Workshop 2- Advising the client, further case analysis, letter before claim PDF

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Workshop 2- Advising the client, further case analysis, letter before claim...

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Dispute Resolution workshop 2- Advising the client, further case analysis and letter before claim

Outcomes: 1. Write a letter of advice to a client 2. Evaluate critically the effect of further evidence upon case analysis 3. Write a letter before claim Preparation task: Read the attached email and follow James’ instructions. Please draft sections, including sub-headings if appropriate, that I can drop into the draft letter to complete it. Under the heading “Clarkes’ claim against DMS” you should address:  The legal basis of Clarkes’ possible claim against DMS (the specific contract terms that give rise to the claim);  The factual basis of the claim (how the above terms were breached);  What evidence is currently available to prove this; and  What further evidence is needed. Under the heading “Remedy – compensation” you should address:  What the claim against DMS is actually worth;  What evidence is currently available to prove this; and  What further evidence is needed. Under the heading “Merits of Clarkes’ claim against DMS” you should address:  How strong you think the claim is, based on evidence currently available; and  Any weak points you believe the case to have. Under the heading “Next steps” you should address:  What we need Clarkes to do; and  What we will do. Drafting the letter below my writing in different colour.

ULaws LLP 2 Bishops’ Row Leeds LS4 9HQ FAO Alison Branning Clarke & Sons Limited 24 Arthur’s Wharf Leeds LS15 6DW

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Dispute Resolution workshop 2- Advising the client, further case analysis and letter before claim

4 October xx18 Our ref: 3348.2000/JM/AT

Dear Alison Claim against DMS in respect of ‘A Striker’s Dream’ Thank you for your instructions to act for Clarke & Sons Limited (“Clarkes”) in its dispute with DMS (Printers & Bookbinders) Limited (“DMS”). Further to our recent meetings I am now in a position to give some preliminary advice on the matter. Background facts In January xx18 Clarkes was approached to publish a biography entitled ‘A Striker’s Dream’ about the well-known professional footballer Zeno (“the Biography”). Clarkes intended that on publication the Biography would retail for £25.00. On 2 February xx18 Clarkes entered into a contract (“the Contract”) with its usual printer and binder, DMS. The Contract price was £325,000 including VAT. By clause 2 of the Contract DMS agreed to print and bind 500,000 laminated hardback copies of the Biography (“the Finished Books”). By clause 4 of the Contract DMS agreed to deliver the Finished Books to Clarkes by 26 May xx18. By clause 5 of the Contract Clarkes agreed to pay the Contract price to DMS in two instalments, the first (£125,000) on delivery of the Finished Books, the second (£200,000) on the broadcast in July xx18 of a television show called ‘Shooting Star’, this second instalment to be paid in any event no later than 26 July xx18. DMS knew that “Shooting Star” and the Biography featured the same person. Time for delivery of the Finished Books in accordance with clause 4 of the Contract was expressed to be of the essence. First dummy and then example printed and bound copies of the Biography were supplied by DMS to Clarkes in accordance with clause 3 of the Contract. Emma Carter, Clarkes’ head of Quality Control, examined these copies and found them to be satisfactory. DMS delivered the Finished Books, purportedly in accordance with clause 4 of the Contract, on 26 May xx18. At Clarkes’ request this delivery was made by DMS to a warehouse owned by Thompsons Limited (“Thompsons”). Emma Carter checked some loose finished copies of the Biography that came with the delivery of the Finished Books and found these copies to be satisfactory. This being the case and in accordance with Clarkes’ normal policy she did not examine the Finished Books at this point. Clarkes therefore immediately paid to DMS the first instalment of the Contract price in accordance with clause 5 of the Contract. In mid-June xx18 Clarkes distributed some of the Finished Books to a number of retailers. Almost immediately complaints were received as to the quality of these books. An issue with their glossy laminate made them unsaleable. Emma Carter inspected returned copies of the Finished Books and copies still stored with 2

Dispute Resolution workshop 2- Advising the client, further case analysis and letter before claim

Thompsons and confirmed that the Finished Books were defective in a way that meant they could not be sold. Virtually all of the Finished Books in Clarkes’ possession were subsequently given to a charity that distributes books to the developing world. Clarkes has not paid to DMS the second instalment due under clause 5 of the Contract. Clarkes’ claim against DMS 1. The legal basis of Clarkes’ possible claim against DMS In the contract between DMS there were no express terms as to how DMS should print, bind and cover books and in addition to this there was nothing stated as to the standard of laminate DMS should use. However, the law implies some terms into the contract which were not fulfilled. The Law requires the work to be done with satisfactory quality and that DMS use reasonable care and skill in producing the books.

2. The factual basis of the claim (How the terms were breached) Clarkes will need to show when producing the books DMS did not use reasonable care and skill as there was a problem with the printing and that the books were not produced to a satisfactory quality as it was wrinkled with the cover coming of in places. The claim against DMS arises due to DMS not following its contract. In the contract between Clarkes and DMS it specifically states that DMS will provide printing, binding and delivery services in respect of the biography, in addition to this DMS agreed to provide this for a price of £325,000 under clause 5 of the terms. 3. What evidence is currently available to prove this The evidence we have to prove the above is in the form of the book themselves, Alison Branning’s proof of evidence and the letter of complaints Clarkes received from its retailers. 4. What further evidence is required The further evidence we require is the proof of evidence from Emma who also carried out some tests on the book, we will need evidence from her to the type of tests she carried out and what her findings were. In addition to his we will need Professor Harding’s report on his findings. Consequences of DMS’ breach of contract As a consequence of DMS’ breaches of the Contract all copies of the Finished Books had to be withdrawn from sale. [Note to trainee from James: I might add a little detail here when I’ve seen your wording for the section above].

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Dispute Resolution workshop 2- Advising the client, further case analysis and letter before claim

Further printing of the Biography was arranged with International Printers (London) Limited at a cost of £375,000 including VAT. These additional copies of the Biography eventually went on sale in September xx18, 6 weeks after ‘Shooting Star’ had aired. This delay caused Clarkes a loss of profit in the amount of £542,275. On the facts currently presented, subject to further information, it appears that DMS is responsible for the problems with the Finished Books and the consequences that followed, and that Clarkes is therefore entitled to an appropriate remedy from DMS. Remedy – compensation 1. What the claim against DMS is actually worth Printing First Clarke will need to show that they paid DMS £125,000 and an additional £375,000 to International. The total paid for printing is £500,000 which means Clarkes has paid £175,000 more than the agreed printing costs with DMS which was worth around £325,000. Profit Clarkes also argue that they lost £542,275 in profits alone which does not include printing. Total The total losses Clarkes have suffered with the additional printing costs of £175,000 and profits loss of £542,275= £717,275. 2. What evidence is currently available to prove this The available evidence Clarkes has in the form Alison Branning’s proof of evidence which states the losses, as well as a written contract between Clarkes and DMS. In addition to this Clarkes have paid £125,000 of the first instalment which is stated in the contract so they will also have a receipt of this. 3. What further evidence is needed The further evidence required is to prove that Clarkes paid International £375,000 for printing. A contract will need to be provided to prove this as well as statements from the parties that were involved in the negotiations.

Merits of Clarkes’ claim against DMS 1. How strong you think the claim is, based on evidence currently available Clarkes’ does have a potential claim but it is still relatively early to state how strong this claim is. Further evidence from Professor Harding report, the proof of evidence

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Dispute Resolution workshop 2- Advising the client, further case analysis and letter before claim

from Emma as well as the contract with International would clear up some of the potential arguments DMS could put forward and show that DMS were indeed at fault. 2. Any weak points you believe the case to have DMS are likely to argue the damage was caused due to the post-delivery storage from Clarkes’ so evidence will need to be provided to prove that this was not the case. There may also be arguments has to why Clarkes’ paid £375,000 for a new printing contract and did not mitigate its losses. Next steps 1. What we need Clarkes to do Firstly we need Clarkes’ to go over this letter and check all the background information stated is all correct and there is not anything missing. Secondly we need Clarkes to provide us with the evidence listed above in the form of Alison Branning’s proof of evidence, the letter complaints from the retailers, Emma’s proof of evidence, the finding of Professor Harding, the receipts of the first instalment payment to DMS, the written contract with both DMS and International. The accounts of Clarkes will be key to show the losses, the issue of mitigation, the resale of the books and reprinting of the books. We will need Clarkes to act quickly in producing this evidence to us so we can begin the next process. Clause 9 of the contract between Clarkes’ and DMS gives Clarkes’ 12 months from the delivery of the goods to bring any claims. As the Finished books were delivered on the 26 th May xx18 we have until 26 th May xx19 to bring any claims in regards to this. 2. What we will do Once we have gathered the relevant evidence we will begin to work on the next steps of possibly writing to the other side in regards to bringing litigation proceedings or trying to settle the dispute through mediation as early as possible without impacting the relationship of the parties, or the public image. In the meantime should you have any other concerns or urgent queries please do get in touch. I look forward to hearing from you. Yours sincerely JAMES MAXWELL Partner

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Dispute Resolution workshop 2- Advising the client, further case analysis and letter before claim

Workshop task 1: 1. For each document explain  

Whether it relates to “liability” (who is at fault) or to “quantum” (the value of the claim) Whether (and if so how, on the facts) any aspect of it -helps -harms, or -raises a new question about Clarkes’ case against DMS.

Document 1 contract with International Printing confirming the cost of additional printing which is £375,000. Quantum The first document is a quantum as it helps establish the value of the claim since it helps proves Clarkes’ claim in regards to making payments for the additional printing. It proves Clarkes’ point of paying £375,000 for the printing and strengths their case on loss. Document 2 account sheet showing a profit loss of £542,275. Quantum The second document is a quantum in that it supports Clarkes’ claims of how much profit they have lossed. It backs up the claims in Alison Branning’s proof of evidence that the loss was around the region of £542,275. Further investigation would need to be done as to whether this profit & loss occurred as a result of the breach by DMS or would they have suffered this profit & loss anyway. Document 3 contract with Thompson Limited for storage of the books that sets out the acceptable humidity levels for the warehouse. Liability The third document is a liability which would show who is at fault. This document raises a new question about Clarkes’ claim against DMS as the contract includes the acceptable humidity levels of the warehouse. This would show us whether the Clarkes’ were to blame for the state of the books by storing the books at Thompsons’ warehouse if the humidity levels were not right for such books. Document 4 Professor Harding report Liability One way this can support our claims is as binding used should have been suitable but from Professor Harding’s tests it was found to be 45% below its usually strength which indicates the binding used failed on this occasion and this could be the sole cause of the books being in a terrible state. In addition to this Professor Harding states the binding agent seems to have been damaged because of too much heating being applied to it i.e. more than 20 degrees. Furthermore Professor Harding states binding could be damaged if it is stored under very low or very high temperatures which could be the reason for the books being in such a state. So it could be that the binding agent was damaged in storage before application which would suggest its DMS’s fault. 6

Dispute Resolution workshop 2- Advising the client, further case analysis and letter before claim

One way Professor Harding’s report can work against us is because Professor Harding states he has not inspected DMS’s facility, so has not been able to explore where the binding was carried out and stored. Harding also states he has briefly examined our facilities, he states that the wrinkling could have been caused by the storage after the application, so Clarkes’ would need to find a way around this and show that this was not the case. Document 5 DMS letter to Alison on their own investigation. Liability The fifth document relates to liability. This document harms Clarkes’ investigation has the in house expert Mr James Daly found that the binding agent or laminate used had no problems. Further to this he believes the problem could be caused due to the poor storage of the books. This goes against Clarkes’ and suggests that their problem was not with the way the books were produced but was with the way Clarkes’ stored its books. Although we may be able to argue that there is a lack of impartiality as James Daly is an inhouse expert that works for DMS so is the findings credible? Document 6 telephone notes with Sam Phillips. Quantum Documents 6 and 7 telephone notes relate to quantum as it shows the value of the claim is. Document 6 helps Clarkes’ case as it shows the quote being too high for them and the business trying to mitigate its losses by trying to find the best possible price. We are told they were offered £385,000. The question that needs answering is could Sam’s company Bubble Printing CO have produced the books nearer to the show which would have meant they paid £10,000 more but in the end saved Clarkes’ from the huge amount of profit loss they ended up having. Document 7 telephone notes with Huan. Quantum. However, document 7 may work against Clarkes’ and it raises a question over how much Clarkes’ are seeking from their printing costs. Document 7 Clarkes’ were being offered £365,000 which is £10,000 less than what they paid DMS and in addition to this they were told the books could be delivered to them by the 31st of July which would have been two weeks after the airing of shooting star. With Clarkes’ declining such an offer not only did they pay £10,000 more their books were also delayed by more than 6 weeks so overall document 7 indicates they were getting a better offer all round by FirePrint. The question Clarke’s would need to answer is why they went for International Printing instead. Document 8 telephone note recycling. Quantum Document 8 telephone note relates to quantum and again shows how much the claim is worth. This harms the case of Clarkes’ and raises questions. Clarkes’ will need to answer questions as to why they did not take the £1,000 and mitigate it losses and instead gave the books away for free. Document 9 Smiths Books, music and DVDS. Liability. A letter by Smiths shows liability. This will help Clarkes’ as Ben from Smiths indicates exactly what was wrong with the books and how laminated covers started to come away 7

Dispute Resolution workshop 2- Advising the client, further case analysis and letter before claim

completely. Although it does indicate what was wrong with the books there are still questions to be answered which this does not provide as to exactly what was wrong with the books was it due to how they were created so DMS to blame or was it Clarkes’ fault for the storage. Although we maybe able to compensate this through Professor Harding’s report to show the problems which he indicates. 2. Overall, how does the new information affect your assessment of the merits of Clarkes’ claim against DMS? Professor Harding’s report is not conclusive, there are issues to consider in relation to the storage, the issues around loss and mitigation. We also need to consider the inherent risks and uncertainties of litigation. Even with Professor Harding on side it is not clear cut whether the claim will succeed. It will depend on how well the other sides expert and other witnesses perform at trial and how Professor Harding himself performs. These are some uncertainties as well as general risk around litigation.

Workshop task 2: A partial draft of the letter before claim is attached to this task. Continue and complete the draft letter before claim.

ULaws LLP 2 Bishops’ Row Leeds LS4 9HQ DMS (Printers & Bookbinders) Limited 17 Quarry Street Leeds LS17 6BW 12 October xx18 Our ref: 3348.2000/JM/AT Dear Sirs Letter before Claim Clarke & Sons Limited -v- DMS (Printers & Bookbinders) Limited Printing Contract dated 2 February xx18: ‘A Striker’s Dream’ We are instructed by Clarke & Sons Limited (“Clarkes”) of 24 Arthur’s Wharf, Leeds LS15 6DW. This is a Letter before Claim in accordance with the Practice Direction – Pre-Action Conduct and Protocols in the Civil Procedure Rules (“the Practice Direction”). We are instructed to recover damages for breach of the above contract. Factual background

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Dispute Resolution workshop 2- Advising the client, further case analysis and letter before claim

On 2 February xx18 Clarkes entered into a contract with you (“the Contract”) for the printing, binding and delivery of a biography entitled ‘A Striker’s Dream’ about the professional football player Zeno (“the Biography”). The Contract price was £325,000 including VAT. Under the Contract you agreed to print and bind for Clarkes 500,000 laminated hardback copies of the Biography (“the Finished Books”). You also agreed to deliver the Finished Books to Clarkes by 26 May xx18, time being of the essence. You knew that Clarkes’ publication of the Biography was intended to coincide with the broadcast in July xx18 of a television show called ‘Shooting Star’, which featured the same person as the Biography. You delivered what you purported to be the Finished Books on 26 May xx18. In accordance with the Contract Clarkes immediately paid to you the first instalment of the Contract price, being £125,000. In mid-June xx18 Clarkes distributed some of the Finished Books to a number of retailers. Almost immediately Clarkes received complaints from these retailers as to the quality of the distributed Finished Books. Clarkes’ claim against you Legal basis By entering into a contract with our client it became your responsibility to ensure the books were printed, binded and covered to a satisfactory quality. You needed to ensure that you took reasonable care and skill in producing the books. Factual basis We have advised our client that your actions were a breach of contract as the books were no...