1. Britain’s forthcoming defence review.
2. Jackie Fisher, First Sea Lord at the end of the 19th Century.
3. John Terry, Chelsea and England footballer.
4. Publius Flavius Vegetius Renatus.
5. The Royal Navy.

Answers on a postcard please!  

No, not really. Inappropriate in this electronic age and there is no prize for this one anyway.

Last Sunday evening, I was happily clutching an alcoholic restorative in a comfortable chair by a roaring log fire, when my attention was drawn to background commentary on the TV about HMS Dreadnought.

The voice was Dan Snow’s, (son of Peter of the Swingometer arms beloved of election night audiences) the presenter of a BBC TV series about Britain’s naval past entitled “Empire of the Seas”. HMS Dreadnought was the ultimate fighting ship of its time. Built in HM Dockyard, Portsmouth in under a year and launched in 1906, it effectively rendered all other ships obsolete. The trouble was that this obsolescence extended to the ships of His Britannic Majesty’s navy too and encouraged the first real arms race as other naval powers such as France and aspiring powers such as Germany invested in their ship building skills in an effort to produce an answer to Dreadnought. At the time it was a magnificent fighting ship and if you were a sailor in Dreadnought you really did fear nothing. The guns had a huge range larger than any other ship afloat and the iron clad hull effectively meant that the ship was immune from penetration by any known enemy projectile.

Some of you will recognise this approach to litigation. You know what I mean! Marshal massive forces on one side and blow the opposition out of the water with everything at your disposal before the enemy has a chance to respond. The trouble with that approach is that it is often ineffective today. I remember the days when a well fed corporate lawyer would seek to reassure his client with the words, “Don’t worry, I will get one of our litigation chaps to issue a writ right away”, the implication being that by bringing all their firepower to bear immediately you would blow the opposition away.

It is odd to realise now that in those days that was allowed! I am not talking about injunctions and applications for other urgent orders such as Anton Piller (search and seize) but about any ordinary claim where the issue of a writ was thought to be the initial negotiating tactic or possibly the only weapon in the armoury. Nowadays, we have the concept of proportionality introduced by the Woolf reforms of the late 1990s and the various protocols to be followed before a claim form (a writ sounds so much more intimidating) can be issued.

Si vis pacem, para bellum. If you want peace, prepare for war! These words are attributed to the works of the Roman military writer Publius Flavius Vegetius Renatus. Writing in the 4th century AD he was responsible for a sizeable treatise on Roman warfare. Whether he wrote these words or not, they have been adopted and adapted by many others over the ages.

I understand the words are the motto of the Royal Navy today!

However, you translate them, the sense of the words is clear. You may not agree with the sentiment but there is force in the suggestion that in order to have peace you have to be able to prosecute war. You may not want to, but if you are incapable of doing so, it will not be long before someone seeks to take advantage of your perceived weakness and you have war not peace.

Dreadnought came and went in a matter of a few years. Just as the Admiralty and its designers strove to achieve superiority, so litigators strive to overcome their opponents but the emphasis is now on the importance of skilful preparation rather than reliance on mere superiority in numbers. In these days of proportionality it simply is not good enough to seek to overwhelm the opposition by deluging them with paper or ESI without taking effective steps to reduce the amount involved. If you do not do so, your opponents will almost certainly complain and raise the judgement in Earles v Barclays Bank PLC given by Judge Brown in October last year.

I have written before [Readiness is next to godliness, 16 Febreuary, 2010] about the importance of litigation readiness as part of a robust strategy for litigation and it seems to me that the more lawyers talk to their clients in times of peace, the better prepared they will be to deal with war when it arrives. Anyway, just think of the opportunities to build relationships with your clients in the process! Truly, if you want peace, prepare for war!

Last Sunday was a day for thoughtful reflection in other ways too. Hard on my poached eggs on toast (delicious with marmite too) I came across an altogether less palatable subject in my Sunday Times. Michael Smith had written a full page article on the forthcoming defence review under the title: “The shape of wars to come”.

Difficult decisions will have to be made about reshaping our armed forces with limited funds whichever Government we elect in the spring. The arguments are ranged all along the spectrum from the defeatist (let’s reduce them all to one service) to the alarmist via the pragmatic but as one former Admiral put it: “Peace doesn’t keep itself…..history shows that. We need forces that defeat and deter threats to the UK and protect our interests around the world. If you forget that, you are not going to be any sort of power. You become Belgium”.

Unkind to Belgium perhaps but his meaning is clear. If you wish for peace, prepare for war.

If you have stayed with me this long you may be wondering what John Terry has got to do with all this. I do not consider him to be an expert in this field of e-disclosure although I am prepared to concede he may be or perhaps there is a litigation support manager out there somewhere, whom I have not met, called John Terry! However, you will know the one I am talking about and I am sure you do not need me to intrude on private grief given the revelations of the past few weeks. However, John Terry featured in an article by Alastair Brett, Legal Manager of Times Newspapers, far removed from the sports pages of the same Sunday Times dated Feb 7th.

Beside being drawn by the arresting title – John Terry, the accidental poster boy for press freedom – I decided to read the article because I used to know Alastair at university and although I have lost touch with him I always read his articles as a way of making me believe that I am still in contact with him. His article carried a picture of JT with a pained expression on his face (hardly surprising) and a subtitle which “hails the ruling that leaves liars and cheats exposed” as JT’s so called Super injunction was lifted and his identity was revealed.

Alastair is clearly no lover of the super injunction and I wholeheartedly agree with him. His point, however, was that we are in danger of sleepwalking into the nightmare of a judge made privacy law which only serves to “protect the immoral but legal behaviour of the rich and famous, or which enables philanderers not only to gag a free press but also to claim damages for cheating and lying to their wives and fans”.

Strong words indeed. He went on through a whole range of recent stories from Avram Grant’s visits to a massage parlour in Portsmouth, through Max Mosley’s successful action against the News of the World for invasion of privacy after his predilection for S & M was revealed, to the Sunday Sport journalist who, in 1990, gained access to the hospital room of ‘Allo! ‘Allo! actor Gordon Kaye where he was lying gravely injured following an accident.

His object was to suggest that privacy law in this country is a mess and to propose a solution but whatever the solution it seems to me that the participants would do well to assume you are going to be found out and to take steps to prepare for when it happens. If you want peace, prepare for war! You may not succeed but you will be embroiled in an unpleasant spat if you make no effective preparations.

Something to talk to your clients about, perhaps, before they become involved in their own wars?

Debevoise & Plimpton had sued former client Candlewood for $6million in unpaid legal fees and found itself facing “an answer and counterclaim” seeking damages of $55million! [Ex-Debevoise Client Raises Nasty Counterclaims in Unpaid Bills Case, The American Lawyer, 14 January, 2010]

Apparently, some of Candlewood’s allegations against their former advisers were not too flattering which only goes to show that the publicity generated by this type of dispute is often publicity the law firm could well do without.

According to Candlewood’s counterclaim, D&P managed to bill for more than 15,000 hours or the equivalent of 10 lawyers working full time for the 10 month period in question, whereas Candlewood’s Delaware based lawyers successfully represented the company for two and a half years at a total cost of $450,000.

Could this happen in England?

It is possible but it would be as well to remember an interesting part of the judgement of His Honour Judge Simon Brown QC in Earles v Barclays Bank PLC . The case is often cited as an example of justified criticism by the judge of lawyers who fail to abide by the CPR, something he described as “gross incompetence.”

But it also shows that judges in this country are now very much aware of the need to manage costs and in that case, Judge Brown made a distinction between the costs charged in the City of London and the costs charged and recoverable in Birmingham.

If Earles is followed, it looks as if clients will only be faced with “Delaware” costs for “Delaware” type cases.

David took on Goliath in Earles! As the judge said at paragraph 80 of his judgment: “Here we have an impecunious bank customer facing the might of one of the country’s largest banks and a blue chip legal team to match when he has struggled to afford to have a highly competent but small firm from Stratford upon Avon to represent him just for trial”.

The judge allowed Birmingham rates and disallowed City of London rates.

If David did not actually slay Goliath, he gave him a very bloody nose!

Not everything in this blog is intended to be light hearted, as I found myself saying the other day. A kindly soul who had expressed approval of and interest in the blog had caused me to explain that there was intended to be a partly serious side to my musings as well as a bit of fun. So for those of you who only want to be mildly entertained, you should not read any further!

Actually, I rather hope you will read on, because litigation lawyers might have missed a recent decision which is relevant to everyone who conducts litigation in this jurisdiction.

I have to admit that I am a new convert to the webpages of the British and Irish Legal and Information Institute www.bailii.org.  The website is a veritable mine of information about recent cases, and what I like is that, at a click of not very many buttons, you can find a table of recent cases with very fast hyperlinks to judgments in cases which may be of interest.

I had been looking for the judgment in a recent case with a very different subject matter (and nothing to do with e-disclosure!) which had been reported in the newspapers last week, when my eye alighted on a case several places up the list of latest cases. I had stumbled across a judgment of His Honour Judge Simon Brown QC dated 8th October 2009 in the case of Earles v Barclays Bank PLC .

As many of you will know, Judge Simon Brown is prominent in his support for proper use of such electronic means of search and review as will make for a proportionate and efficient and appropriate disclosure of documents in electronic form. The fact that this was one of his judgments caused me to read further and I am glad I did, not least because the case contains a useful reminder to litigation lawyers of the consequences of failing to abide by the provisions of the CPR.

At the end of 2008, before which there had been no reported cases on the interpretation of Part 31 and the treatment of electronic documents, there were suddenly three cases which attracted much comment.  By way of reminder, those cases were Digicel v Cable and Wireless (St Lucia), Abela v Hammonds and Hedrich v Standard Bank London.

Now, in October 2009, there is another!

The facts of the case do not matter particularly for my present purpose but in broad terms the case concerned claims by a former customer of the Bank (and indeed a former manager) in relation to certain allegedly unauthorised transfers from his personal to his (property developer) business accounts at the bank.

The case is interesting in that the judge had to deal with a number of questions relating to how the costs of the action should fall to be dealt with. A large proportion of the costs arose from the way the parties had handled their obligations under CPR Part 31 and the Practice Direction.

Those of you who wish to read the judgment in full have the reference above. It is relatively short (86 paragraphs) and is easy to read. However, those of you who just need an executive summary should read on.

As is usual in these cases, there was a conflict of witness evidence about what had actually happened between Mr Earles and the Bank’s staff over a number of years prior to the proceedings. In dealing with this aspect, the judge had a number of comments on how to assess the reliability of witnesses and went on to say about contemporaneous documents at para 21:

It is not realistic to expect any human beings to recall with any reliability what they said 3 years ago about run of the mill business transactions. Therefore it is crucial to follow the guidance of these very eminent jurists and in particular those emphasized regarding the analysis of contemporaneous documents; objective facts and documents; witnesses motives and overall probabilities. Since 2000 most key contemporaneous commercial documents are contained in Electronically Stored Information ["ESI"] – today over 90% of communications are recorded in that form – phone records, texts, e-mail, bank records etc. ESI are “documents” under the Civil Procedure Rules: CPR 31.4 and 31PD.2A. Accordingly, the rules for “Standard  Disclosure ” apply: CPR 31.6. i.e. “only” those documents that are “supportive” or “adverse” to each party’s cases. The abundance of this ESI in cyberspace means that potential litigants, in particular organisations such as Banks at the current time, need to anticipate having to give  disclosure  of specifically relevant electronic documentation and the means of doing so efficiently and effectively.

While the subject of how banks, companies and other organisations, and indeed individual litigants, retain and store documents which may be required at a later date will keep lawyers busy for ages, the judge addressed the fact that there was no litigation hold in this case and conceded that prior to proceedings there was no duty to preserve documents although the position is entirely different once proceedings are issued or contemplated. He also dealt with the issue of what adverse inferences might be drawn by the court and when, if documents relevant to the issues before the court had not been preserved and disclosed.

He noted that there had been a failure to comply with the rules and obligations relating to disclosure and said at para 31:

Contrary to CPR 31PD.2A, there were no pre-Case Management Conference discussions about the  disclosure  of any of this key Electronically Stored Information (‘ESI’). There was no apparent discussion about it at the Case Management Conference on 12th June, no  Costs  Management of the  disclosure  process despite the  Costs  Management Pilot Scheme in operation at the Birmingham Mercantile Court for the Jackson Review on  Costs  and no order made in respect of it. Order 4 provided without any particularity “the parties shall give standard  disclosure  by list (confined to Liability Issues) pursuant to CPR 31.6 no later than 4pm on 6 July 2009 with inspection by provision of copy documents 7 days notice”.

There were also issues arising from the disclosure/non-disclosure given in the case and the judge was critical of the disclosure produced by both parties but declined to draw any adverse inferences against either of them.

Having found for the Bank and dismissed the Claimant’s claim, the judge turned to the issue of costs, and this is where the case gets interesting! The bank, as the “winning party” could normally expect to be awarded its costs against the “unsuccessful claimant”.

But that was not quite what happened!

Again for those of you who want to read the whole judgment, something I heartily recommend, you have the reference above, but for those of you who want a potted summary, the section on costs begins at para 63 and continues to the end at para 86.

The most striking sections seem to me to be paragraphs 67 to 76 and these are reproduced in full below:

67. I have been critical of the ‘conduct’ by the Bank of its  disclosure  and its electronic  disclosure .
68. As regards  disclosure, the Bank failed to give  disclosure  of the Transfer Sheets referred to in paragraph 53 of the witness statement of Katharine Shelley. They were clearly relevant under the narrow test of CPR 31.6 to the primary issue in the case. The very fact that they were referred to in the carefully crafted witness statement proves that and it ought to have been obvious to the Defendants lawyers. Their absence made the task of the Court immeasurably harder to the extent that it considered lengthy submission as to whether or to draw adverse inferences against the Bank itself. I am satisfied that it was a decision of the legal team on the erroneous grounds of disproportionality.
69. As regards electronic  disclosure , the Bank, through its in-house counsel, Elizabeth Freeman, should have procured and retained Mr Leech’s e-mail account and phone records for the period covered by the three transactions questioned in the letter before action from Lodders dated 18th October 2007. In house Counsel should not have simply accepted Mr Leech’s word that there were no relevant e-mails. His lap top should have been retained in 2007 and certainly ascertained upon his leaving the Bank in November 2008. This earlier non  disclosure  of the e-mail records should have featured in the  disclosure  statement. It is accepted that it was strictly under no procedural duty to do so in civil procedure law. However, “conduct’ before proceedings can be taken into account in dealing with  costs  under CPR 44.3 (5).
70. Secondly, the Bank’s litigation lawyers should have “discussed” with the Claimant well “prior to the case management conference” the electronic  disclosure  of both Mr Earles and Mr Leech’s phone and e-mail records as expressly provided by CPR 31PD.2A2 . It did neither but did rehearse the issue of  disclosure  with the Claimant two years later in August 2009 shortly before trial. This was far too late with the result that the witnesses and the court have had to deal with a case with critical contemporaneous documents missing. This is contrary to the Overriding Objective of “ensuring” that the case is “dealt with expeditiously and fairly.”
71. It might be contended that CPR 31PD 2A and electronic  disclosure  are little known or practised outside the Admiralty and Commercial Court. If so, such myth needs to be swiftly dispelled when over 90% of business documentation is electronic in form. The Practice Direction is in the Civil Procedure Rules and those practising in civil courts are expected to know the rules and practice them; it is gross incompetence not to.
72. This is long established. In Fletcher & Son v. Jubb, Booth & Helliwell [1920] 1 K.B. 275 at page 280, Scrutton LJ approved a passage from a judgment of Tindal CJ in Godefroy v. Dalton (1830) 6 Bing. 460:
“It would be extremely difficult to define the exact limit by which the skill and diligence which an attorney undertakes to furnish in the conduct of a cause is bounded or to trace precisely the dividing line between the reasonable skill and diligence which appears to satisfy his undertaking, and the crass negligentia or lata culpa mentioned in some of the cases, for which he is undoubtedly responsible. The cases, however, which have been cited and commented on at the bar, appear to establish, in general, that he is liable for the consequences of ignorance or non-observance of the rules of practice of this court; for the want of care in the preparation of the cause for trial; or of the attendance thereon with his witnesses and for the mismanagement of so much of the conduct of a cause as is usually and ordinarily allotted to his department of the profession [emphasis added]
73. As regards ” disclosure ” (and this includes electronic  disclosure ), it is worth repeating here what was said in Woods v. Martins Bank Ltd [1959] 1 Q.B. 55 at 60, where Salmon J. said “It cannot be too clearly understood that solicitors owe a duty to the court, as officers of the court to make sure, as far as possible, that no relevant documents have been omitted from their client’s list”.
74. The  disclosure  of only the key documents in a case is absolutely essential to a Court if it is to achieve the accurate and efficient fact finding sought by the parties to civil litigation.
75. In my judgment, the ‘conduct’ of electronic  disclosure  by the Bank and its lawyers fell far below the standards to be expected of those practicing in the civil courts and I am going to take that into account under CPR 44.3 in the award of  costs  to the successful party.
76. In my judgment, if  disclosure  of these records had taken place two years ago on August 2007, there was a reasonable prospect that this matter would not have proceeded to trial and so incurred the legal  costs  it has. The Bank’s case, on my judgment, would have been unanswerable but of course the Claimant’s attitude may have been to ignore that. However, if the documents had been disclosed then a Summary Judgment application might well have been successful.

I have argued for some time that if only the courts would use the powers they already have in the CPR to ensure that parties comply with their obligations of disclosure, the costs of litigation would fall. The imposition of sanctions for failure to comply with the rules seems to me to be pretty basic stuff and yet the courts have appeared so reluctant to use their powers that parties to litigation have become used to the familiar cosy way of agreeing between themselves how the case shall be run in defiance or ignorance of the actual rules. By using the powers they have, the judges can make a real difference to the cost of litigation here and now, as this case demonstrates, and without waiting for the publication of the Jackson Report, the new Technology Questionnaire or the new Practice Direction under Part 31.

His Honour Simon Brown QC clearly agrees.

Two matters struck me forcibly on reading this judgment:

1. The words contained in paragraph 71 particularly the use of the phrase “gross incompetence”; and
2.  The level of costs allowed in Birmingham as opposed to London. Something to ponder, and perhaps the subject of another post in due course!

Litigation lawyers take note!