Court slams “reprehensible” firm for trying to shift blame for failings

Volkswagen litigation: Claims struck out

The senior Queen’s Bench master has strongly criticised a Liverpool law firm over its approach to the Volkswagen emissions case and trying to blame other solicitors for its failings.

Senior Master Fontaine described as “reprehensible” the attempt by E Rex Makin Solicitors (ERM) to blame Leigh Day after it failed to get 49 claimants added to the group register the latter was managing.

She described ERM’s conduct as “dilatory, inefficient uncooperative, disregarding of court orders and inconsistent with their obligations to their clients and to the court”.

The claims were automatically struck out in May 2019 because they had not been entered onto the register by the date specified in the group litigation order (GLO).

This was because ERM did not supply Leigh Day with its clients’ data using the template Excel spreadsheet which the lead claimant solicitors – Leigh Day and Slater & Gordon – and Volkswagen’s lawyers, City giant Freshfield Bruckhaus Deringer, had agreed as the best format to standardise data collection across the 10 claimant firms.

Instead, it sent PDFs, and only the day before the cut-off date. Leigh Day said it did not have time to extract the data and add it to the register in time, and in any case ERM did not provide all of the necessary information.

ERM obtained relief from sanctions with the agreement of Volkswagen, giving it another month to add its clients to the register; however, it neither told Leigh Day about this nor asked for its clients to be added. As a result, the claims were automatically struck out.

In July 2019, ERM made a further application for relief and also supplied Leigh Day with the Excel spreadsheet. But nothing happened on the application until earlier this year.

ERM sought a declaration that its claimants were deemed to be included on the register following service of the PDFs, but Senior Master Fontaine had “no hesitation” in dismissing the application.

While ERM may not have agreed with the Excel approach, Leigh Day as lead solicitors were “not required to obtain agreement from all of the other claimant firms, provided they fulfilled their obligations with regard to establishing and maintaining the group register as required by the GLO in a sensible and proportionate manner”.

ERM gave “no explanation” for why it behaved as it did and showed eventually that it could provide the data in Excel format.

“ERM were given two opportunities to provide the required data in the Excel format by the deadlines of, first 15 February 2019 and secondly, 18 April 2019 and the evidence demonstrates that they failed to do so because of their own intransigence and lack of cooperation.

“It was the responsibility of all claimant solicitors to cooperate with the lead solicitors to enable them to comply with their obligations under the GLO.

“By refusing to cooperate, for no good reason, or indeed any reason enunciated other than they were not obliged to provide their clients’ data in Excel form under the GLO, ERM breached the obligation in CPR 1.3 to assist the court to further the overriding objective.”

The failures to co-operate or explain its objections to the Excel approach were among the reasons the master gave in also refusing ERM relief from sanctions.

She cited as well “the wholly unjustified attempt to blame LD for their own failings, which I regard as reprehensible, and I make it clear that I am satisfied that LD fulfilled all its obligations as lead solicitors to establish and maintain the group register and did so in an appropriate and efficient manner”.

The case has progressed significantly since March 2019, with a trial of preliminary issues, selection of lead claimants, and two strike out/summary judgment applications brought by both sides.

“The ERM claimants would benefit from the decisions in their favour without having participated in the costs risks of such trial and applications,” Senior Master Fontaine observed.

Indeed, it was “a possibility” that ERM made a considered decision not to pursue the July 2019 application so as to await the outcome of the preliminary issues trial.

A final factor, she went on, was ERM’s conduct of the litigation, “which has been dilatory, inefficient uncooperative, disregarding of court orders and inconsistent with their obligations to their clients and to the court”.

It gave “an entirely inadequate explanation” for the failure to take any steps to list the July 2019 application for over two and a half years.

“The reason for the breach was ERM’s failure to comply with its obligations to the court and to act reasonably and proportionately in the group litigation.

“It had the means to enable the ERM claimants to be included on the group register just as much as the other claimant firms, and the circumstances leading to the breach were entirely within its control.” There are 91,000 claimants in the group in all.

E Rex Makin now operates as Liverpool Legal.

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