Legal Watch: Personal Injury 18th June 2014 Issue: 023
Civil Procedure/Expert Witness The commercial case of Rowley v Dunlop and others [Lawtel 17/06/2014] is of general interest when considering the independence of an expert witness. An additional claim was brought against the appellant/ defendant under CPR Part 20 for compensation for losses caused by his alleged breaches of director’s duties. The company’s claim against the defendant had been assigned to a claims management company (the CMC) which then assigned it to the respondent/claimants on terms that, were they to succeed, the claimants would pay the 30% of the recovery and a further 45% representing sums owed to the CMC. The company had sought to rely on a draft forensic accounting report prepared by an expert. The expert’s biography stated that he was a partner in a firm, which was operated by its owner. The owner was also the sole director of the CMC. The owner of the firm and the expert had considered whether there was a conflict of interest and had concluded that there was not. The owner stated that he was only involved in the CMC as a director who was paid on an hourly basis, was not a shareholder and had no financial interest in the outcome of the litigation. The defendant applied to strike out the claim on the basis that the expert’s report was fatally flawed because of his conflict of interest arising from his connection with the owner. He alleged that the expert had deliberately misstated in a declaration in his report that he knew of no conflict of interest. The judge at first instance held that there was no conflict of interest as, although the owner of the firm owed director’s duties to the CMC, the expert did not owe it any duty and there was no evidence that the expert, or the firm in which he was a partner, would benefit from the litigation. The question of whether the contents of the report showed that the expert could not be seen as independent was adjourned pending the instant appeal. The claimant appealed and submitted that (1) the failure to provide evidence as to the expert’s connections with the CMC
In This Issue:
• Civil Procedure/Expert Witness • Occupiers’ Liability • Jackson/Mitchell
meant that the court was entitled to infer that there might be
of the CMC was insufficient to show that the expert had a
a greater degree of involvement than that which had been
financial interest in the proceedings. It was clear that he was
disclosed, such as possible interests in the CMC’s shares
connected to the owner of his firm and therefore arguably to
or payments made out of sums recovered by the claimants;
the CMC, but the risk of any conscious or unconscious bias
(2) the expert was to be criticised for giving an unqualified
should be explored in cross-examination at trial. The issue
declaration when he knew of his connection with the owner
went to weight rather than admissibility. The report was not
of the firm and the firm itself.
inadmissible on the conflict ground.
‘The essential character of witness evidence was that it should be independent, objective and within the expert’s area of expertise’
The claimant’s criticisms had some force. It was clearly
Dismissing the appeal the High Court judge held that it was unusual on a strike out application to determine whether a witness who was to give expert evidence was lying, without having heard oral evidence. However, the case had been put on the basis that there was a conflict and that the expert had deliberately misstated that there was not. The existence of a conflict of interest might not justify rejecting an expert’s report, but a deliberately untruthful denial of that conflict might make it appropriate to reject the entire report. The judge had found that there was no conflict so the declaration was not untruthful. The essential character of witness evidence was that it should be independent, objective and within the expert’s area of expertise. An expert’s connections with parties could compromise that character. The court would rarely admit expert evidence where the expert had a financial interest in the litigation. The circumstances would dictate whether the court would admit evidence if there was a conflict of duty. A personal connection with a party might influence the expert’s evidence, but that would not normally of itself lead to its rejection but would go to the weight of the evidence. The court could not find a conflict of interest from inferences of the kind that the defendant had suggested. The fact that the owner of the firm in which he was a partner was a director
incumbent on an expert to disclose facts which could be taken into account on his ability to give independent evidence. The court agreed with the owner of the firm and the expert that there was no conflict but the fact that they had considered the matter suggested that there should have been disclosure of some facts.
Occupiers’ Liability Although no personal injury was involved, the case of
was revealed by an informal or preliminary inspection which
Stagecoach South Western Trains Ltd v Hind and another
gave rise to a cause for concern.
(2014) EWHC 1891 (TCC) is relevant to such claims.
The authorities indicated that an ordinary landowner,
The claimant train operator claimed the cost of repairing
required to act reasonably and prudently, was obliged to
damage to a train, and other consequential costs, against
carry out regular preliminary/informal inspections of the
the first defendant landowner and the second defendant
trees on his or her land, particularly where those trees
tree surgeon after a tree on the first defendant’s land fell
bordered a highway, a railway or the property of another.
onto a railway line.
The first defendant was capable of carrying out a meaningful
The tree was at the end of the first defendant’s garden in an area that was uncultivated and covered with ivy, brambles and nettles. The tree was an ash and about 150 years old. It was originally made up of three separate stems. The northern stem had fallen many years before the first defendant bought the property. The two remaining stems, the eastern and the western, grew vertically out of a common trunk. The second defendant had carried out some work on the western stem three years before the eastern stem fell onto the railway tracks. He climbed the western stem for the purpose of clearing dead wood. After the collapse an empty train collided with the trunk and was damaged. The tree was in apparently good condition at the time of the collapse. The eastern stem fell because the fork or union between the stems was an “included bark union”, in which the bark of the two stems pushed against one another and caused a crack to develop, and because of decay that had spread from the wound left by the fallen northern stem. The claimant alleged that the first defendant owed a duty to have the tree regularly inspected by an arboriculturalist; if that had happened, the arboriculturalist would have been obliged to carry out a detailed inspection of the base of the
preliminary/informal inspection of her trees. She was an educated woman and a regular and enthusiastic gardener who knew a reasonable amount about trees. She carried out regular informal inspections or observations of all the trees in her garden. She carried out those inspections properly. The tree was apparently healthy. The included bark union would not have alerted an ordinary landowner to any problem and was in any event covered in ivy. The wound too was covered by ivy. A reasonable and prudent landowner was not obliged to inspect the trunk of an apparently healthy tree which was difficult to access and covered in ivy.
‘A reasonable and prudent landowner was not obliged to inspect the trunk of an apparently healthy tree which was difficult to access..’
tree and would have discovered the crack and the decay.
There was nothing that should have alerted the first
Finding in favour of the defendants, the High Court judge
defendant, or put her on notice, that the tree was anything
held that a reasonable and prudent landowner was not obliged, as a matter of course and without any trigger or warning sign, to pay for an arboriculturalist to carry out periodic inspections of the trees on his land. A closer inspection by an expert was only required where something
other than healthy, or required a closer inspection by an arboriculturalist. The claim in tort against her therefore failed.
The second defendant was a tree surgeon not an arboriculturalist. The first defendant told him what work she wanted carried out. He might have expressed an opinion as to how that work might be carried out but his opinions or recommendations did not go beyond that. He had not been asked to inspect the tree and did not do so. His contractual obligations did not require him to inspect or advise generally about the tree. His duties were circumscribed by his contractual obligations. His work on the western stem did not create sufficient proximity between him and the claimant. There was no duty to warn and if there had been it would only have been triggered by the discovery of a clear defect or something that was obviously dangerous. The claim against the second defendant also failed.
Jackson/Mitchell There are five cases that broadly sit under this heading this
argument, the thrust of it was largely unchanged. However,
week.
their delay in bringing the claim had unreasonably increased
The thrust of Jackson/|Mitchell is compliance with rules, practice
directions
and
orders,
including
pre-action
protocols. Even if a party is successful it may still be penalised in costs if its pre-action ‘behaviour’ is open to criticism. That is what happened in Lovell Partnership and another v Merton Priory Homes (2014) EWHC 1800 (TCC).
the costs to both sides. The claimants had known their position at the end of 2010 but had not issued proceedings until March 2014. That had resulted in the respective solicitors having to review a large amount of correspondence when preparing for the instant hearing. Further, the claimants had refused to give an undertaking to meet any costs order made in favour of the defendant. That issue had been live
A declaration had been made in favour of the claimant
for only a month and had therefore not added greatly to the
on the interpretation of the clause in issue. In light of that
costs. The claimants’ costs were substantially less than
previous judgment, the defendant accepted that it should
those claimed by the defendant, even though they had the
pay the claimants’ reasonable costs of the proceedings.
carriage of the action. The costs incurred by both parties
The costs claimed were £55,000. The defendant submitted
should have been less than they were. The claimants were
that the costs claimed by the claimants and the costs it had
entitled to £45,000, which represented a proportionate
incurred had been increased by the claimants’ conduct,
amount after making a modest reduction to reflect those
particularly in failing to comply with the pre-action protocol.
costs that were unnecessarily incurred by the defendant.
It was the defendant’s case that the claimants should recover only two-thirds of their costs.
Comment
‘(The delay) had resulted in the respective solicitors having to review a large amount of correspondence when preparing for the instant hearing’
Those handling cases in the pre-litigation stage should be aware of the requirements of the relevant pre-action protocol. If there is no specific pre-action protocol the Practice Direction – Pre-action Conduct will apply. Steps should be taken to ensure that the protocol is complied with but in the light of cases like this, it is increasingly important to note and record non-compliance by another party. As can be seen this could lead to an adjustment in costs later, even if the other party is successful overall. As the case of Warners Retail Ltd v National Westminster Bank Plc and another [Lawtel 13/06/2014] shows, the courts continue to adopt a robust approach to compliance with CPR, even where an application is not one for relief from
The High Court judge held that was no real substance in the complaint that the claimants had not complied with the protocol. The letter from the claimants’ solicitors had set out their position sufficiently clearly. Although the claimants’ argument became more nuanced in the course of oral
sanctions. The claimant alleged that the defendants had missold to it interest rate swaps, and in particular that they had given negligent advice in breach of their duties of care. The trial was due to begin about three weeks after the hearing of this
application and it was common ground that, if the claimant
delay in bringing the application. Accordingly, applying the
was granted permission to adduce the expert evidence, the
overriding objective, the claimant was not permitted to
trial would have to be adjourned.
adduce the expert evidence.
The defendants contended that it would be contrary to principle to allow the claimants to adduce the expert
Comment
evidence because it had not pursued its case diligently. They
This is yet another decision which focuses on the wider
relied on the principles expounded in Mitchell to urge the
issue of court resources and the impact of orders in one
court to exercise its discretion against granting permission.
case on the parties in other, unrelated cases. This theme
The claimant argued that there would be an inequality of
has been carried through into the amended wording to CPR
arms if permission was not granted because it needed
3.8 which came into effect on 5 June 2014:
the expert evidence to establish the defendants’ alleged breaches of duty and the existence of a body of expertise on interest rate swaps. It further argued that its application was not covered by the Mitchell principles because it was not seeking relief from sanctions under CPR 3.9.
‘Adjourning the trial could have caused disruption to other court users’ Refusing the application, the High Court judge held that it was unnecessary to determine to what extent the Mitchell principles were applicable in the circumstances of the instant case because the overriding objective under CPR 1.1 pointed firmly towards dismissing the application. The claimant had made much of the need for it to be on an equal footing with the defendants. However, neither party would be able to rely on expert evidence at trial and the claimant could still instruct an expert to help it prepare for cross-examining the defendants’ witnesses. Accordingly, it could not be said that a refusal of permission would prevent the claimant from properly presenting its case. Further, there would have been considerable expense if the trial was adjourned at such a late stage and the defendants would have been prejudiced. Allowing a long-standing trial date to be adjourned in the circumstances would have been the antithesis of dealing with the case expeditiously and fairly. Adjourning the trial could have caused disruption to other court users and there was no good reason for the claimant’s
‘…the time for doing the act in question may be extended by prior written agreement of the parties for up to a maximum of 28 days, provided always that any such extension does not put at risk any hearing date’ (emphasis added).” The Mitchell approach was also applied rigorously in Cranford Community College v Cranford College Ltd [Lawtel 18/06/2014]. The claimant/respondent had issued proceedings against the
defendant/applicant
for
passing
off.
Directions
were given for the exchange of witness evidence and subsequently the parties agreed an extension of time for exchange. The claimant duly served its witness statements by the agreed deadline but the defendant failed to do so. It served statements from three of its key witnesses13 days later and then applied for the court’s retrospective permission to serve those statements. In explaining its non-compliance, in respect of one witness the defendant referred to the fact that his wife had been ill and hospitalised before the deadline for exchange, so that he had been spending much of his time at hospital or caring for his wife. A second witness had had to attend unexpected professional engagements in Cyprus before the deadline for exchange so that he was unable to finish his witness statements on time. The defendant provided no explanation for noncompliance with the deadline in respect of its third witness. It was common ground that, although the defendant had not formally applied under CPR 3.9, its application had to be considered under that rule, in light of Mitchell and the other relevant authorities since.
Applying those principles, the defendant argued that its
on time. In the circumstances, it was appropriate to refuse
non-compliance was only trivial because its 13-day delay in
to allow both him and the third witness, who had provided
serving the statements was unlikely to have prejudiced the
no explanation whatsoever for his non-compliance, to serve
claimant. It also argued that it had provided a good reason
their witness statements late. Such a sanction was not
for its failures to comply with the deadline for exchange.
disproportionate. It was important to remember that, since
‘...since Mitchell, courts were more particularly required to take into account not only the effect a grant of relief from sanctions would have on the parties, but also the culture of litigants in meeting deadlines...’
Mitchell, courts were more particularly required to take into account not only the effect a grant of relief from sanctions would have on the parties, but also the culture of litigants in meeting deadlines, which was to be maintained as much as possible. The last two decisions can be contrasted with Warner v Merrett [Lawtel 16/06/2014]. The applicant/claimant had failed to serve documents relating to additional costs liabilities for solicitor and counsel success fees and an after-the-event insurance premium which CPR PD 43-48 required should be served with the bill of costs. The respondent/defendant served points of dispute contending that as a result of that omission CPR 44.3B(1) required that the success fees and insurance premium had to be disallowed unless the court ordered otherwise. The claimant immediately supplied the documents and applied
Allowing the application only in part, the judge held that as
for relief from sanctions.
to triviality it was clear that since Mitchell the question of
He argued that (1) the automatic sanctions under CPR
whether the opposing party was prejudiced by the failure to
44.3B did not apply where the documents were served late
comply was less significant. A delay of 13 days, especially
rather than not at all; (2) alternatively, relief from sanctions
when the trial date was not far away, was not trivial. As
under CPR 3.9 should be granted because the sanction of
to the alleged good reasons for non-compliance, in the
automatic disallowance of additional costs was created
case of the first witness it was very possible that his wife’s
before CPR 3.9 had been amended, at a time when relief
condition had become the priority in his life to the extent
would usually be granted absent prejudice; there was no
that the demands of the litigation had seemed to him less
disruption to the court; he had attempted to comply with the
important. On the assumption that that was the case, the
practice direction and the defendant could have requested
first witness had had an exceptional reason for why his
the missing documents.
statements had not been served on time, and accordingly the court was prepared to grant retrospective permission for him to serve his witness statements late. As to the second witness, his reason for non-compliance was unsatisfactory. His explanation was extremely brief and the court was left with no way of knowing how important the Cypriot engagements were or to what extent the second witness had done anything significant to complete his statements
Allowing the application, the deputy High Court judge held that CPR 44.3B(1) was of general application and applied to all stages of proceedings. The claimant’s omissions were subject to the automatic sanctions.
‘The decision in Mitchell provided guidance…but should not be applied like a rule or statute’
in breach of CPR3.13 because the costs draftsman was
The decision in Mitchell provided guidance on how to apply
‘...even if the costs draftsman was a legal representative, he could not be considered a “senior legal representative” within the meaning of PD 3E’
CPR 3.9, but that judgment should not be applied like a rule or statute. It was not appropriate to focus intensely and narrowly on the word “trivial” in the Mitchell guidance. It was necessary to look at the context and the effect of the breach. The question of triviality had to be seen in the context of the duty to co-operate imposed on lawyers involved in Mercantile Court cases. Little weight was placed on the claimant’s argument that the rule had been devised before CPR 3.9; to do so would erode the force of the new rule. The breach was of a general kind and not a total failure. The consequences of the breach caused inconvenience
not a senior legal representative of the defendant and that therefore the effect of the budget being signed by him was that it was a nullity. It argued that the consequence of that was that CPR 3.14 was applicable and the defendant was to be treated as having filed a budget comprising only the applicable court fees.
to the defendant, not the court. There was no duty on the defendant’s solicitors to contact the claimant’s solicitors for
Dismissing the application, the High Court judge held that
the missing information, and they could not be criticised
there was no definition of “senior legal representative” in PD
for not doing so, but the prejudice claimed to have been
3E or in the CPR. However, CPR 2.3(1) provided a definition
caused to the defendant could have been avoided by
of “legal representative” which was at least persuasive in
sending an email or making a telephone call. Further, there
considering the meaning of “senior legal representative”
had been no breach of a court order, no history of default
in PD 3E. Viewed overall, CPR 2.3(1) seemed to connote
and the claimant’s solicitors had acted immediately when
someone who was representing in a legal capacity, which
they became aware of the omission. In the context, the
was not what was being done by a costs draftsman whose
breach was trivial or insignificant. Even if that were wrong, it
only involvement was the preparation of a costs budget,
was just to grant relief in all the circumstances.
and who did not give any form of legal advice or legally
A pragmatic approach to a technical breach of the rules was also adopted in Americhem Europe Ltd v Rakem Ltd and others (2014) EWHC 1881 (TCC).
based representation. Even if the costs draftsman was a legal representative, he could not be considered a “senior legal representative” within the meaning of PD 3E. Of the three fee earners listed in the budget he appeared to be the
The defendant filed a costs budget in the form of Precedent
least senior, at least by reference to his charging rate, and
H annexed to CPR PD 3E. While compliant in every other
moreover as a costs draftsman he was not independently
respect, it was signed by a costs draftsman. He was included
able to verify that the provision of resources that appeared
in the budget as a fee earner, but he had no involvement in
in the costs budget was reasonable, particularly as he had
the case other than the preparation of the costs budget.
no other involvement in the litigation at all. However, that
The third party applied for an order that the defendant was
did not render the costs budget a nullity. The fact that it was signed by the costs draftsman was an irregularity.
The document was in a form which stated that it was the defendant’s costs budget and was immediately recognised as such. To hold that it was not would lack any form of reality or justification. In the circumstances, there was no need for relief from sanctions. The proportionate and just response,
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given that no-one had been significantly disadvantaged
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by the irregularity, was to require it to be remedied at the
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