Traditionally claimants always used to plead complete claims in front of judges, so that if the judge felt minded to find for the claimant then the court would go on to award compensation at the same time. The unsuccessful defendant consultant and its insurers would be bound to pay any damages (possibly with costs in addition) within a relatively short timescale.
Perhaps as a result of fewer cases going all the way to trial, this is now not necessarily always the case and a different trend seems to have emerged. The tactic is for the claimant to ask the relevant arbiter (whether that be a judge or, more commonly, an arbitrator or adjudicator) simply to make a declaration that the consultant was in breach of duty, deferring any arguments about causation or the value of any recoverable losses to a later date.
Why would a claimant do this? Surely those who are confident that they have strong grounds for compensation should be seeking a cash award – far more valuable than a piece of paper saying that an adjudicator agrees that the consultant was in breach?
Testing the Water
Much may depend on how confident the claimant truly is. Both parties to any dispute heading for a hearing face the significant risk that a judge might prefer the other party’s evidence over their own. We talk about litigation risk as if it only ever attaches to us as defendants but logically there are just as many risks for claimants. Arguably the stakes are generally higher for claimants, who usually incur greater costs in launching claims than insurers do in defending them.
For some claimants therefore, and perhaps especially those who fully recognise the risks, the piecemeal approach may be more attractive. It means that they need not incur the further investigative costs of proving causation and loss without having the comfort of knowing that they have already overcome the first hurdle of proving breach of duty. That first hurdle may carry the greatest risk because in professional disputes it depends heavily on which expert evidence is preferred by the arbiter.
Claimants who know that their case on breach of duty could be a close call typically pursue this tactic at adjudication. This is because an adjudicator has no authority to order the losing party to pay the winning party’s costs – so claimants who lose their case at adjudication are less at risk than those who lose at trial.
Strongest Suit First
On the other hand, some claimants may have a strong case on breach but may be painfully aware that they face huge challenges in being able to prove causation or loss, which is what they would need to do in order to win at trial. Perhaps the project was already badly in delay when the negligent designer submitted drawings behind the programme; or perhaps the alleged loss comprises lost trading income during what was expected to have been a busy season but there are no historical accounts to prove that.
In these cases the claimant will generally use the success of the first hearing as a platform for accelerated settlement negotiations in the hope that they can simply gloss over the more problematical hurdles.
Morale in Warfare
Similarly the claimant might hope that in the immediate wake of success at the first hearing the consultant and its insurers will be feeling generally less bullish about the remainder of their defence. Tactically they would seek to exploit this and will try to reopen settlement discussions while the consultant is feeling vulnerable.
This point can also be relevant in cases where the claimant believes that they have further valid claims against the consultant but so far have progressed only one of them (typically the easiest win). Their expectation is that the consultants will arrive at a realistic assessment of their own exposure and their insurer will be amenable to the prospect of buying off any risk at an early juncture before costs accumulate any further.
Does it work?
Experienced defence lawyers are very much alive to the various strategies deployed by claimants and their solicitors. Part of our skill is in being able to identify clues as to where a claimant thinks its strong and weak points are and then to use those tell-tale signs to inform our own defence strategy.
There are only so many reasons why claimants might pursue the route outlined above. Sometimes it can serve both parties’ interests to focus solely on breach of duty and to see that issue properly resolved before thrashing out the others. Most of the time, however, it tells us that the claimant is concerned about its position and it seldom has the intended effect.
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