File review and issue identification - Identifying legal iss...

Learning Outcomes

This article sets out a structured approach to file review and issue identification for SQE2 practice, including:

• Isolating material facts, distinguishing allegations and gaps, and building a reliable chronology to test limitation and procedural steps
• Framing clear legal issues from the facts and separating questions of law from factual disputes
• Mapping issues to causes of action by checking each legal element against available evidence
• Identifying realistic remedies and relief and noting constraints on equitable relief
• Evaluating substantive and procedural defences available to both sides and their likely impact on liability, costs, and timetable
• Producing a clear, issue-led report that records client objectives, risks, costs information, and recommended next steps
• Using concise analysis that can be verified in practice, with research trails and update checks
• Presenting findings in a format that supports supervision and action planning, with clear headings, numbering, and citations

SQE2 Syllabus

For SQE2, you are required to understand how to conduct a comprehensive file review and identify legal issues, causes of action, remedies, and defences arising from case papers, with a focus on the following syllabus points:

• evaluating case papers to extract relevant facts and building a chronology to test limitation and procedural steps
• identifying and precisely stating legal issues that arise from the facts, framed as answerable legal questions
• distinguishing between factual disputes, evidential gaps, and legal questions
• mapping facts to law using a five-level approach (source of right, cause of action, legal elements, propositions of fact, items of evidence)
• analysing facts to determine potential causes of action and available remedies (damages, injunctions, specific performance, rescission)
• identifying substantive defences (e.g., limitation, exclusion clauses, contributory negligence, illegality, self-defence) and procedural defences (e.g., service, jurisdiction, strike out, summary judgment)
• applying relevant CPR pre-action protocols, service rules, Part 24/Part 3.4 applications, and settlement tools (e.g., Part 36)
• structuring reports and memoranda with clear headings, numbered points, and full citations; recording research trails and updating law
• integrating client objectives, costs information, and risk management into advice and action planning

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What is the first step you should take when reviewing a new client file to identify legal issues?
2. Which of the following statements is correct regarding defences in file review? a) Defences must be considered only when the client is a defendant. b) A file review should include assessment of both potential and actual defences. c) Procedural defences are not part of issue identification.
3. State two differences between a legal issue and a cause of action.
4. When reviewing a contract dispute file, what are the key issues you would aim to identify for your supervising solicitor?

Introduction

Effective file review and issue identification are central skills for any solicitor. For SQE2, you must be able to analyse documents, pick out relevant facts, and translate them into legal issues, causes of action, and potential defences. This process underpins both legal research and client advice.

Lawyers are often presented with large volumes of information—a mix of client files, correspondence, witness statements, contracts, and court documents. Your task is to sift through this material, paying attention to factual and legal details, to produce a clear analysis for further action. In practice, the most efficient approach treats file review as part of a broader problem-solving cycle: establish client objectives, gather facts, identify relevant law, apply law to the facts, generate and evaluate options, and present a solution in an appropriate form. Working iteratively between facts and law is normal: new legal questions often prompt further fact-gathering and vice versa.

The File Review Process

A systematic file review involves a series of steps:

1. Determining the client's objectives and situation.
2. Identifying all relevant facts from the file.
3. Picking out the legal issues arising on those facts.
4. Considering which causes of action may be brought or faced.
5. Assessing possible substantive and procedural defences.
6. Summarising your analysis concisely for another lawyer or client.

Frame each step with the client’s aims in mind and note time, cost, and evidential constraints. Record decisions and research trails; accuracy and timeliness matter.

Key Term: Legal Issue
A specific legal question or dispute which arises from and is defined by the material facts of a case.

Key Term: Cause of Action
The legal basis (set of facts and law) that justifies bringing a claim in court.

Key Term: Defence
A fact or legal argument which, if proven, defeats or reduces liability for a cause of action.

Reading and Extracting Relevant Facts

Establish the facts with reference to the evidence in the file—such as events, dates, actions, omissions, or failures of contractual or statutory duty. Build a chronology that captures key dates for limitation and procedural steps (e.g., contract formation and breach dates, accident date, date of knowledge for personal injury, service of documents). Facts become “material” when they bear on an element of a claim or defence, or on remedy and quantum.

Use a disciplined approach:

• separate known facts from allegations and assumptions
• identify evidential sources for each material fact (documents, witness testimony, expert reports)
• note gaps and inconsistencies, and plan how to fill them
• capture client constraints and objectives early (commercial pressures, reputational concerns, appetite for litigation vs settlement)

Avoid overlong notes too early. Focus first on listening/reading for the narrative and marking key points; later, fill in detail with targeted questions or document checks. Attendance notes should record facts, advice, client decisions, and action points.

Identifying Legal Issues

After extracting the facts, determine which questions of law are in dispute or are significant for the client's objectives. Legal issues may relate to:

• breach of contract (e.g., was there a valid contract? What term was breached? Is the breach repudiatory?)
• tortious liability (e.g., did X owe Y a duty of care? Was there a breach? Did the breach cause recoverable damage?)
• equitable or statutory issues (e.g., misrepresentation and rescission, consumer rights under Consumer Rights Act 2015)
• criminal liability (e.g., do the facts fulfil all elements of the alleged offence?)

Frame legal issues as direct questions. Clear issue statements help structure analysis and make reports actionable. Ensure you reference the correct statutory provisions. For example, delivery timing in sale of goods is generally governed by s.29 Sale of Goods Act 1979 for business contracts and s.28 Consumer Rights Act 2015 for consumer sales. Satisfactory quality and fitness for purpose fall under s.14 SOGA 1979 (business) and ss.9–10 CRA 2015 (consumer). Checking the correct regime early avoids misdirected analysis.

Determining Causes of Action

Having identified the issues, consider whether there is a legal right that allows your client (or the other party) to sue. Confirm each element of the cause and match it to the facts and evidence:

• contract: formation, term, breach, causation, loss, remoteness (Hadley v Baxendale), mitigation, any agreed limitations or exclusions
• misrepresentation: false statement of fact, inducement, materiality; remedies include rescission and/or damages (fraudulent, negligent, or innocent)
• negligence: duty, breach, causation (factual and legal), damage not too remote; consider special regimes (Occupiers’ Liability Acts 1957/1984; professional negligence)
• nuisance, trespass, defamation: check specific constituent elements and defences
• statutory claims: e.g., CRA 2015 (consumer goods/services), Equality Act 2010 (discrimination), Protection from Harassment Act 1997

Select remedies consistent with the cause and facts (damages, specific performance, injunctions, rescission, declaratory relief). Note that equitable remedies are discretionary and require clean hands and adequacy/inadequacy of damages.

Spotting Defences

Assess from the file whether any facts or law would enable a defendant to defeat, reduce, or delay liability. Defences may include:

• Factual denials (e.g., “Our client did not sign the document”; “No causative breach occurred”)
• Legal arguments (e.g., limitation under the Limitation Act 1980; accord and satisfaction; estoppel; frustration; illegality)
• Contractual limitations (e.g., exclusion or limitation clauses; for B2B, consider UCTA 1977 reasonableness; for consumer contracts, CRA 2015 fairness/blacklisted terms)
• Contributory negligence (Law Reform (Contributory Negligence) Act 1945) and failure to mitigate
• Procedural arguments (e.g., improper service under CPR Part 6; lack of jurisdiction/Part 11; strike out under CPR 3.4; summary judgment under CPR 24; abuse of process; res judicata)
• Criminal defences (e.g., self-defence under common law and s.76 Criminal Justice and Immigration Act 2008; duress; consent; lawful authority; mental state defences)

State clearly whether each defence is substantive (addresses the merits) or procedural (relates to how the matter is brought or conducted). Procedural points may not dispose of a claim permanently but can control its course, costs, and timing.

Worked Example 1.1

A client brings a file from a previous solicitor. The correspondence reveals goods were delivered two weeks late. The contract includes no time of the essence clause. The client now seeks damages for loss of profit.

Question: What are the key issues to identify?

Answer:
The main issue is whether late delivery, absent a time-of-the-essence clause, constitutes a breach amounting to repudiation or simply entitles the buyer to damages. Consider the applicable regime: business-to-business contracts engage SOGA 1979 (s.29 on delivery), while consumer sales engage CRA 2015 (s.28 on delivery). Determine whether time was made essential by express term, notice making time of essence after delay, or the nature of the goods. Identify the cause of action as breach of contract and assess loss, remoteness, and mitigation. Review any limitation or exclusion clause (UCTA/CRA scrutiny). Potential defences include waiver, agreement to vary delivery dates, and limitation if time is advanced.

Worked Example 1.2

The file for a personal injury case shows that the client was injured at work. The employer notes contributory negligence—failure to follow instructions.

Question: What should your file review highlight?

Answer:
The legal issue is whether the employer failed in its duty of care (including statutory duties under workplace safety regulations). The cause of action is likely negligence. Map duty, breach (systems of work, training, supervision), causation, and damage. Identify the possible defence of contributory negligence and its likely percentage apportionment, along with mitigation and limitation (three years from the date of injury or date of knowledge, s.11 Limitation Act 1980). Confirm evidence: accident reports, witness statements, medical records, training records.

Worked Example 1.3

A buyer alleges misrepresentation in a share purchase: the seller’s management accounts overstated recurring revenue. The SPA contains a non-reliance clause and a limitation of liability.

Question: How do you structure the issues?

Answer:
Identify whether the misstatement was a representation of fact that induced entry into the contract. Consider whether the non-reliance clause is effective: in B2B transactions, such clauses may be upheld if reasonable and clearly drafted, but they can be scrutinised under the Misrepresentation Act 1967 s.3 and UCTA 1977 for reasonableness. Check whether the representation is repeated in warranties—if so, warranty claims may be available with agreed limitations (caps, baskets, time limits). Causes include negligent misrepresentation (damages; rescission may be barred) and breach of warranty (contract damages). Defences include contractual limitation periods, entire agreement clauses, knowledge qualifiers, and the buyer’s own due diligence. Gather proof: accounts, correspondence, board minutes, diligence reports.

Worked Example 1.4

A criminal file shows an alleged theft under s.1 Theft Act 1968. The client says they believed the property belonged to them.

Question: What issues and defences arise?

Answer:
Check the elements: dishonesty, appropriation, property, belonging to another, intention permanently to deprive. Apply the current test of dishonesty (objective standards per Ivey v Genting Casinos; the defendant’s belief as to facts is relevant to dishonesty). A genuine, honestly held belief that the property was theirs may negate “belonging to another” or dishonesty. Consider available evidence: prior ownership documents, messages, witness accounts. Procedural issues include admissibility of interview evidence (PACE), identification, and disclosure. Potential defences include mistake of fact, lack of dishonesty, or absence of intention permanently to deprive.

Exam Warning

Candidates sometimes confuse a legal issue with a cause of action. A legal issue is a legal question arising from the facts; a cause of action is the legal right to bring a specific claim. Common pitfalls include:

• citing the wrong legal regime (e.g., consumer vs business sales)
• failing to match facts to each element of the cause of action
• overlooking limitation and procedural gateways (service, jurisdiction)
• listing defences without stating whether they are substantive or procedural and their effect on the claim
• omitting remedies and relief or failing to assess remoteness and mitigation

Revision Tip

When conducting file review under time pressure, list the relevant facts, issues, causes of action and defences in columns or bullet points for clarity. Use tabulation and numbering for series to avoid ambiguity. Build an action plan that sets out next steps, who is responsible, deadlines, and resources. Keep a research trail: dates, sources, keywords, citations, and steps taken to update the law. Phrase legal issues as short, answerable questions. When drafting reports or letters, use plain English, avoid legalese, and prefer clear definitions, correct punctuation, and coherent structure.

Key Point Checklist

This article has covered the following key knowledge points:

• A systematic sequence for file review: client objectives, facts, issues, causes of action, defences, and reporting.
• The distinction between facts, legal issues, causes of action, and defences, and how to frame issues as direct legal questions.
• Mapping law to facts and evidence: check each element of a cause against propositions of fact and supporting proof.
• Remedies must be aligned to the cause and facts; consider damages, injunctions, specific performance, rescission and their constraints.
• Defences may be factual, legal, or procedural, and must be considered for both claimants and defendants with their impact on liability and timetable.
• Limitation and procedural gateways (CPR service, jurisdiction, strike out/summary judgment) are central to issue identification.
• Contractual controls (exclusion/limitation, non-reliance, entire agreement) require scrutiny under UCTA 1977 and CRA 2015.
• For SQE2, clarity and structure in reporting analysis are essential—use headings, numbered points, and full citations; record and update research.

Key Terms and Concepts

• Legal Issue
• Cause of Action
• Defence