Is a solicitor under a duty to warn their client of risks falling outside their retainer?
(1) UPL Europe Limited (2) UPL Deutschland GMBH v (1) Agchemaccess Chemicals Limited (2) Grosvenor Chemicals Limited (3) Mr Nicholas Gooch  EWHC 2889 (Ch)
The substantive claim related to the Defendants’ trade, under EU Regulation, in Plant Protection Products (“PPPs”) and legislation-imposed requirements as to the nature of products that are authorised to be sold within Member States.
Part of the Claimants’ argument was that PPPs must be identical in that they are chemically similar and have a common origin, which was described as “manufactured by the same company or by an associated undertaking or under licence in accordance with the same manufacturing process”. In contrast, the Defendants argued that it was sufficient for PPPs to be “identical in composition”.
Owing to the complex and technical nature of the dispute, at a previous Costs and Case Management Conference (the “CCMC”) on 21 January 2016 Master Clark ordered that the parties were evidence in the field of chemical analysis and testing of plant production to drill down into the chemical structuring of the product that was central to the parties’ dispute in this claim. The Master before whom the current application (the “Application”) was heard, Chief Master Marsh, noted that it was clear from Master Clark’s order that “the need for and scope of expert evidence” in the claim was important. Before the Application, the parties had been due to exchange experts’ reports by 14 October 2016.
In the run up to this deadline, on 8 September 2016 the Claimants’ solicitors had written to the Defendants’ solicitors to note a change of position on their part in that there was no longer the need for expert evidence. In correspondence, the Claimants’ solicitors asked that the Defendants provide specific details as to their proposals for chemical expert evidence. However, the Claimants did not receive a response and so on 21 September 2016 the Claimants wrote again to repeat this request. Again, no response was received. Separately to this, the First and Third Defendant’s solicitors engaged in a conversation in which they noted that their clients might not seek to rely on expert evidence. Following this conversation, the Claimants’ solicitors again wrote to the other side and noted that, should a response to their first letter not be forthcoming by 7 October 2016, the Claimants would make an application to the court for an order that the First and Third Defendant could not rely on expert evidence. Despite this, the Claimants still did not receive a response and accordingly, on 10 October, the Claimants issued the Application.
Despite the verbal indication that they might not rely on expert evidence, on 20 October 2016 the First and Third Defendant’s solicitors provided a witness statement which noted, for the first time, that their clients had moved quite far forward in preparing expert evidence and that they anticipated exchanging reports by the deadline of 14 October. The witness statement, however, neglected to explain or engage with the methodology used in respect of the scope of the experts’ evidence and testing the products.
At the hearing of the Claimants’ Application, the Court focused on reviewing the issues about the expert evidence in order to give directions as to its production. The Court ordered that the Claimants, First and Third Defendant were to hold discussions about the expert evidence in order to agree its scope and methodology and ultimately the joint statement that would be produced for the Court.
In respect of the costs incurred by the parties, the Claimants argued that the Application was necessary, owing to the Defendants’ lack of engagement on this discrete issue, and therefore sought that the First and Third Defendant pay the Claimants’ costs. On the other side, the First and Third Defendant sought to refute this point by noting that fault lay with both parties, in that the Claimants were “unduly aggressive”, both in their previous correspondence and in the hearing itself, and that as such there should be no order for costs.
Chief Master Marsh decided that it was clear that an order for costs should be made in favour of the Claimants. He held that the First and Third Defendant had offered no explanation as to the delay in responding to any correspondence, nor had they sufficiently demonstrated why the Claimants’ behaviour could be described as “unduly aggressive”. In fact, he said, the Claimants’ solicitors approach was “measured and sensible”. He continued to state that, in circumstances where expert evidence is required, it is appropriate for parties to the claim to engage in discussions to establish the scope of the issues that are to be examined; in this case, it was clear that such attempts would be necessary, given the technical and scientific nature of the dispute and the PPPs that were to be discussed in an expert’s statement. By ignoring the Claimants, and then attempting to produce their own expert evidence, this amounted to a bid by the First and Third Defendant to “wrong-foot” the Claimants. Any engagement as to the scope of an expert’s report prior to its production would ultimately have saved costs, since it was more likely the report would be more concise and deal with only the core issues surrounding the chemical composition of PPPs.
Chief Master Marsh ended his judgment by noting that it was acceptable for the Claimants to have brought the Application under the circumstances. He said that the First and Third Defendant’s conduct in dealing with the issue of expert evidence was unacceptable and consequently that they had failed to comply with the duties under the Civil Procedure Rules (specifically Part 1, section 3 – “the parties are required to help the court to further the overriding objective”).
The First and Third Defendant were accordingly ordered to pay 85% of the Claimants’ costs of the Application.
This case should serve as a warning about the importance of clear communication between the parties to clarify issues in the matter. Creating and maintaining a channel of communication will potentially help to save costs and speed up lengthy litigation processes, and avoid the need for possible satellite litigation centred around discrete issues.
This legal update was written by Lilly Whale.
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