PNLA Newsletter 2009
NEWSLETTER
Introduction – Nigel Mallett, Chief Executive
The last year has seen a number of financial disasters at home and abroad which have affected the economy of the country and has probably had an effect on everyone. It is expected that the number of professional negligence claims arising from this will increase substantially. Our focus, of necessity, has been in the area of mortgage fraud and lender claims, as a result of which the awareness of the PNLA has come to the attention of many other groups, details of which are given later in the newsletter.
We are finding that our website is being used more and more, not only by the public in general but also we have been directing far more claimants to it to obtain help this year. I had a card from one claimant who was absolutely delighted that the PNLA member we found for her won her case.
Our ATE scheme has taken longer to get up and running than originally anticipated but it has now been launched and initial response has been very positive with the number of cases being dealt with increasing significantly.
Events
We are hoping to run four seminars between now and Summer 2009, with our end of October seminar in London and our annual conference in November at Billesley Manor. The next two events are:-
22nd January 2009 – Bristol – half day event
Topic – update on liability, the problems lawyers face in a falling market and forensic claims valuations. If you would like a brochure, please email me at nigel.malllett@pnla.org.uk.
5th March 2009 – London – full day event with another “all star” line up – topics to include dishonesty, claims against fraudsters and limitation in solicitors claims – Jonathan Seitler QC to present a case study.
PNLA Lender Claims Group
During 2008, we arranged 3 targeted lender claims events aimed to prepare those involved with legal and practical guidance for the claims to come. 18 firms have so far joined with the PNLA for promotion of their services.
The main achievements in this regard have been our attendance at the CML Conference on 2nd December 2008 where we had a stand and we have been invited to speak at the CML Legal Issues Seminar on 13th January 2009. The PNLA Lender Group Directory is now available and we have now included the CML member lenders in our mailing lists. Further plans for 2009 are being prepared and cases are now beginning to come through.
Relationships
1. SRA – A representative attended the Leeds seminar in July and it is understood a panel will be considered in the future.
2. Law Society – Paul Marsh, as new president, spoke at the PNLA October conference in London – he has considerable knowledge of professional negligence and fraud and has asked us to provide survey information from our members on solicitors suspected of fraud and to meet to discuss this. He supports the formation of a panel for this type of work and it may well come within the Law Society’s remit in future.
3. Bar Pro Bono Unit – they spoke at our PNLA October event and it is hoped closer links and referrals can be developed.
4. Association of Regulatory and Disciplinary Lawyers – they have 700 members and we are discussing a joint event. and met on 1 December 2008 to discuss this.
5. Professional Negligence Bar Association – relations remain good and it is hoped they will also take part in joint events – some of their events are open to all, including a talk by the Master of the Rolls in London in April.
6. Council of Mortgage Lenders – relations have strengthened in 2008 and it has much to offer the PNLA and members interested in lender work.
ANNUAL CONFERENCE ROUND UP
25/26th November, Billesley Manor
The event was chaired by Mark Simpson QC in his usual relaxed and approachable style making the day flow apparently effortlessly.
Ray Hugill of Bradford & Bingley Plc gave a powerful address as first speaker on the points he looks for in panel firms. He perhaps gave no surprises on what they look for, but it was with considerable interest that he and the in-house team were very involved with risk assessments of claims and that they were also realistic on funding arrangements, taking a very sophisticated view of which claims to run and against whom.
Patrick Lawrence QC made us all think about risk assessments and claims preparation issues. He cautioned against simply making a claim against the valuer – insurance limitations make it all the more important to look at the wider scope, if any, for claims. He noted that the early decisions in the 1990’s were against valuers but the later claims were nearly all against solicitors as the insurance issues against valuers came to light. A cautious approach is to look to all possible defendants early, including mortgage brokers. Counsel regarded themselves as needing to be creative in the legal basis of claims last time, hence for example the use of equitable alternatives in an attempt to avoid defences including contributory negligence. This time, one can expect further creativity in particular equity and fraud/dishonesty based claims.
Matt Amey of the Judge explained how the operation of the PNLA ATE Scheme will work with lender claims. It is understood that some 60 PNLA members have now signed up for the scheme with more coming on board. Doug Hall of Smith & Williamson also explained the possible scope for third party funding of claims as an alternative – this may be more suitable – perhaps the only hope - for claims with insolvent or impecunious claimants.
Nicholas Davidson QC mesmerized with a picture of the approach of those in defence. Key points he presented were the scope for defendant ‘victory’ by awards of nominal damages. Ominous note was made of the scope for wide ranging disclosure and inspection applications. He also mentioned possible increased enthusiasm from the Courts to impose costs capping which can perhaps be used as a double edged sword. It is anticipated that defendants will be very keen to challenge costs, including ATE Premiums and Conditional Fee Agreements. The general feeling being that lenders were not the type of claimant that the legislation allowing this type of funding was designed to benefit.
Spike Charlwood in place of Michael Pooles QC outlined the impact of ‘external factors’ being dishonesty, aggregation, succession and intervention. The recent decision of the SRA withdrawing proposals to publish complaints records for solicitors was noted with regret.
Francis Dingwall of Legal Risk and Owen Thomas of Travelers Insurance looked at the detailed requirements for compliance with claims preparation and reporting. Protocol compliance issues and disclosure were highlighted. Documentation for disclosure was discussed including documents that solicitors should have for compliance reasons. The need for early disclosure in the claims process was emphasised. Owen gave further indications of insurers looking at ways to level the costs risks issues raised by claimants on CFA with ATE cover. His map of the human body as a metaphor for claims gave useful insight into the way insurers will approach claims. The message being that stream lining claims handling is an option that could be possible and the PNLA will follow this up.
DI Andrew Massey of City of London Police outlined the initiatives of the Government with his as the lead force for this type of prosecution. They are preparing prosecutions for mortgage frauds and the two he mentioned involved between £48 and £68 million. There are currently 5 of them in the team and they are recruiting for one more. He invited further contact and agreed to pass our details to DS David Clarke.
Roger Isaacs of Milsted Langdon and President of NIFA gave an outline of the key fraud and insolvency legal tools which will be close to the minds of all those involved with lender claims and mortgage fraud. This highlighted the importance of working alongside forensic accountants and insolvency practitioners to try to maximise the recoveries required by lenders this time, especially if bringing successful claims against professionals may not be seen as being as straightforward or lucrative as they have been in the past.
Overall, the impression is that there is going to be a real battle, if not a war, on the basis of negligence and civil claims. Mortgage fraud and dishonesty will be much higher on the agenda and the PNLA will be looking at the scope for support it can give to lenders and others potentially as a neutral and nationwide group.
THE CML CONFERENCE – 2 DECEMBER 2008 – OLD BILLINGSGATE, LONDON
This is always a well attended event but the PNLA really made a big impact this year. There were no other solicitors with a stand. The PNLA Directory, hot off the presses, and in a handy pocket size format proved popular and the firms’ individual brochures also disappeared. The topic for the event was ‘After the Storm’ and indeed the tone of the day was gloomy – numbers were down on other years and there is a feeling of some real panic behind the usual banter. The PNLA presence was significant – most Lender Group members had a representative there – we certainly made a real and timely impression.
Free National Hunter Fraud Searches: of note was the talk by the fraud software suppliers National Hunter. They have just offered a free service where solicitors (and others) can approach them for searches. If there is a positive result e.g. for a name/telephone number, then they will ask affected lenders if the results can be released. It was said that in practice most lenders will be happy to release the results if they are of some use.
The next CML event to note is 13 January 2009 – Legal Issues Seminar – London - Katy Manley is speaking and so an excellent event for PNLA members to be there to take advantage of our high profile.
Initiatives for 2009:-
a. PNLA will be developing its affiliate membership for forensic experts, investigators and insolvency practitioners and developing, if we can, ‘crack teams’ for fast response to mortgage fraud.
b. Lending Expert witness training and witness of fact preparation training will be considered as courses.
Date Added: 10/01/2009
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