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Negligence claims against law firms decrease by nearly 50%

27th Jan 2016

It has been revealed that the number of professional negligence claims against law firms in the High Court has almost halved in a year, according to data compiled by the firm RPC. However, the firm warned that there was a large amount of potential litigation in the background of the findings.

The decrease from 418 cases in 2014 to 221 cases in 2015 is mainly the result of a fall in the number of claims caused by the financial crisis, as time has run out to pursue the majority of ‘credit crunch’ claims.

According to RPC, the majority of claims against solicitors over the past year have come from women disappointed with their divorce settlements, or have emerged from litigation using ‘no win, no fee’ agreements.

However, the firm also stated that property or conveyancing disputes regarding subprime mortgages from the financial crisis could still result in more claims against solicitors who assisted their clients in buying properties at inflated values.

RPC said that many of these cases have been frozen under ‘standstill agreements’, meaning that the official figures may not be an entirely reliable indication of a drop in claims against solicitors.

The drop also comes after the number of negligence claims increased by a third in 2014, meaning that the 221 negligence claims against solicitors in the last year is still more up 55% on the 143 cases in 2012/13.

Joe Bryant, a partner at RPC, said the fall in claims does not mean solicitors have seen the end of recession-related claims.

“A large number of property and conveyancing cases are still sitting there dormant for now, whilst the claimants and their legal teams accumulate the evidence they need to bring their cases in front of a court,” he said.

He also noted that “Due to the volume of claims that institutional lenders have pursued against solicitors and valuers since the recession began, we have seen a significant number of requests for these agreements over the past year or so, as claimants have struggled to get all of their claims up and running within time.”

“These cases are being brought on an industrial scale, on the back of carefully targeted advertising campaigns to bring the claimants through the door,” Bryant continued to say. “Given that the court rules don’t require the loser to pay the winner’s legal costs until the matter reaches formal litigation, firms are launching into often spurious scatter-gun cases without starting court proceedings, purely in the hope of getting a low “nuisance” payment, free of any down-side if they fail.”