position weakening mine and strengthening the banks, although as yet I don't know what they had, it was the psychological effect it had on the negotiation. Lets face it, it's the psychology in negotiating deals which wins or loses a case, sometimes facts don't count, like poker it's who blinks first.

 

I have agreed that I would accept the figure I discussed with the banks solicitor if the bank agrees, but I will never know if I would have received my Part 36 amount which was substantially higher.

 

Have I got good cause to raise some kind of action against this fellow? Quite in what capacity I'm not sure because he is stating his 'personal capacity'.

 

x20 you have pointed me to the rules and regs of the solicitors conduct and pointed out that the file should have been cleansed..can you give me any idea of my position in this as I feel I lost my bargaining power during this negotiation conversation? I'd really appreciate your opinion.

 

Thank you.