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Mitchell puts Kafka in the shade, say stressed-out lawyers

Widespread anxiety that the Mitchell judgement would hike professional indemnity insurance premiums has abated, thanks to 'common sense' guidance on relief from sanction. 

The judgment denied relief from sanctions for a late budget - effectively changing the face of civil litigation overnight.

'Kafkaesque' chaos engulfed the civil courts, according to comments in the Law Society Gazette by David Marshall, managing partner of Anthony Gold. 

'Stress levels soared,' Marshall recalled. 'Professional indemnity insurance premiums threatened to go through the roof.' 

Lord Dyson seems to have taken the widespread concerns on board. The Master of the Rolls heard three appeals relating to relief from sanctions, giving judgment in each and issuing fresh guidance on dealing with similar cases in future. 

Desmond Hudson, chief executive of the Law Society, which intervened in the three cases, told the Gazette: 'The guidance has clarified the factors which the court believes should be taken into account. The court's previous decision in Mitchell and the way it was being applied by the lower courts had resulted in disproportionate penalties and a breakdown in co-operation between parties, clogging up the system and introducing huge uncertainty into the whole process of civil litigation.'

Professional indemnity woes continue

Meanwhile, the insurance market covering law firms is facing significant worries of its own.

Policyholders with Latvian insurer Balva received fresh hope of making a successful compensation claim after the Financial Services Compensation Scheme (FSCS) declared Balva to be 'in default' - which means the FSCS can accept eligible claims against Balva. 

The corollary, according to a report in the Law Gazette, is that hundreds of law firms are thought to have signed up to policies for indemnity cover with the unrated insurer. 

Elsewhere, there are signs of a seismic shift in market dynamics, with the NHS Litigation Authority reporting an 'unprecedented' level of new claims as personal injury solicitors branch out into clinical negligence.

The story revolves around the NHSLA's annual report which has revealed that the number of clinical negligence claims rose by almost 18% in 2013/14 compared to the previous year. 

A report in the Times claimed that the spike in negligence claims against the NHS means every taxpayer faces a £1,000 bill; the analysis of its failings in negligence will perhaps be dealt with on another day. The NHS has outstanding liabilities of £25.6 billion for clinical negligence, says the Times, and its lawyers are calling for action to cap the spiralling cost of hospital blunders. 

Wonga, Cash & Spondoolies

On a more upbeat note, PremExtra observed the news that everyone's favourite loans company Wonga has been making up fictional law firm names to pursue late paying customers, and we were amused when that led to a request from the Law Gazette's Obiter for suggestions of more imaginative law firm names. 

Cue a deluge of witty suggestions. Here's a selection of our favourites: 'Conners & Snyde' or 'Cutts & Burns' were suggested by Joanne Twemlow of Manchester, while Duncan Brown of Ipswich paid tribute to the late Rik Mayall with 'B'stard & B'stard'. However our personal favourite goes to Olivett Ihama of Kenilworth who came up with the pithily monikered; 'Rock, Harde & Place LLP'.