Strike while the iron's hot

Roger Pearson looks at how changing advisers during a High Court action can delay litigation and affect the outcome of a case.

The case of Mohammed Al Fayed's fake candelabra, reported in The Lawyer, 22 July 1997, ended in defeat for Al Fayed. However the case carries important messages for the profession, says Philip Rubens, litigation partner at Finers, who acted for Emanuel Antiques in the case.

He says it has emphasised the dangers of delaying litigation and the risk of such delays turning an action sterile.

Rubens believes the case illustrates the difficulties that can be created for the profession when one side switches advisers during an action.

Al Fayed changed solicitors three times during the case, which Rubens says is highly unusual in a case of this magnitude. It has provided an important ruling on the view the courts will take of the stress factor that ongoing litigation can have on those being sued.

The action began in 1991 when Al Fayed alleged that four pairs of 9ft tall candelabra he bought from Emanuel Antiques were not made in the 19th century, but were forgeries made in Italy in the 1980s.

Mayfair practice Palmer Cowen issued a High Court writ on Al Fayed's behalf. The firm continued to act for Al Fayed for the next two to three years before he switched to Kingsley Napley. Then, in October last year Al Fayed changed advisers again, this time to DJ Freeman. Four different counsel were also used along the way.

Rubens accepts that there is nothing to prevent anyone changing advisers. But he stresses that this in itself can lead to delay and disruption for both sides.

Rubens found himself having to cover ground which had already been covered by providing information which, again, had already been provided for the solicitors previously on the record.

It was these delays, and prejudice suffered by Emanuel Antiques, which tipped the scales in the company's favour. The Court of Appeal struck out Al Fayed's claim, and leave to appeal to the House of Lords was refused – although Al Fayed can still apply direct to the Law Lords for leave to challenge the verdict of the Court of Appeal.

Previously, in the High Court, Mr Justice Dyson had accepted that there had been inordinate and unacceptable delays in the case but refused to strike out the claim on the basis that Emanuel Antiques had not suffered sufficient prejudice to justify such a move.

The Court of Appeal, however, disagreed. In reaching its decision, the court took into account the anxiety caused to company chief Emanuel Naghi by the prospect of the pending litigation, and it did so even though it was the company, rather than Naghi himself that was being sued.

"They decided the matter had been hanging over the defendant far too long and therefore there had been prejudice," says Rubens. "The fact they considered the anxiety caused to a director of the defendant company is in itself unusual."

Rubens sees the decision as a re-enforcement of Lord Woolf's aim to speed up the course of litigation, and as a warning to the profession to make it absolutely clear to clients that if cases are allowed to remain inactive for lengthy periods they will run the risk of strike out motions.

The danger is that if such warnings are not given, a client could have grounds to sue for negligence. An increasing number of cases are now reaching the courts in which solicitors are being sued over claims that have been struck out, he says.