Legal Watch: Personal Injury 16th October 2014 Issue: 036
Jurisdiction/Rome II In Winrow v Hemphill and another (2014) EWHC 3164 (QB)
the claimant tried to argue that although her accident had
In This Issue:
habitually resident in that country, she should nevertheless
• Jurisdiction/Rome II
substantive and not merely procedural law.
• Costs
happened in Germany and involved another party then be able to bring her claim in England and under English
The claimant was an English national. She had moved to Germany with her husband after he was posted there by the
• Civil procedure/pre-action disclosure • QOCS overturned
British army. They had lived in Germany with their children for over eight years but intended to return to the UK at the end of his
posting. The claimant had been a rear-seat passenger in a car driven by the first defendant, an English national, when it was
involved in a collision with a car driven by a German national. The first defendant was also living in Germany because of her
husband’s army posting. The claimant suffered a prolapsed disc. She suffered depression and continuing pain in her right leg. She and her family returned to the UK 18 months after the
accident and she issued the instant proceedings. The second defendant, the first defendant’s insurer, conceded liability. It was a company incorporated in England and Wales.
Events
The claimant submitted that German law, applicable under
Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next few months:
Rome II, was displaced by Articles 4(2) and 4(3). She asserted
that all the parties were habitually resident in the UK on the date of the accident, and the tort was more closely connected to the UK because the majority of her consequential loss had been incurred in the UK.
Refusing the application the High Court judge held that Article
4(2) was an exception to the general rule that the law of the place of the tort was to be applied. To bring herself within 4(2),
the claimant had to establish that she was habitually resident
in England at the time of the accident. In addition, the person claimed to be liable had to be habitually resident in England at the time; that was the driver and not the insurer. The habitual
residence of the second defendant was therefore immaterial.
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The claimant had been living and working in Germany for
• The claimant had remained in Germany for a further 18
was a considerable length of time. She lived there with
• She received a significant amount of treatment for her
eight-and-a-half years by the time of the accident. That her husband and three of their children were at school in
Germany. The family remained living in Germany for a further 18 months after the accident. There was no evidence that
during that time they had a house in England. Her family’s
intention to return to the UK at the end of her husband’s posting did not affect her status at the time of the accident. The claimant’s habitual residence at the time of the accident
was Germany. The law of tort indicated by Article 4(1) had not been displaced by Article 4(2).
To bring herself within Article 4(3) the claimant had to show
that the tort was “manifestly” more closely connected with a country other than that indicated by Articles 4(1)
and 4(2). The circumstances to be taken into account
under Article 4(3) did not vary depending upon the issues to be determined or the stage reached in proceedings.
One system of law governed the entire tortious claim. The “centre of gravity” was the centre of gravity of the tort, not
of the damage caused by the tort. However, there was no temporal limitation on the factors taken into account and
a court would assess the factors as they stood at the date of the decision. If a claimant and a defendant were habitually resident in country A at the time of the accident but in country B at the time Article 4(3) was applied, both
circumstances could be taken into account. There was a difference of opinion as to whether the factors to be
taken into account under Article 4(3) were limited to those connected with the tort and excluded those connected with
the consequences of the tort. While the answer was by no means clear, the court proceeded on the basis that the link
of the consequences of the tort to a particular country was a relevant factor for the purposes of Article 4(3). The factors connecting the tort with German law included: • The accident took place in Germany • The claimant sustained injury in Germany • The claimant and first defendant were habitually resident in Germany at the time of the accident
02
months after the accident injuries in Germany
The following factors indicated a connection of the tort with English law: the claimant and first defendant were both resident in England at the date of the instant hearing; the
claimant attended a pain clinic and received treatment for depression in the UK; she was allegedly suffering loss of
earnings in England; she had pursued proceedings in the UK, although that was not a strong connecting factor. Those
factors did not indicate a manifestly closer connection of the tort with England than with Germany. The law indicated
by Article 4(1) had not been displaced by Article 4(3). The applicable law was therefore German law.
Civil procedure/pre-action disclosure In the predecessor to this periodical, Greenwoods’ Alert
as a result of the fire that was potentially compensatable
(India) Ltd and another v Barloworld Handling Ltd. The case
forklift truck, and could properly bring proceedings in
(2014) EWCA Civ 1311.
not all, routine maintenance of the vehicle, it was likely that
370, we reported the first instance decision in Jet Airways
by those who designed, manufactured or maintained the
has now been before the Court of Appeal and is reported at
respect of it. Since the defendant had undertaken some, if
A cargo handling depot had been destroyed by fire. The
claimants were the owners of, or otherwise interested in,
the building and its contents. Investigations into the cause of the fire concluded that it had started in a forklift truck.
The trucks were supplied by an associated company of the defendant and it had entered into an agreement to maintain them. The claimants applied for pre-action disclosure from the defendant under CPR 31.16 of various documents
if the claimants started proceedings the defendant would
be a party to them, even if only on an alternative basis. In that case the documents which the claimants were seeking
would fall within the scope of standard disclosure. Preaction disclosure might assist in identifying with greater
certainty the true cause of the fire and thus help to resolve the dispute without the need for proceedings or save costs. The judge therefore had jurisdiction to make an order.
relating to the maintenance of the trucks for the two years
Although the evidence pointing to failures in maintenance
as speculative. The judge considered that in order for the
sufficient evidence before the judge to justify his conclusion
applicant had to show a prima facie case that was more
had not identified any factors which the judge had failed
judge exercised his discretion in favour of making an order.
There were no grounds for saying that he erred in the
31.16(3) did not impose an arguability threshold.
in the scope of the order made.
before the fire. The defendant opposed the application
of one kind or another was far from conclusive, there was
court to have jurisdiction to order pre-action disclosure an
that the case was not merely speculative. The defendant
than speculative. The claimants satisfied that test and the
properly to take into account when making his decision.
A subsequent Court of Appeal case confirmed that CPR
exercise of his discretion to make an order for disclosure or
The defendant appealed and submitted that the claimants’ case against it was highly speculative, and that it was unlikely
that after an interval of over three years disclosure would shed any real light on the cause of the fire. Accordingly,
the judge should not have imposed on the defendant the burden of giving disclosure.
Dismissing the appeal, the Court of Appeal held that as far as the existence of jurisdiction was concerned, the critical words in CPR 31.16(3) (a) and (b) were “likely to be a party”
to subsequent proceedings. The rule required no more than
that the parties to the application would be likely to be involved in proceedings if any were started, and in context
“likely” meant something less than “probable”. It was clear
from the previous authority that CPR 31.16(3) imposed no arguability threshold. The claimants had suffered loss
03
Costs There are two cases under this heading. The case of PGF II SA v OMFS Co 1 Ltd (2013) served
as a warning to parties not to refuse alternative dispute resolution (ADR) without good reason. This issue arose
in the commercial case of Northrop Grumman Mission
case might well be sufficient justification for a refusal to mediate. That said, mediation could have a positive effect, even if the claim had no merit. A mediator could bring a new
independent perspective and not every mediation ended in a payment to the claimant.
Systems Europe Ltd v BAE Systems (Al Diriyah C4)1 (2014)
On balance, the defendant’s reasonably held view that it
the court.
its refusal to mediate. Moreover, it had made a “without
EWHC 3148 (TCC) and received detailed consideration by In its substantive judgment the court had found for the
defendant. The claimant accepted that the defendant was entitled to its costs to be assessed on a standard basis, but
asserted that those costs should be halved to reflect the defendant’s unreasonable refusal to mediate.
Refusing the application, the High Court judge held that when the court exercised its discretion under CPR 44.2,
it had to have regard to all the circumstances, including the conduct of the parties both before and during the
proceedings. “Conduct” included a refusal to agree to ADR.
Factors to be taken into account included the nature of the dispute; the merits of the case; the extent to which other
settlement methods had been attempted; whether the costs of ADR were disproportionately high; whether any delay in
setting up or attending the ADR would have been prejudicial; and whether ADR had a reasonable prospect of success.
The instant case centred on an issue of contractual interpretation, and a total of £3m was at stake. It was not a
point of construction which would have affected the parties’ continuing relationship, but was a major issue at the centre
of a financial claim. In such claims, a skilled mediator could assist by finding a solution to a dispute which the parties would otherwise have been unable to settle. Nevertheless,
the defendant had reasonably considered that it had a strong case and where a party faced an unfounded claim and
wished to contest it rather than buy it off, the court was to be slow to characterise that as unreasonable conduct. The
fact that a party reasonably believed that it had a watertight 04
had a strong case provided some limited justification for prejudice save as to costs” offer which the claimant had
rejected. Had the claimant accepted that offer it would
have been in a better position than it was as a result of
the hearing. That was a factor that was marginally in the defendant’s favour when it came to assessing its refusal
to mediate. On the other hand, the claimant had proposed mediation but, each time, the defendant had requested
further costs information which was never going to be
produced. A mediator could have cut through the positions taken by the parties. Mediation could have taken place without affecting the litigation and would have cost around
£40,000. That cost was not disproportionately high given
that the claim involved some £3m and the costs actually incurred totalled some £500,000. Moreover, it was likely that
there would have been a mediated settlement. Mediation was, in general, successful.
The court had to look beyond the polarised positions of
the parties. A skilled mediator could find middle ground by analysing the parties’ positions and making each reflect
on its own and the other’s position. By bringing other commercial arrangements or disputes into the discussion, or
by finding future opportunities for the software or licences, the mediator could have found solutions that the parties had not considered.
In summary, mediation would have had a reasonable
prospect of success and in such a case a party would be
acting unreasonably if it rejected it on insufficient grounds.
Thus, even though the defendant reasonably considered that it had a strong case, it had acted unreasonably in rejecting
the claimant’s offer to mediate. The claimant’s conduct in
of a situation in which a Part 36 offer had been accepted
taken into account. The defendant’s refusal to mediate had
was therefore not practically in a position to seek an interim
rejecting the settlement offer was, similarly, conduct to be deprived the parties of the opportunity of resolving the case
without a hearing, but so had the claimant’s failure to accept the defendant’s offer. The fair and just outcome was that
neither party’s conduct should modify the general rule on
costs. The claimant was therefore to pay the whole of the defendant’s costs, to be assessed on the standard basis.
and a party was in the position of seeking a costs order and costs certificate. The application had no real prospect of success. It was clear from CPR 44.2(8) that where there
was an order to pay costs subject to a detailed assessment, the court would order a reasonable sum unless there was a good reason not to do so. Therefore the assumption was that there would be an order for payment on account.
The second case under this heading is Astonleigh Residential Care Home v Goldfarb [Lawtel 10/10/2014].
In the substantive proceedings, the respondent had accepted the applicant’s Part 36 offer. The respondent, which had instructed its solicitors under a conditional fee arrangement, estimated that its costs were £59,000, though
it was also owed a further £16,000 by the applicant under
a previous costs order. The respondent did not provide a written statement of costs at the hearing. The judge
ordered that it was entitled to its costs, subject to a detailed assessment. He ordered that the applicant make a £20,000 payment on account of those costs.
The applicant applied for permission to appeal and
submitted that the power to order a payment on account depended on the availability of a written statement of costs, otherwise it would not be possible to test whether the judge
had properly exercised his discretion. It further submitted that Cook on Costs suggested that where a Part 36 offer had been accepted and there had been a conditional fee
agreement, there was no jurisdiction to grant an interim payment until there had been a detailed assessment, so
that there was a powerful incentive to prepare a written
statement of costs. The respondent submitted that the applicant’s proposition was not contained within CPR 44.2(8): the requirement for a costs statement only applied
in respect of summary assessments; and that there were opportunities to correct any overestimates in a payment on account at the eventual detailed assessment.
Refusing the application, the High Court judge held that
Cook on Costs did not state that there was no power to
make an interim order. It was discussing the practicalities 05
QOCS overturned From within Plexus Law As more cases come through that are subject to qualified
one way costs shifting (QOCS), defendants must take every available opportunity to overturn the principle that if
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the claimant is unsuccessful he has no costs liability to the
Monthly:
was heard by the District Judge in Manchester County Court
Quarterly:
defendant. We were able to achieve this in AA v AEL which on 8 October. The claim involved a rear-end shunt, as a
result of which the claimant claimed for both personal injury
• Legal Watch: Property Risks & Coverage • Legal Watch: Counter Fraud
and vehicle-related losses. It was our client’s insured’s case
• Legal Watch: Health & Safety
braking. At the hearing the claimant failed to produce two
• Legal Watch: Professional Indemnity
that the collision was caused by the claimant’s deliberate
allegedly independent witnesses and his own evidence was full of contradictions and conflicted with documentary
• Legal Watch: Marine • Legal Watch: Disease
evidence. As a result the judge dismissed the claim and found in favour of our client’s insured on his counterclaim.
Although the District Judge stopped short of finding the
claim to be fraudulent, she nevertheless indicated that she
had not believed a single word of the claimant’s evidence. Accordingly, she was prepared to accept that the claim
was fundamentally dishonest providing grounds for the QOCS principle to be overturned and an order made for the
claimant to pay both the costs of the counterclaim and our
client’s costs of defending the claim. The costs orders are
Contact Us
For more information please contact: Geoff Owen, Learning & Development Consultant T: 01908 298216 E: gro@greenwoods-solicitors.com
against the claimant personally and he has only 21 days in which to pay.
For further details please contact: Steve Tann E: steve.tann@plexuslaw.co.uk
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The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.