By Kalvin P. Chapman

I have been in law since 2006.  At one stage I offered a service (and still do) for defending order for sale cases brought by the Child Support Agency (as it then was).  This article is an explanation of why saving money on lawyer’s fees can be a very expensive failure in your case.

A client would call.  They would explain that the CSA had issued an order for sale application.  This is a process (originally set up by me for the CSA when I worked for a much larger firm and had the CSA as a client) where the CSA asks the Court for an Order to sell your home in order to repay child maintenance that is outstanding.  It is one of the most draconian areas of civil law outside of Family Law.  You, your spouse and your children will be removed from the property and you must find somewhere else to live.  The CSA would then sell your home.  After paying off the charges (including the child maintenance charges) and mortgage anything that is left is given back to you.  It is pretty heart-rending stuff.

So, these clients would ring.  They have a CSA order for sale application.  But, they read a few articles on a website and decide they did not need any legal advice because someone told them Magna Carter means the CSA cannot take your home.  So, they submit their own defence, despite not understanding what legal issues it is that should be brought up in such cases.  They then attend a hearing and are stunned that a Court is not interested in the issues they raised, and the order for sale is granted, giving the CSA about two months before they take the property.

It varied, but I would usually get the call the day after the hearing and sometimes on the morning that the bailiffs were due to attend and take them property.  Some waited until after the bailiffs had taken the property to call me.

But at least they saved on lawyer’s fees.

Most civil lawyers get this, but some get it more than others.  It is made worse by websites and youtube channels that produce “legal advice” that is hopelessly wrong.  I have had to face such people in Court.  They misunderstand the law and do not understand what the Court can and cannot do.

I have only ever done litigation, except for a short six month period where unfortunately I was exposed to conveyancing.  I have therefore seen the “save on lawyer’s fees” legal defence a lot.  I have seen the disastrous outcomes of people saving on lawyer’s fees.

The law can be complex.  Muldoon Britton’s UK and US solicitors have a specialism in financial litigation, though we take on virtually all litigation cases, which in practice in is chiefly commercial litigation.  We need to know about complex rules (PRIN, COBS, APER etc) relating to how a bank operates, we need to know and understand complex decisions by the Courts relating to these types of cases and we need to have a very good working understanding of financial products sold by banks.

When the FSA announced the review in to the sale of Interest Rate Hedging Products in 2012, we knew that a submission in those cases had to be very specific to the rules of the scheme, the rules governing the sale of IRHPs and we also needed to take account of the law.  Muldoon Britton’s Kalvin Chapman had a 100% success rate in the review because he knew this and fully understood it.

We have spoken to many businesses who either opted for the cheap option or elected to save on lawyer’s fees altogether and represented themselves in the IRHP review.  In the vast majority of those cases the bank’s customer got what they paid for in terms of legal representation.  Firms (including claims management companies) that charged nothing or virtually nothing to review their cases seemed like a great option.  The problem was, they only used paralegals or unqualified staff and rammed as many customers through as possible on the expectation that they would lose some and thus needed more clients to cover those losses.  The outcome was hurried submissions that did not include an adequate review and analysis of the case.

The alternative was the client saving on lawyer’s fees.  They produced their submissions aided by people they knew on-line.  They proved “mis-selling” in their submissions.  They then either got an alternative product or got a rejection in the FCA IRHP Review.  So they appealed this decision, again aided by their friends on-line.  When they lost again, they then contacted lawyers only to be told that there is in fact no such thing as “mis-selling” in law and their submissions failed to identify the legal and regulatory issues that needed to be highlighted in order to succeed in the review.  The FCA IRHP Review only had one chance to appeal.  Many customers used that appeal before speaking to an experienced and qualified solicitor or barrister.

For the lucky ones, they could go to the Financial Ombudsman Service, where we were able to fix the problems.  For the unlucky ones, their appeal was exhausted in the review, they were time barred (so could not issue in court) and they were incapable of going into FOS (such as having 10 or more employees).  That’s the end.  No redress.  No tear up. A future of payments to be made on the IRHP plus the suspended payment needing to be repaid.

But at least they saved on lawyer’s fees.

We are now faced with cases involving Foreign Exchange (FX), RBS’s Global Restructuring Group (GRG) and LIBOR.  There are still people that will be demanding that they get free legal advice otherwise they will not use a lawyer of any description.  Or they will go for the cheap option – quite often a claims management company, sometimes a law firm.

Muldoon Britton expects to win.  If you are likely to lose your case, we will tell you this and explain why.  It makes no sense in spending your money (or if we are funding it, our money) on pursuing a case that cannot succeed.  If your case has merit, we will tell you this and explain why.  With Muldoon Britton, you get the experience, you get the successful historic wins.  But most of all, you get value for money with an honest appraisal of your case.  You can buy quality.

In order to understand how a case should go forward, the case must be reviewed.  We have no doubt that you will find a law firm that will review your case for free and offer you a “no win no fee” arrangement.  The principal aim of this article is to ask you to consider what this means and how that could ultimately impact your case.

In most financial litigation cases we have dealt with, much of the case pivots on the contents of one or two documents – usually emails.  Someone says something, someone admits something or terms and conditions are or are not explained.  That can win a case and it can lose a case.  A good example to look at is the second of the first wave of IRHP cases, Green & Rowley v RBS.  Their case was decided upon based upon one memo produced by the Bank because Green & Rowley had no contemporaneous documents.  The Judge preferred a contemporaneous memo of less than one page than he did a modern witness statement.  In PAG v RBS in regards to the LIBOR issue, the Court found that the directors of PAG had not relied upon representations about LIBOR based upon contemporaneous emails.

Reviewing a case is not just looking at it to see what the case is.  A proper review of a case is (or ought to be) identifying those contemporaneous statements made by you and the otherwise.  What you say now is almost certainly coloured by what you have been told recently about your case.  What caries real weight in Court is what you were saying at the relevant time.  Identifying the important evidence and the relevant statements made at the time in question is what will usually make your case or kill it.  Identifying evidence early that hurts your case gives you a better chance of dealing with unhelpful issues before they become a disaster.  Only experienced lawyers know what those documents and issues are.

A review by a good solicitor who is experienced will involve a detailed look at contemporaneous documents.  That takes time.  That is what you are paying for, together with the experience.  When a solicitor at Muldoon Britton tells you that you appear to have a good case following such a review, you know you can count on that.

The real money saving experience is being told why your case cannot succeed, if that is the case.  It is far better to call a halt to the case before you issue it than to get to trial and lose, by which points hundreds of thousands of pounds have usually been spent between the two parties.  Some go into the millions.

In the course of signing up, those clients whose only criteria is that the legal services are free at the point of use lose the benefits gained by those whose criteria is quality legal representation from an experienced solicitor.  Have a look on the internet forums for people who lost everything because they used a law firm that was not experienced or they used a law firm that simply had too many clients, needed because they did everything on a CFA, with little to no revenue for 18 – 36 months.  Look for the people who used claims management companies because they offered to do all of the work for free.  It is likely those bank customers will tell you now that you get what you pay for, and a quality solicitor with good experience may actually be worth-while.

Finally, when considering what representation you want, saying “no win no fee” has a different meaning in 2017 to what it meant in 2012.  It is vastly different, and ultimately is unfair to you the client and us the law firm.

Previously a fee arrangement meant either a contingent fee (they take a cut of the money you are awarded, but this could not be used for litigated cases) or a conditional fee agreement (they get their hourly billing plus an uplift paid by the other side if you win).

The law changed in 2013.  Under the terms of a Conditional Fee Agreement, a law firm would charge an hourly rate, but would only claim it in the event you win.  They would, within the CFA, also charge up to 100% of the hourly billing additionally – known as an uplift.  You would also have After The Event Insurance, the insurance that covers you against the costs of the other side if you lose.  The premium for the ATE would also be recoverable from the otherwise if you win.  ATE premiums can be substantial.

The changes in 2013 removed the ability to recover the up-lift of a CFA and the ATE premium from the other side if you win.  That means that the hourly billing would be recoverable from your opponent, but the