PI Brief Update

Claimant firms must prepare for the long haul - Matthew Gwynne, SpectraLegal

22/07/16. The obstructive tactics employed by many defendants will be well known to claimant clinical negligence lawyers. They can range from the sublime to the ridiculous: Ignoring protocol timelines is common; failure to settle strong cases early (forcing claimants to needlessly proceed to a full letter of claim); and, admitting liability on the eve of a trial before then querying all the avoidable costs involved.

Further, interim payments are often extremely difficult to obtain, which places even greater stresses on claimants who may then be tempted by low offers.

Yet our experience, in both the England & Wales and the Canadian markets, is that defendants will vary their tactics depending on the firm they’re litigating against.

Defendants will consider whether a firm is known to have deep pockets and tactics are often designed to do nothing more than push the claimant firm to the brink of financial collapse.

Newcomers may find these tactics particularly frustrating as they will be tested to a much greater extent in their early days than once they have a proven track record in litigation.

Multi-disciplinary firms feel similar pressures with non-clinical negligence departments feeling they shore up the delayed revenues from clinical negligence departments. It can therefore be difficult for them to hold their nerve. And whilst all firms will strive to maximise clients’ damages they will often, due to cash flow pressures, settle early their own costs negotiations, thereby sacrificing profit for cash.

With defendant tactics unlikely to change, our advice is simply: prepare for the long-haul. You can’t control defendant behaviour but you can control the way your firm operates, prepares and responds.

Cash flow pressures are often caused by the difficulty in predicting how much working capital will be required to fund such a caseload. It is not a straightforward process and needs a thorough understanding of how different case types and litigation strategies impact cash flow and working capital requirements.

In our experience, firms that proactively analyse their past cases and use these insights to predict future performance tend to be more successful at navigating the cash flow uncertainty of running clinical negligence cases.

However, whilst most firms have some sort of case management system in place the failure to keep accurate, detailed and consistent records is a common problem.

We try to help firms gain real-time clarity on the current state of their entire caseload. Only once you have this information can you know the real value in your business and make accurate future predictions.

It is also important to remember that there are finance products available to help unlock cash from WIP, disbursement and cost awards and help firms navigate these tactics.

Banks, insurers and funders continue to be active in supporting law firms in straightened times, yet in a market where a consultation on fixed-costs is imminent, those operating in clinical negligence will increasingly be expected to demonstrate a thorough understanding of the value in their own businesses and have an ability to model the impact on cash flow and profitability that these changes may bring.

Matthew Gwynne is a director of SpectraLegal
A variation of this article was first published by Solicitors Journal on 31/05/16

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