Legal Watch: Personal Injury 1st April 2015 Issue: 058
Limitation Insurers who may be faced with claims for historical sex abuse
will gain some comfort from the decision in RE v GE (2015) EWCA Civ 287.
The appellant/claimant alleged that the respondent/defendant,
her father, had abused her between the ages of 6 and 14. She turned 18 in 1986. Stubbings (1993) decided that claims for
injury caused by deliberate assault were subject to a six-year,
In this issue: • Limitation • Fraud/settlement of suspicious claim • Jackson/Mitchell/Denton • Watch this space
non-extendable limitation period, meaning that this claimant’s
claim would be irretrievably statute-barred, limitation having run from her attaining her majority. She claimed that she had
not realised until aged 25, around 1993, that she could bring proceedings. She had not done so after realising it would
affect the welfare of family members and because she wished to concentrate on her relationship with her boyfriend. She contacted solicitors in 2001 and 2006 but did not proceed with a claim.
In 2008, in A v Hoare the House of Lords declined to follow Stubbings and held that the Ss 11 and 30 Limitation Act 1980,
permitting extension of the limitation period, applied to claims in respect of intentional injury. The claimant’s solicitors wrote to her advising her of that change. She instructed them to pursue
a claim. A letter of claim was sent to the defendant in 2009.
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In 2010 the solicitors approached a consultant psychiatrist
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2011. His report was produced in January 2012 but it was
London
to assess the claimant. She did not see the psychiatrist until
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never disclosed. The claimant saw a second psychiatrist and
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issued the claim in September 2012. The judge declined to extend the limitation period under S33.
The claimant appealed and argued that the judge had (1) applied the wrong test under S33 in asking whether it was fair for the defendant to face a trial; (2) erred in saying that
the S33 discretion was only to be exercised in exceptional
cases; (3) not considered the balance of prejudice; (4) erred in
finding that the reasons for the delay had not been adequately explained.
Dismissing the appeal, the Court of Appeal held that the
The judge had been entitled to find that the reasons for
to allow the action to proceed” notwithstanding the
have been possible to explain away some of the early period
question under S33 was whether it “would be equitable expiry of the primary limitation period. That was to be answered having regard to all the circumstances of the
case, including in particular the factors identified in S33(3).
Asking whether it was “equitable” to allow an action to proceed was no different from asking whether it was fair in all the circumstances for the trial to take place, as the
judge had. No factor could be given a priori importance;
all were potentially important. However, the importance of each factor would vary in intensity from case to case. One
relevant factor was the very existence of the limitation which Parliament had decided was usually appropriate. The judge had not misdirected himself.
The judge had not misdirected himself in referring to “exceptional cases”. He had not said any more than that the claimant was asking for the “exceptional indulgence” of proceeding outside the limitation period.
The judge had identified the competing arguments as to whether a fair trial was possible in his consideration of S33(3) (b). He had recognised that the memories of the parties
could not be supposed to have dimmed, but also correctly weighed in the balance the loss of some evidence and the
less clear position as to the circumstances and memories of subsidiary witnesses. He clearly had considered the balance of prejudice.
‘…the factors in S33(3) (a), S33(3)(e) and S33(3) (f) weighed heavily against the exercise of any discretion in the claimant’s favour’ 02
the delay were not adequately explained. Although it might after attainment of the claimant’s majority, it was impossible
to do so regarding the period after 2008. Over four years passed after the claimant was informed of Hoare. That was
itself significantly in excess of the primary limitation period. A very large part of that delay was accounted for by the
time taken to obtain the first psychiatrist’s report. Although the claimant’s solicitors might have pressed harder for an
outcome, there was no evidence of any anxiety expressed by the claimant herself as to the progress of her claim. It had plainly been incumbent on both the claimant and her
advisers, after 2008, to proceed with despatch when the primary period had expired so long before. By the time the matter was before the judge, the factors in S33(3)(a), S33(3)
(e) and S33(3)(f) weighed heavily against the exercise of any discretion in the claimant’s favour. A claimant who had failed
to meet a limitation period or failed to proceed diligently after expiry of a period could in some cases shelter behind error on the part of advisers, but not always. The delay after
2008 had been egregious and the explanations proffered did not begin to exonerate the claimant from it.
Fraud/settlement of suspicious claim The case of Hayward v Zurich Insurance Co Plc (2015) EWCA Civ 327 demonstrates the care defendants must take
when deciding to settle claims where there is a suspicion of fraud.
The appellant/claimant had injured his back during an accident at work. He claimed that his injury continued
was based on the very averments of fact which the claimant
made in advancing that claim. In such a case, a defendant would not be entitled to seek to have the agreement set aside at some later date only on the basis that he could
now show that the claimant’s factual statements of the case being advanced were wrong.
settlement of his claim.
‘By entering into the settlement, the defendant implicitly agreed not thereafter to seek to have it set aside…’
About two years later, the claimant’s neighbours approached
In deciding to settle, the defendant took the risk that those
to cause him serious lumbar pain which restricted his mobility and that his ability to work was seriously impaired. The insurers conducted the defence on behalf of the
employer. They relied on video evidence which showed him undertaking heavy work at home, to argue that he had
exaggerated the consequences of his injury. The parties
reached an agreement, embodied in a Tomlin order, under
which the insurers agreed to pay £134,973 in full and final
the employers to say that from their observation of his conduct and activities, they believed that the claimant had
entirely recovered from his injury at least a year before the settlement was reached. The insurers claimed damages for deceit, asserting that the statements which the claimant had made about the extent of his injury in his particulars
of claim and witness statements constituted fraudulent
misrepresentation. The settlement agreement was set aside.
The claimant was awarded damages of £14,720 and he was ordered to repay the settlement sum, less that amount.
statements would not be proved at trial and paid a sum
commensurate with his assessment of that risk. It could have taken the case to trial in order to disprove the statements in
question, but by settling it agreed to forego that opportunity and could not reserve the right to come back for another
attempt. If it were otherwise, no settlement would be final. By entering into the settlement, the defendant implicitly
agreed not thereafter to seek to have it set aside on the basis that the statements made in support of the claim were false. However, the position would be different where the
The claimant appealed and submitted that belief was a
claimant’s case was not only ill-founded but dishonest.
whereas the insurers’ decision to enter into the settlement
taken the risk of the claimant’s statements in support of his
his misrepresentations rather than by their own belief in
contrary, be fair to treat him as having taken the risk of them
necessary component of a claim based on misrepresentation,
Thus, whilst it might be fair to treat the defendant as having
had been influenced by the fear that the court might believe
claim being wrong, it would not, absent any indication to the
them.
being dishonest.
Allowing the appeal, the Court of Appeal held that the judge
What risk the defendant was to be treated as having
contract which the insurers sought to rescind was a contract
particular case. If it was in any case sufficiently apparent
had been wrong to set aside the settlement agreement. The
accepted had to depend on the circumstances of the
to compromise a disputed claim. The claim for rescission
that the defendant intended to settle notwithstanding the
03
possibility that the claim was fraudulently advanced, there was no reason why it should not be held to its agreement even if the fraud subsequently became demonstrable.
Applying those principles to the instant case, it was clear that the insurers ought not to be entitled to rely on alleged
fraudulent misrepresentations because the statements
had been made by the claimant in his statements of case and witness statements and the employers had positively asserted that they were dishonestly advanced before the settlement was reached.
Alternatively, it was possible to adopt an analysis based on reliance. The insurers had not been concerned with the
truth or otherwise of the claimant’s statements as the factor motivating their action. Rather, they were treating them simply as part of his case. It was inherent in the antagonistic
relationship of claimant and defendant that a defendant had to form an independent judgment about whether the disputed statements made as part of the claim were likely to be accepted by the court. A relationship of reliance did not arise in that context.
The authorities on rescission for misrepresentation were
clear that for a misstatement to be the basis of a claim to rescind a contract, the claimant had to have given some credit to its truth and been induced into making the contract
by a perception that it was true rather than false. The settlement remained binding.
04
Jackson/Mitchell/Denton As the case of Singh v Thoree [Lawtel 30/03/2015] illustrates,
advisers had genuinely taken a different view that he had to
more relaxed approach to non-compliance in the post-
again. They had been mistaken.
there can be no doubt that the courts are adopting a much Denton era.
address the amended claim and that time had begun to run In the application to set aside, the deputy Master had not
The respondent/claimant had been employed by the
mentioned the merits of the defendant’s defence in his
2008 and issued a claim form in 2013 which alleged that
reached a view on that matter. The claimant accepted that
appellant/defendant at a solicitors’ firm from 2002 until
judgment and it was therefore impossible to find that he had
the defendant owed him money. A deputy Master extended
the instant court therefore had to make such an assessment.
time to serve a defence to 28 January 2014. Meanwhile, the
claimant was granted permission to add a third party as a defendant, namely the solicitors’ firm which had employed
him prior to 2008. The defendant received the amended
claim form on 28 January, hours before his defence was to
be served and his advisors took the view that that service
reset the clock so that he had a further 28 days to serve his defence. The claimant applied for judgment in default
of defence on 30 January and it was entered against the defendant on 24 February. Meanwhile, the defendant had served his defence and counterclaim on 14 February. He received notification on 26 February that judgment had been entered and, on the following day, applied for it to be
set aside. That application was refused by another deputy Master.
The defendant appealed, submitting that (1) the service of
the amended particulars of claim had overridden the order extending time to serve a defence; (2) in considering the application to set aside, the deputy Master had not dealt
‘Applications to set aside had to be made promptly and the defendant had...’ There had been an extraordinary delay in bringing the
claim and its value had not been specified. The defendant accepted that money was potentially owed to the claimant, but the amount could not be calculated without a proper
account. It was possible that the claim and counterclaim could cancel each other out. The court was satisfied that, on
the face of the statements of case, the defendant had a real prospect of successfully defending the claim. Applications to set aside had to be made promptly and the defendant
had made his application the day after being notified that judgment in default had been entered. The judgment was therefore set aside.
with the merits of his defence under CPR 13.3.
Allowing the appeal, the High Court judge held that the
service of the amended particulars of claim had not
overridden the first deputy Master’s order. Normally where amended particulars were served, provisions were made to
amend the timetable either by agreement or by court order. In the instant case the amendment had simply added a
party. On the facts, there was no need for the defendant to plead to the amended claim. He had been required to comply with the deputy Master’s order, even though his
05
Watch this space Changes to Part 36 effective from 6 April 2015 Although CPR Part 36 has been completely rewritten (rather than amended), in reality there is little by way of fundamental change to the previous version.
It remains the case that to be valid a Part 36 offer must: • Be in writing • Make it clear that it is made pursuant to Part 36. (The
old rule required that the offer should state on the face of it that it was intended to have the consequences of
the full amount claimed (or 99%) and then succeeds in full.
The new Part 36 seeks to address the perceived difficulty
of parties being able to obtain the costs benefits of Part
36 where they have made very high offers. It does this by adding a new factor for the court to take into account in deciding whether it would be unjust to order the Part 36
costs consequences, at 36.17(5): “(e) whether the offer was
a genuine attempt to settle the proceedings”. This would appear also to rule out defendant offers for 5-10% on liability.
Section I of Part 36). Under both versions the effect is
4. The new Part 36 states expressly (at CPR 36.2(3)) that
costs if the offer is accepted within the “relevant period”
or other additional claim. It cross-refers to CPR 20.2 and
the same: that the defendant will pay the claimant’s • Specify a “relevant period” of not less than 21 days • Indicate if it is to settle all or part of the claim
• State whether it takes into account any counterclaim A summary of the more significant changes is: 1. Offers can be time limited i.e. the offer may indicate that
if not accepted it is withdrawn on a certain date or on the
happening of a certain event. However, the costs protection of the offer is then lost.
2. Where there is a split trial, the new CPR 36.16 allows the
judge to be told of the existence, but not the terms, of a Part 36 offer after judgment has been given on the preliminary
issues (unless the Part 36 offer relates only to the issues that have been decided, in which case the terms of the offer can also be disclosed).
3. The current rules have given rise to difficulties where a party makes a Part 36 offer for nearly all the relief it is
seeking in the action. On the face of the rules, the costs consequences apply where a claimant obtains a judgment that is “at least as advantageous” as its offer, i.e. it does not
need to better its offer. So in theory the costs consequences 06
could apply where a claimant makes an offer to settle for
a Part 36 offer may be made in respect of a counterclaim
20.3 which provide that counterclaims and other additional
claims are treated as claims and that references to a
claimant or defendant include a party bringing or defending an additional claim.
5. There is a new provision (at CPR 36.9(5)) that where an offeror changes the terms of an offer to make it more advantageous to the offeree, it is treated as a new offer rather than a withdrawal of the original offer.
6. The new 36.14(5) makes clear that where a Part 36 offer is accepted late, the court must make the usual order (i.e. that
the accepting party pays the costs for the period of delay) unless it would be unjust to do so. This brings into play a similar test to the court considering whether to depart from
the usual costs consequences where a party fails to beat a Part 36 offer at trial.
The current wording of Part 36 states that on late acceptance
the usual order will apply unless the court orders otherwise, which might be thought to suggest a broader discretion.
7. If a party has failed to file a costs budget in time, under
CPR 3.14 it is treated as having filed a budget limited to court fees, so that in effect (and subject to obtaining relief
from sanction) its recoverable costs are limited to court fees. Where that is the case, there may be little incentive for the
opponent to settle in the face of a Part 36 offer from the party in default, as the costs risk if it fails to beat the offer may be minimal.
The new CPR 36.23 addresses this difficulty by providing that,
in
such
circumstances,
the
defaulting
party’s
recoverable costs for the purposes of Part 36 will be 50%
of the costs that would otherwise be recoverable, but will
not be limited to court fees. Note however that this provision only applies to the costs from expiry of the relevant period
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onward. Where it is the claimant that is in default, and the
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does not allow the claimant to avoid the limitation to court
• Legal Watch: Professional Indemnity
offer is accepted within the relevant period, this new rule fees.
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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: 12 Dingwall Road, Croydon, CR0 2NA. Parabis Law LLP is authorised and regulated by the SRA.