Introduction:
Litigation lawyers play a crucial role in navigating the complex world of legal proceedings. However, there are circumstances where even the most experienced litigation lawyers can find themselves facing the prospect of personal liability for costs. In this blog, we explore a hypothetical example of an organization that engages litigation lawyers on a rolling secondment basis and how those lawyers can seek to avoid avoid the pitfalls of personal liability.
The Scenario
Imagine an organization that frequently engages litigation lawyers on a rolling secondment basis. In this scenario, legal proceedings were initiated by Contractor 1, and subsequently advanced by Contractor 2. By the time Contractor 3, an experienced litigation lawyer, joins the team, the case is already set down for trial in the not too distant future. However, Contractor 3 forms the view that the case should never have been commenced in the first place for lacking reasonable prospects of success - there just is no evidence to support the case brought, and maintained. What is the lawyer to do, and what should they have done?
Lesson 1: Assess Evidence and Seek Written Advice
One crucial step to minimize the risk of personal liability is to assess the evidence and seek written advice from counsel at the very start of the matter. In our hypothetical scenario, having a written record of counsel's advice on the prospects of success can be invaluable. This not only helps in building a strong case but also provides a defense against potential personal cost orders. However, it is acknowledged that sometimes, the budget is just not there, and then the solicitor must make their own assessment of the prospects and do so in a structured, and careful manner so their decision to start, or maintain a proceeding is defensible.
Lesson 2: Record Instructions and Document Everything
In the world of litigation, documentation is key. It is essential to record instructions from the client in a written form and maintain detailed file notes. Surprisingly, in the real world, some clients have an allergic reaction when litigation lawyers seek to document internal meetings and instructions or ask for written confirmation of instructions - so do not expect this component to be a mere matter of going through the motions of it. Unfortunately, in our hypothetical scenario, the lack of documented instructions and recollections of advice can make defending the matter more challenging. By diligently recording instructions and maintaining comprehensive documentation, litigation lawyers can probably protect themselves from potential personal liability.
Lesson 3: Certify Reasonable Prospects of Success
Another important lesson is to think critically before making a decision to certify that the legal proceedings have reasonable prospects of success. It is not enough to rely solely on counsel's advice; the litigation lawyer must also personally consider the merits of the case. In our hypothetical scenario, Contractor 3, being an experienced litigation lawyer, should have conducted a thorough assessment of the case and formed their own view on its prospects of success. By doing so, they can demonstrate that they have fulfilled their duty to the court and their client, reducing the risk of personal liability for costs. If reasonable prospects just aren't there - it may be necessary to withdraw from the matter altogether - something that is much, much easier said than done!
Lesson 4: Seek Separate Representation
In situations where personal cost orders are actively being sought against a litigation lawyer, it may be necessary for the lawyer to seek separate representation. This is particularly important when there is a conflict of interest between the lawyer and their client. In our hypothetical scenario, if the organization's interests may diverge from Contractor 3's view that the case should not have been commenced, it becomes crucial for Contractor 3 to be separately represented. This ensures that their interests are protected and that they have a fair opportunity to defend themselves against any personal cost orders.
Conclusion: Personal cost orders can be a distressing and embarrassing situation for litigation lawyers.
However, by following these practical steps, such as assessing evidence, seeking written advice, documenting instructions, certifying reasonable prospects of success, and seeking separate representation when necessary, litigation lawyers can limit the risks of personal liability. It is essential for lawyers to be proactive in managing these risks and to prioritize both their duty to the court and their duty to act in their client's best interests.