Legal Watch: Personal Injury Year Book 2014

Legal Watch: Personal Injury Year Book 2014 A compilation of the cases reported during 2014

Contents 1.

Civil procedure 9 2.

Costs 50 3.

Liability 65 4.

Limitation 87 5.

Fraud 92 6.

Credit hire 98 7.

Periodical payments 101 8.

Part 36 102 9.

Damages 108 10.

Miscellaneous 121

Case index 1.

Civil procedure

Karbhari and another v Ahmed (2013) EWHC 4042 (QB) 9 Maclennan v Sindall (Infrastructure) Ltd (2013) EWHC 4044 (QB) 10 London & Henley (Middle Brook Street) Ltd and others v Secretary of State for Communities & Local Government and others (2013) EWHC 4207 (Admin) 11 Thevarajah v Riordan and others (2014) EWCA Civ 15 11 M A Lloyd & Sons Ltd v PPC International Ltd (2014) EWHC 41 (QB) 12 M (A child) v London Borough of Lambeth and others (2014) EWHC 57 (QB) 13 Murrills v Berlanda and another (2014) EWCA Civ 6 14 Mitsui Sumitomo Underwriting at Lords v Khan and others [Lawtel 5/02/2014] 15 Her Majesty’s Solicitor General v Dodd and another [Lawtel 4/02/2014] 15 Porbanderwalla v Daybridge Ltd [Lawtel 11/02/2014] 16 Neile v University Hospitals NHS Trust [Lawtel 11/02/2014] 17 NHS England v Jowhari [Lawtel 24/11/2014] 18 Rich (Protected Party) v Hull and East Yorkshire Hospital Trust [Lawtel 8/04/2014) 19 Newland Shipping & Forwarding v Toba Trading FZC and others (2014) EWHC 210 19 Wahid and another v Skanska UK Plc and another (2014) EWHC 251 (QB) 20 Bank of Ireland v Philip Pak Partnership (2014) EWHC 284 (TCC) 21 Chartwell Estate Agents Ltd v Fergies Properties SA and another [Lawtel 21/02/2014] 21 Samara v MBI Partners UK Ltd and another (2014) EWHC 563 (QB) 23 Hoyle v Rogers and others (2014) EWCA Civ 257 23 Mitchell v New Group Newspapers Ltd (2014) EWHC 1885 (QB) 24 National Crime Agency v Azam and others [Lawtel 9/05/2014]

25

Stoute v LTA Operations Ltd (2014) EWCA Civ 657 26 Norcross and another v Constantine and another [Lawtel 22/05/2014] 27 Kaki v National Private Air Transport Co and another (2014) [Lawtel 30/05/2014] 28 Power v Meloy Whittle Robinson Solicitors (2014) EWCA Civ 989 29 Norcross v Georgallides [Lawtel 7/07/2014]

31

American Leisure Group Ltd v Garrard and others (2014) EWHC 2101 (Ch) 31 Beacons Business Interiors Ltd and another v Carey and another [22/05/2014] 32 Scarlett v Grace [Lawtel 6/06/2014] 33 Rowley v Dunlop and others [Lawtel 17/06/2014] 34 Nwoko v Oyo State of Nigeria and another [Lawtel 2/07/2014] 35 Akhtar v Boland (2014) EWCA Civ 872 35 Symes v St George’s Healthcare NHS Trust (2014) EWHC 2505 (QB) 36 McLennan Architects Ltd v Jones and another (2014) EWHC 2604 (TCC) 37

Carlton Advisory Services v Dorchester Holdings Ltd and others [Lawtel 2/09/2014] 38 Ensign Highways Ltd v Portsmouth City Council [Lawtel 10/09/2014] 39 Jet Airways (India) Ltd and another v Barloworld Handling Ltd (2014) EWCA Civ 1311 40 Doctors Associates Inc v Hussain [Lawtel 16/09/2014] 40 Thwaytes v Sothebys [Lawtel 18/09/2014] 41 Thomas v Baker and another [Lawtel 29/09/2015] 42 Decura IM Investments LLP v UBS G London Branch [Lawtel 8/10/2014] 43 Tchenguiz and others v Director of the Serious Fraud Office (2014) EWHC 1102 (Comm) 43 Shepherd v Fox Williams LLP and others (2014) EWHC 1224 (QB) 44 Avonwick Holdings Ltd v Webinvest Ltd and another [Lawtel 21/10/2014] 45 Hornsby-Clifton v Ministry of Defence [Lawtel 18/11/2014] 46 Dunhill (Protected Party) v Burgin (2014) UKSC 18 48 Fujitsu Services Ltd v Department for Transport and another [Lawtel 1/04/2014] 49

2. Costs Harrison and another v Black Horse Ltd [Lawtel 07/01/2014] 50 Knowles v Goldborn [Lawtel 30/01/2014] 51 Blankley (Protected Party) v Central Manchester & Manchester Children’s University Hospital NHS Trust (2014) EWHC 168 (QB) 51 Haynes (deceased) v Department for Business Innovation & Skills (2014) EWHC 643 (QB) 52 Xhosa Office Rentals Ltd v Multi High Tech PCB Ltd and others [Lawtel 25/03/2014] 53 Jones and others v Secretary of State for Energy and Climate Change (2013) EWHC 1023 (QB) 54 Franklin v Maddison and another [Lawtel 17/04/2014] 55 R (on the application of Paul Crawford) v Newcastle Upon Tyne University (2014) EWHC 1197 (Admin) 55 Finglands Coachways Ltd v O’Hare (Protected Party) (2014) EWHC 1513 (QB) 56 Bright v MIB (2014) EWHC 1557(QB) 57 Dunfermline Building Society v Ghana Commercial Finance Ltd and others [Lawtel 17/07/2014] 58 Wagenaar v Weekend Travel Ltd and another (2014) EWCA Civ 1105 59 Ultimate Products Ltd and another v Woolley and another (2014) EWHC 2706 (Ch) 60 Kellie and another v Wheatley & Lloyd Architects Ltd (2014) EWHC 2886 (TCC) 60 Long v Value Properties Ltd and another (2014) EWHC 2981 (Ch) 61 Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4)1 (2014) EWHC 3148 (TCC) 62 Astonleigh Residential Care Home v Goldfarb [Lawtel 10/10/2014] 63

3. Liability Ramirez v Maheshwari [Lawtel 2/05/2014] 65 Wheeler v Chief Constable of Gloucestershire Constabulary [Lawtel 19/12/2013] 65 Cridland (Protected Party) v Stagecoach (South) Ltd [Lawtel 23/01/2014]

66

Train v Secretary of State for Defence [Lawtel 23/01/2014]

66

Gray v Gibson [Lawtel 06/03/2014] 68 Gupta v Armstrong and another [Lawtel 27/05/2014] 69 Beaumont and another v Ferrer (2014) EWHC 2398 (QB) 69 Landau v Big Bus Co Ltd and another (2014) EWCA Civ 1102 70 Gray v Bothwright [Lawtel 10/07/2014] 71 Christian v South East London & Kent Bus Co (2014) EWCA Civ 944 72 Mohamud v Wm Morrison Supermarkets Plc (2014) EWCA Civ 116 73 Cox v Ministry of Justice (2014) EWCA Civ 132 74 Biddick (deceased) v Morcom (2014) EWCA Civ 182 75 Stagecoach South Western Trains Ltd v Hind and another (2014) EWHC 1891 (TCC) 76 Butcher v Southend-on-Sea Borough Council [Lawtel 3/11/2014] 76 Sloan v Rastrick High School Governors (2014) EWCA Civ 1063 77 Humphrey v Aegis Defence Services Ltd [Lawtel 05/03/2014] 78 McCade v Critchlow and others [Lawtel 04/03/2014] 79 Johnson v Warburtons Ltd (2014) EWCA Civ 258 80 McGregor v Genco (FC) Ltd (2014) EWHC 1376 (QB) 81 Thompson v Renwick Group Plc (2014) EWCA Civ 635 82 Abbott v Cannock Chase District Council [Lawtel 16/05/2014] 83 Olulana v London Borough of Southwark [Lawtel 23/06/2014] 83 Love v Halfords Ltd (2014) EWHC 1057 QB) 84 McCabe v Cheshire West and Chester Council and another [Lawtel 24/07/2014] 84 Curtis v Hertfordshire Council [Lawtel 21/03/2014] 85 Eze and another v Health & Safety Executive (2014) EWHC 3474 (Admin) 86

4. Limitation Hall v Ministry of Defence (2013) EWHC 4092 (QB) 87 Francisquini v London Borough of Southwark and another [Lawtel 31/03/2014] 88 Collins v Secretary of State for Business Innovation & Skills (2014) EWCA Civ 717 89 Unwalla v Spire Healthcare Ltd [Lawtel 22/10/2014] 90 Platt v BRB (Residuary) Ltd (2014) EWCA Civ 1401 90

5. Fraud AXA Insurance Plc v Rossiter (2013) EWHC 3805 (QB) 92 Tinkler and another v Elliott (2014) EWCA Civ 564 92 Aziz v Ali and related claims (2014) EWHC 1846 (QB) 93 Liverpool Victoria v Thumber [Lawtel 16/07/2014] 94 Royal & Sun Alliance Plc v Fahad [Lawtel 21/10/2014] 95 Bate v Aviva Insurance UK Ltd 95 Gosling v Screwfix and Anor, (Cambridge County Court) 97

6.

Credit hire

Zurich Insurance Plc v Umerji (2014) EWCA Civ 357 98 Stevens v Equity Syndicate Management Ltd (2014) EWHC 689 (QB) 99

7.

Periodical payments

AA (Protected Party) v BB and another (2013) EWHC 3679 (QB) 101

8.

Part 36

Rehill v Rider Holdings Ltd [Lawtel 16/01/2014] 102 Newland Shipping & Forwarding Ltd v Toba Trading FZC (2014) EWHC 864 (Comm)

103

Saigol v Thorney Ltd (2014) EWCA Civ 556 104 Supergroup Plc v Justenough Software Corp Inc [Lawtel 30/06/2014]

104

Elsevier Ltd v Munro (2014) EWHC 2728 (QB) 105 Burrett v Mencap Ltd [Lawtel 08/09/2014] 106 Coward v Phaestos and others (2014) EWCA Civ 1256 106

9. Damages Coles and others v Hetherton and others (2013) EWCA Civ 1704 108 Brown (deceased) v Hamid (2013) EWHC 4067 (QB) Humphrey v Aegis Defence Services Ltd [Lawtel 15/01/2014]

109

Haxton v Philips Electronics Plc (2014) EWCA Civ 4 110 Kadir v Mistry and others [Lawtel 27/03/2014] 111 Cox v Ergo Verisherung AG (2014) UKSC 22 112 Knauer v Ministry of Justice (2014) EWHC 2553 (QB) 113 Smith v Bailey (2014) EWHC 2569 (QB) 114 Barrett v East Herfordshire NHS Trust [Lawtel 13/11/2014] 116 Billett v Ministry of Defence [Lawtel 11/09/2014] 116 Leigh v London Ambulance Service 2014) EWHC 286 (QB) 118 Reaney v University Hospital of North Staffordshire NHS Trust and another (2014) EWHC 3016 (QB) 118 Yapp v Foreign & Commonwealth Office (2014) EWCA Civ 1512 119

10. Miscellaneous Jurisdiction/Rome II 121 Winrow v Hemphill and another (2014) EWHC 3164 (QB) 121 Brownlie v Four Seasons Holdings Inc (2014) EWHC 273 (QB) 123 Allen and others v Depuy International Ltd (2014) EWHC 753 (QB) 124

Donkers and another v Storm Aviation Ltd and others (2014) EWHC 241 (QB) 125 Medical panels for whiplash claims 126 Draft Insurance Contracts Bill 126 The Discount Rate 126 Pinn and others v Guo and others – Swansea County Court 126 Taylor Review of Costs in Scotland – The Scottish Government Responds 127 Proposals to reform fatal accident inquiries in Scotland 128 Major reforms of the courts’ system in Scotland 129 RTA/MIB Uninsured Drivers’ Agreement 129 Delaney v Secretary of State for Transport (2014) EWHC 1785 (QB) 129 The outcome of the long awaited review of the guideline hourly rates (GHRs) for solicitors’ costs 130 ASHE update 130 Guidance for the instruction of experts in civil claims 131 Jackson/Mitchell/Denton 131 Hockley v North Lincolnshire & Goole NHS Trust [Lawtel 6/10/2014] 131 Jackson/Mitchell 132 Associated Electrical Industries Limited v Alstom (UK) (2014) EWHC 430 (Comm) 132 Clarke v Barclays Bank Plc (2014) EWHC 505 (Ch) 133 Post Jackson/Mitchell Cases Disclosure 134 Sainsbury’s Supermarkets Ltd v Mastercard Inc and others [Lawtel 18 March 2014] 134 Rattan v UBS AG London Branch (2014) EWHC 665 (Comm) 135 McTear and another v Englehard and others (2014) EWHC 722 (Ch) 136 Chartwell Estate Agents Ltd v Fergies Properties SA 137 Canning v Network Rail Infrastructure Ltd [Lawtel 14/04/2014] 137 Kershaw V Roberts and others (2014) EWHC 1037 (Ch) 137 The Matter of Guidezone Ltd v Prakash and others (2014) EWHC 1165 (Ch)) 138 Chartwell Estate Agents Ltd v Fergies Properties SA and another (2014) EWCA Civ 506 139 Hallam Estates Ltd and another v Baker (2014) EWCA Civ 661 140 Monde Petroleum SA v Westernzagros Ltd [Lawtel 22/05/2014] 142 Holloway and others v Transform Medical Group (CS) Ltd and others (2014) EWHC 1641 (QB) 143 Decadent Vapours Ltd v Bevan and another [Lawtel 10/06/2014) 144 Lovell Partnership and another v Merton Priory Homes (2014) EWHC 1800 (TCC) 145 Warners Retail Ltd v National Westminster Bank Plc and another [Lawtel 13/06/2014] 145 Cranford Community College v Cranford College Ltd [Lawtel 18/06/2014]

146

Americhem Europe Ltd v Rakem Ltd and others (2014) EWHC 1881 (TCC) 147 Swinden and another v Grima and another [Lawtel 20/06/2014] 148 Gordon v Fraser [Lawtel 23/06/2014] 149 Davies v Liberty Place (Sheepcote Street) Management Co (2014) EWHC 2034 (Admin) 149 Denton and others v TH White Ltd and another (and related appeals) (2014) EWCA Civ 906 150

Abdulle and others v Commissioner of Police for the Metropolis [Lawtel 3/11/2014] 153 Robinson v Kensington and Chelsea Royal Borough Council and another 154 Frontier Estates v Berwin Leighton Paisner LLP [Lawtel 4/11/2014] 155 Bankside Hotels Ltd v Gourgey [Lawtel 18/11/2014] 155 Mirza v Norbert Dentressangle Logistics Limited 156

1. Civil procedure

the court’s permission under the CPR.32.10, the party in

Karbhari and another v Ahmed (2013) EWHC 4042 (QB)

Applying the approach in Mitchell it would not be appropriate

From Issue 001 In Karbhari and another v Ahmed (2013) EWHC 4042 (QB) the defendant applied for permission to serve a supplementary witness statement out of time.

default had to persuade the court to grant relief under CPR 3.9(1). to grant the defendant the permission sought. His breach was far from trivial. The delay of over seven months and the timing of the application on the second day of the trial amounted to a serious departure from the terms of the court order relating to the service of witness statements. The supplementary witness

The claimants’ case was that, in the context of more than 20

statement was no mere formality but sought to introduce wholly

transactions, they had handed over to the defendant millions

new (and inconsistent) material to the case as originally presented.

of pounds in cash and cheques pursuant to an agreement that

Further, there was no “good reason” for the defendant’s default.

he would repay the monies after a fixed period together with a

Money laundering was a serious criminal offence. Omitting until

guaranteed return. Some of those transactions involved monies

the very last moment large volumes of evidence to protect those

allegedly provided directly by the claimants; others involved

guilty of the offence on the unwarranted assumption that the

third parties who, it was said, provided the first claimant with

case might not come to trial was a thoroughly bad reason. In the

monies upon the promise of a return lower than that which had

particular circumstances of the case, the proportionate response

been offered by the defendant to the first claimant, thus leading

to the breaches was to strike out the defence and give judgment

him to expect to earn a substantial commission. The investors,

for the claimants.

it was said, understood that the returns were being generated by profits in the Dubai property market through a company.

In the vast majority of, if not all, cases neither the original investments nor any return was recovered. In his defence, the defendant denied receiving any of the sums in question. On the morning of the second day of the period over which the matter had been listed for trial, he produced an amended defence. It purported to strike out the original defence almost in its entirety, and it was admitted that he had received four cheques from four different investors which he passed on to a representative of the company. He also filed a supplementary witness statement.

In it he admitted receiving cheques for onward transmission and investment. He explained that the reason his earlier statement, which had been filed over seven months previously, was so short of facts and detail was that he was concerned that if he told the full story he could get a number of other people into trouble in

Where there was a realistic possibility of evidential developments between the date on which witness statements were to be served and the trial date, the wisest course would be to seek to persuade the court to make two orders relating to the service of witness statements. The first would provide for a date which would give a realistic opportunity for all sides to prepare statements covering existing events. A later backstop date could be ordered for the service of supplementary statements limited in content to matters which occurred, or were reasonably discoverable, only after the first date. That would have the advantage of obviating the need for further applications to the court and of giving the court the opportunity to exercise proportionate case-management discipline in advance. In that way, the unanticipated last- minute service of witness statements should become a thing of the past.

The same would be expected to apply to expert reports.

connection with money laundering.

Comment

Refusing the application and striking out the defence, the High

The outcome of this application was unsurprising, even without

Court judge held that the defendant’s supplementary witness

the impact of the tougher approach to compliance with CPR.

statement had been proffered over seven months late and,

However, the judge’s more general comments illustrate just how

even more importantly, on the second day of the trial. Where the

far parties must now plan well ahead when suggesting directions

court had ordered witness statements to be served by a certain

and setting their costs’ budgets.

date and they had not been served by that date, then, to obtain 09

Maclennan v Sindall (Infrastructure) Ltd (2013) EWHC 4044

the calling of witnesses after less intrusive measures had been

(QB)

considered and rejected; (b) a court seeking to regulate the

From Issue 002 Under the revised CPR 32.2(3) the court has the power to restrict factual witness evidence. The case of Maclennan v Sindall (Infrastructure) Ltd (2013) EWHC 4044 (QB) is an early example of the court exercising this power.

The claimant, who had been employed by the defendant, had suffered a severe brain injury in an accident at work. Liability was admitted subject to 25% contributory negligence. Quantum remained to be determined; the trial was estimated to last five days, and the trial window started at the end of March 2014.

In respect of loss of earnings, the claimant proposed to tender the evidence of 43 witnesses. Their statements concerned four broad issues: whether, but for the accident, the claimant could have worked abroad and earned more than he would have in

nature and extent of witness evidence would generally wish to do so at an early stage, before the preparation of witness statements. At that stage it might also be possible for the parties to identify matters which might be admitted; (c) while the power to exclude or control witness evidence was best exercised before the preparation of witness statements, the court was not precluded from exercising it after statements had been drafted; (d) before exercising its power to prohibit the adducing of witness statement evidence, the court had to have the fullest possible information, adequate preparation time, and guidance from the parties as to which parts of which statements were said to be otiose, prolix, or otherwise inadmissible; (e) where the court did exercise its power, it might be necessary to give the parties liberty to vary the order by consent or to apply to the court for a variation.

In that regard, the court would be entitled to expect a considerable

the United Kingdom; whether he would have retired at 65 or 70;

degree of co-operation and good sense.

what his promotion prospects might have been; and what earnings

A lack of co-operation could not be justified by an assertion that

he could reasonably have expected. The defendant argued that those issues were common in personal injury cases, and it sought an order limiting the claimant to calling no more than eight witnesses as earnings comparators.

The High Court judge held that overall the statements were extremely brief; they did not attach corroborative or supporting documentation; and they included assertions about the availability of work in the UK and abroad, rates of pay, typical retirement ages, and the claimant’s qualities and employment prospects generally. There was material duplication, though the

the relationship between the parties’ legal advisers was not good.

In the instant case, some form of case management was required.

One possibility would be to impose a process which required the claimant to identify the specific facts and propositions relied upon from the witness statements; the defendant to identify which were agreed and disagreed; and the claimant to indicate which witnesses he intended to call. However, that was not appropriate in the instant case: time was short, the parties had not exhibited any great ability to cooperate, and there was a real risk that a process involving multiple stages could delay the preparation for

repetition of a proposition by a variety of witnesses could be

trial.

said to add to its weight, and it was possible that the sum of the

The preferable course was as follows. The claimant would be

evidence might exceed the probative weight of its parts.

Under CPR 32.2(3), which came into effect as a result of the Jackson reforms, the court had the power to deploy a range of possible solutions in order to reduce costs and ensure that the trial was conducted effectively.

The following considerations were relevant to the exercise of that power: (a) Rule 32 had to be read as a whole. The court had to use all the powers at its disposal to ensure the efficient and fair conduct of the trial, and it would only consider prohibiting

permitted to call 14 witnesses to address the issue of comparative earnings. That was the minimum number he considered necessary, and the defendant did not demur. He was to write to each forthwith requesting certain specified details of their earnings, with supporting documentation. If a witness declined to co-operate, the claimant was to write to the defendant’s solicitor, setting out the steps he had taken and the response he received.

The claimant could call 14 additional witnesses to cover matters other than comparative earnings. That was the critical mass 10

he considered necessary, and it was likely that their evidence

proceedings having access to the court, and on the effective use

could be heard swiftly. Any fewer risked causing injustice. The

of the court’s resources. Second, the court had to regard the case

evidence of the claimant and his wife could also be tendered. The

as effectively settled: that was the only proper basis on which the

claimant was to identify the witnesses and serve any documents

adjournment could be granted. The case would have no priority

as directed; he could not rely on statements from witnesses

over any others: it would be dealt with as if proceedings had been

who had not been identified, though there was nothing to stop

freshly issued. That would mean that if there was any difficulty in

him from seeking to rely upon evidence following service of a

effecting the settlement, it would be several months before the

valid hearsay notice if it was proper to do so. Where any expert

case could come back into the list. Parties had to understand

evidence relied on the statements of individuals who were not on

that there were consequences if the court was given no sensible

the list of identified witnesses, there was no need for the experts

choice but to adjourn at the last minute.

to exclude reliance on those witnesses. Finally, both parties had liberty to vary the scheme by agreement or to apply to the court for a variation.

Thevarajah v Riordan and others (2014) EWCA Civ 15 From issue 003

London & Henley (Middle Brook Street) Ltd and others v Secretary of State for Communities & Local Government and

If anyone had any lingering doubts about how the courts will be enforcing compliance with CPR, the case of Thevarajah v Riordan

others (2013) EWHC 4207 (Admin)

and others (2014) EWCA Civ 15 will surely remove them.

From issue 002

The appellant/claimant appealed against a decision relieving the

Two of the considerations that the recent reforms in CPR have brought into focus are court resources and the impact of case management decisions in one case on the parties in other disputes. The significance of these is illustrated in the planning case of London & Henley (Middle Brook Street) Ltd and others v

respondent/defendants from sanction where they had breached an unless order by failing to provide adequate disclosure.

The claimant commenced substantive proceedings in relation to the purchase of a public house, and following several applications for injunctive relief, the grant of a worldwide freezing order

Secretary of State for Communities & Local Government and others

against the defendants and their failure to comply with

(2013) EWHC 4207 (Admin).

disclosure obligations, a further disclosure order was obtained

The parties to the dispute applied for an adjournment of the hearing of the matter to allow time to reach a settlement. They submitted that negotiation of the settlement had been unusually complicated and time-consuming but was close to completion, and if the court allowed the matter to reach finality its time would not be used needlessly and subsequent proceedings could be avoided.

The High Court judge allowed the application finding that it was realistic and just to adjourn the hearing in the exceptional circumstances of the case. However, two points had to be made.

First, the effect of the adjournment would be that the court’s time could not be used to enable any other planning case to be heard, at what would be extremely short notice. Thus it would be damaging to some degree to the interests of parties in other 11

in the form of an unless order. The defendants failed to comply and were debarred from defending the claim and their defence and counterclaim was struck out. They applied for relief from sanction which was initially refused but the deputy judge below had allowed a second application for relief from sanction.

Allowing the claimant’s appeal, the Court of Appeal held that the district judge had been wrong to rely on the decision in Woodhouse v Consignia (2002) as clear authority that a second application for relief was permissible. Woodhouse was not to be read as displacing the normal operation of CPR 3.1(7) in a case involving CPR 3.1(9). The defendants’ “second bite” application was in substance an application under CPR 3.1(7) for the setting aside of the provisions of the earlier order refusing relief under CPR 3.9, and had first to satisfy the criteria in Tibbles v SIG (2012) which it manifestly did not.

The deputy judge had been wrong to hold that the defendants’

M A Lloyd & Sons Ltd v PPC International Ltd (2014) EWHC 41

subsequent compliance with the unless order amounted to “a

(QB)

material change of circumstances” since the date of the order and there was no other basis for an application under CPR3.1(7) to vary or revoke the order.

(Obiter) even if the deputy judge had been entitled to give fresh consideration to the question of relief from sanction, his general approach to the application of CPR 3.9 in its current form was wrong in principle. It lacked the robustness called for by the guidance subsequently given in Mitchell v News Group (2013), and gave insufficient consideration to the need (a) for litigation to be conducted efficiently and at proportionate cost, and (b) to enforce compliance with rules, practice directions and orders, considerations which “should now be regarded as of paramount importance and be given great weight” Further, the deputy judge had paid insufficient attention to the defendants’ lack of promptness in bringing the second application, which had come almost two months after relief had been refused and just two days before the trial date followed. In addition, by allocating more than four of the five days allotted to the trial to be spent on the relief application, the deputy judge had allowed the application for relief from sanction hearing to take up a disproportionate amount of court time. The deputy judge had also questionably observed that even if the defendants remained debarred from defending the claim, they would be entitled at trial to require the claimant “to prove his claim, to cross-examine and make submissions” but the authorities to which he had referred did not support so sweeping a proposition.

Comment This judgment reveals all of the elements of the post Jackson approach, including a concern for the knock-on effect of delay in one case on the availability of court time for others.

From issue 004 In the post Mitchell era it seems inevitable that there will be a flurry of cases confirming how in the future the courts will approach various forms of application. In the commercial case of M A Lloyd & Sons Ltd v PPC International Ltd (2014) EWHC 41 (QB) it was witness statements that were under consideration. This case also illustrates that an agreement between the parties may not be sufficient for the court.

The claimant had brought a claim for breach of a confidentiality agreement and passing off. The defendant was a company incorporated under the laws of Brunei. The claimant argued that the defendant was “legally extinct” and had no entitlement to litigate in the United Kingdom. The claimant was ordered to file and serve a witness statement by 25 October 2013 dealing with matters of fact, and a skeleton argument on matters of law, in connection with the defendant’s existence and entitlement to litigate. The defendant was ordered to file and serve a statement in response. By the date of the defendant’s application in December 2013, the claimant had failed to file a statement or skeleton.

The claimant thereafter proposed a revised timetable which the defendant agreed. The claimant therefore did not attend the hearing of the defendant’s application but produced a draft statement which asserted that it had been unable to comply with the order because the registry for companies in Brunei would not release the requisite information without first receiving a number of documents from the defendant. The statement went on to list those documents which the claimant believed it was necessary for the defendant to disclose. The claimant’s counsel attended court the morning before judgment was to be handed down and made fresh submissions.

The High Court judge held that the following matters were abundantly clear: (a) the claimant should have informed the court of its alleged inability to provide the evidence before the order was made; (b) if the fact that the claimant would be unable to comply with the order only came to light after it had been made then the claimant should have made an application to extend time for compliance as soon as practicable and before the deadline for compliance had passed; (c) the claimant should have made 12

a prompt application for specific disclosure of the categories of

party could not simply assume that it could absent itself confident

document sought and not simply incorporated a wish list of such

in the assumption that CPR 23.11 afforded a comfortable fallback

documents in the body of a witness statement in the forlorn hope

position if the court’s order was not to its liking.

that the court would make an order of its own motion (emphasis added).

We also mention briefly the case of Webb Resolutions Ltd v E-Surv Ltd (2014) EWHC 49 (QB) which shows that the Mitchell approach

As the matter currently stood, the claimant was precluded by the

applies equally to an application seeking permission to appeal

operation of CPR 32.10 from calling at trial any intended witness

out of time. A party in default seeking an extension of time for a

in respect of the issues identified in the order. The burden of proof

renewed application for permission to appeal had to satisfy the

in respect of the issues raised about the defendant’s standing fell

same tests as were applied to the default in Mitchell. In the instant

upon the claimant. In the absence of evidence, the claimant’s

case the default was not trivial; the delay had been for a period of

contentions in respect of those issues would fail unless the court

about three times that permitted by the rules and there was no

was persuaded to grant relief from sanctions under CPR 3.9. The

good reason for the delay. Accordingly, the earlier order extending

court was entirely satisfied that there was no realistic prospect

time was set aside and permission to appeal was refused.

that relief from sanctions would ever be granted. In light of the decision in Mitchell, the courts had taken a consistently robust approach to the late service of witness statements. The claimant’s

Litigation Friend

delay of nearly three months was serious and the resultant breach

M (A child) v London Borough of Lambeth and others (2014)

could not be categorised as trivial. Further, there was no evidence of any good reason for the delay. It was not open to the claimant to allow weeks to pass without taking positive steps to comply

EWHC 57 (QB) From issue 004

with the order on the basis that further disclosure, for which no

From time-to-time it becomes necessary for one party to litigation

formal application had been made, was awaited. The fact that the

to suggest that a claimant’s litigation friend may no longer be the

claimant had proposed a consent order extending time fell far

most suitable person to fulfill the role. The most common situation

short of salvaging its position. It was clear from CPR 3.8(3) that the

that we have experienced is where a mother finds it impossible to

time for doing acts ordered by the court could not be extended

detach herself for her role as mother to make objective decisions

by agreement between the parties. It followed that even if the

as litigation friend.

parties had reached a concluded agreement on an extension of time it would not have been effective unless the court formally endorsed it. The court declined to take the course advocated by the defendant’s application. Its response to the claimant’s default

In M (A child) v London Borough of Lambeth and others (2014) EWHC 57 (QB) it was the suitability of the claimant’s father that was under scrutiny.

was unduly timid. In the circumstances, the proper approach was

The claimant had falled from the window of a blac of flats

to make an order debarring the claimant from raising any issue

and suffered serious injuries. He was aged four at the date

at trial relating either to the existence of the defendant or its

of the accident. By the date of the instant hearing he was

entitlement to litigate in the UK.

aged approximately 14. His medical expert stated that he had

The court had power under CPR 23.11 to re-list an application where it had proceeded in the absence of one of the parties, but it was a power that was to be exercised sparingly. As a result of the claimant’s decision not to attend, the judgment which was to be handed down the following day had to be re-drafted to take into account the fresh submissions raised by its counsel. A disproportionate amount of the court’s time had been taken up. A 13

proably suffered a brain injury and there was “significant brain impairment” caused by the accident. However, the defendant’s experts stated that the claimant’s impairments “were consistent with his pre-injury functioning” and on balance were probably “secondary to his inherent pattern of development and may have been contributed to by social and cultural factors”. The claimant’s father and litigation friend was no longer prepared

to co-operate with medical experts and was not amenable to

insurers and offered to see the claimant at a different clinic (Re-

putting recommended support in place for the claimant. He had

Shape) in the United Kingdom. Shortly before the expiry of the

instructed the claimant’s solicitor to settle the claim as soon as

limitation period, the claimant served the claim form on the

possible. The solicitor sought the court’s guidance upon whether

first defendant at Re-Shape. The claim form was returned by Re-

the father’s appointment as litigation friend should be terminated,

Shape with a note stating that the first defendant did not work

and whether the case should be settled even though it remained

there and they had no forwarding address for him. The claimant

unclear whether the claimant had suffered a brain injury, and

subsequently served the first defendant by email several months

what his disabilities might be in the future.

later. The claim against the first defendant was struck out on the

The High Court judge dealing with the application held that any settlement would require the approval of the court, but it would not be appropriate for a claimant’s legal advisers to pursue a

basis that it had not been validly served, as Re-Shape had never been his residential address and the claimant should have used CPR 6.41 to serve him in Italy.

negotiated settlement unless there was a reasonable prospect

Dismissing the claimant’s appeal, the Court of Appeal held that

of the court approving it. It was probable that if a new litigation

if her claim form was to be served in the jurisdiction, CPR 6.9

friend were to be appointed the claimant’s parents would remain

applied since the first defendant had not given an address for

as unco-operative as they currently were, and that would not assist

service. (CPR 6.9 provides a schedule of how various types of

in advancing the claimant’s best interests. Having considered the

defendant may effectively be served with a claim form). The first

evidence, and the claimant’s counsel’s thoughtful submissions,

question under that rule was whether he was an individual to

the best course in the circumstances was for the claimant’s legal

be served at his usual or last known residence, or “an individual

representatives to seek to negotiate settlement on the basis of

being sued in the name of a business”, in which case he could be

the existing medical and other evidence, as instructed by the

served at his usual or last known residence or his last known place

claimant’s father.

of business. A person practising medicine could be carrying on a business within the meaning of CPR 6.9, but not if he was

Service Murrills v Berlanda and another (2014) EWCA Civ 6 From issue 005 Claimants’ solicitors must always take care to ensure that an effective method is used for serving proceedings, particularly where the defendant may be outside the jurisdiction. This is illustrated in Murrills v Berlanda and another (2014) EWCA Civ 6.

an employee working in someone else’s business. An individual was sued in the name of a business when he was sued in the name of a business which was not his personal name. The first defendant was not sued in the name of a business; he was sued as an individual.

The claimant had no residential address for the first defendant in the jurisdiction. It was obvious that his residential address was in Italy, he had responded from Italy, he had a place of business in Italy and he had Italian insurers. It would not have been difficult

The first respondent/defendant was a cosmetic surgeon who

to ascertain his residential address from his professional Italian

worked a few days per month at the clinic of the second respondent/

address, but no attempt was made to discover it. The claimant

defendant company in London. He was an Italian national and

knew that he was no longer carrying on business at Re-Shape.

lived in Italy. The claimant claimed that her treatment by the

Accordingly, her solicitors should have proceeded under CPR 6.41

first defendant was negligent, and that the second defendant

(CPR 6.41 relates to proceedings to be served outside of the

was vicariously liable for his actions. By the time the claim was

jurisdiction using the Service Regulations). It followed that the

brought, the first defendant was no longer working for the second

judge was correct to find that there had been no valid service

defendant but had his own clinic in Italy, which was listed on a

of the claim form. The claimant’s solicitors had delayed in

website. The claimant’s solicitors wrote to him at the second

commencing proceedings and in pursuing them. They failed to

defendant’s address, and he responded with details of his Italian

take the steps obviously required to serve the first defendant 14

in Italy within the period for service of a claim form out of the

The deputy High Court judge held that the respondents’ actions

jurisdiction, and there was no justification for an extension of

had undermined the system of compensating accident victims

time.

which caused loss to the insurance companies behind the defendant sued and to those who advise those bringing such

Contempt of Court Mitsui Sumitomo Underwriting at Lords v Khan and others [Lawtel 5/02/2014] Her Majesty’s Solicitor General v Dodd and another [Lawtel 4/02/2014] From issue 005

claims and drove up insurance rates. It also imposed on those liable the burden of separating out the justifiable from the unjustifiable claims. While a legitimate exercise, for those who made genuine claims that practice could often be upsetting and obtrusive. Further, the respondents’ behaviour struck at the principle of law that made the initial assumption that one who asserts something is assumed to be telling the truth.

All three were co-conspirators and therefore the starting point

In Mitsui Sumitomo Underwriting at Lords v Khan and others

had to be that they had all played an equal role. Prior to the

[Lawtel 5/02/2014] the applicant insurer applied for committal of

accident, the first respondent had been a hard- working member

the respondents for an attempted fraud.

of society. It was also necessary to take into account the three

In 2008, the first respondent had sustained head injuries following a road traffic accident in which a lorry had knocked him off of his bicycle. He made a full recovery from his injuries and was therefore entitled to modest damages. However, with the help of his wife and the third respondent, who subsequently acted as

years and three months that had passed since the deception, the serious injuries that he had sustained and that he would not now receive the damages that he was legitimately entitled to, and his acceptance of guilt at an early stage. Accordingly, he was sentenced to an immediate term of nine months’ imprisonment.

his litigation friend, the first respondent tried to take advantage

The third respondent had been a leading player in the fraud and

of the situation for financial gain. He concocted an elaborate

therefore there was no need to distinguish him from the first

fraud exaggerating the effect of his injuries, which resulted in four

respondent; he had been the first respondent’s litigation friend.

doctors’ reports concluding that he had permanently impaired

Accordingly, he was also sentenced to an immediate term of nine

cognitive function. In his particulars of claim the first respondent

months’ imprisonment.

alleged that he needed 24-hour professional care and that he required certain equipment as result of his injuries and that his house required modification. On the same date that the claim was issued, the insurer offered to settle for £75,000; the first respondent refused. In a preliminary schedule of loss he claimed over £1M. The second and third respondents made false oral statements to the first respondent’s solicitors asserting that they had given him constant care since the accident.

The insurer arranged for surveillance to be carried out and discovered that by October 2010 the first respondent was functioning normally and was capable of full-time work. The surveillance footage was disclosed and the fraud later admitted.

The insurer made a renewed offer to settle which was eventually accepted. The respondents were all of previous good character and had accepted their guilt at an early stage. The second respondent was 29 and the third respondent 61.

15

The second respondent, the wife, who was 29, was also of good character and had accepted her guilt at an early stage. She had not played a prime role in the conspiracy; she had played a lesser part in that she had given a written statement supporting the first respondent’s evidence. She had a 15-month-old daughter and accordingly was sentenced to seven months’ imprisonment suspended for two years.

Although Her Majesty’s Solicitor General v Dodd and another [Lawtel 4/02/2014] is a commercial case, the judge, sentencing two men for contempt of court, made reference to personal injury claims when looking at the test for whether or not a custodial sentence was appropriate.

The Solicitor General applied to commit the first and second respondents for contempt of court arising from admitted false statements in a claim for passing off. The first respondent had

been the CEO of a tableware company and the second respondent

by others and were bitterly ashamed of what they had done. That

had been the sales director. The company had launched a new

said, it was very serious to put false evidence before the court.

beer glass, the design of which had been registered. A distributor

Justice depended on openness, transparency and honesty. If the

informed the first respondent that the design had been copied

respondents had not made the mistake about timing, they might

by a competitor company. It refused to give undertakings, and

have gotten away with it. The seriousness was compounded by

in addition to a claim for design infringement, the respondents

the number of times the lie was repeated. The custody threshold

brought a claim for passing off. In relation to the latter, they

had been passed. The underlying rationale for committal applied

changed the dates of emails solicited from distributors to support

equally whether it was a claim for passing off or a false personal

the claim. The first respondent provided a witness statement

injury claim and the administration of justice was affected to the

which stated that the emails had been unsolicited and that the

same degree in both. The most that could be said was that the

dates were true. The competitor company’s skeleton argument

level of seriousness was lower in the instant case such that any

warned very clearly of the consequences of telling lies with regard

custodial sentence should be reduced. Further, proportionality was

to the emails but the respondents maintained that they were

an important consideration and the longer that the respondents

unsolicited; reliance was placed on them and their company was

were incarcerated, the harder it would be for their blameless

awarded an interim injunction. When the matter came before the

colleagues to continue business. It was important to take into

court again, the first respondent repeated the false statements

account their full and frank confession and full cooperation with

but the competitor company called evidence that the emails had

the Solicitor General. The first respondent’s conduct was more to

to be false as its beer mug was not out on the market when they

blame; he was the chief instigator and a sentence of six months’

were sent. The respondents then ceased to rely on the emails but

imprisonment was appropriate. The second respondent had only

still maintained that they were genuine, and that they would go

one false affidavit but was a party to the concoction of emails and

ahead with injunctive relief on the basis of an allegation of design

he was sentenced to two months’ imprisonment.

infringement. The competitor company opposed an injunction as the respondents were not coming to court with ‘clean hands’ and continued to question the emails. The respondents eventually admitted that they had asked the distributors to send the emails, indicated what they wanted them to say, and that they

It was appropriate in the interests of privacy to make an order pursuant to CPR 31 that evidence relating to the personal matters of the respondents could only be accessed by a non-party upon application to the court.

had changed the emails’ dates. From that date, full and frank disclosure was given and the respondents did not try to justify their actions, simply explaining them on the basis that they were angry that the competitor had not admitted that it had copied

Costs budgeting Porbanderwalla v Daybridge Ltd [Lawtel 11/02/2014]

the design.

From issue 006

The respondents accepted that the emails interfered with the

With costs budgeting proving to be the current ‘hot potato’, it

administration of justice but submitted that their contempt was of

is not helpful that two versions of a similar court form are in

a different character from the usual case, as in any event they had

circulation, leading to further confusion. This issue was dealt

been successful in obtaining a permanent injunction against the

with in Porbanderwalla v Daybridge Ltd [Lawtel11/02/2014].

competitor, which had not been prejudiced by anything they had done, and the case should be distinguished from, for example, a false personal injury claim brought for financial gain.

The High Court judge held that there was no doubt that the

The claimant, supported by the defendant, appealed against a decision that the parties’ recoverable costs should be limited to the court fees incurred because they had failed to submit costs budgets.

remorse the respondents had shown had been genuine. They were men of exemplary character who were spoken of very highly 16

The claimant’s claim was for damages consisting mostly of credit

date in the notice as a trigger in that context on the basis that

hire charges. Service was acknowledged and a defence filed. Both

the notice would specify when that matter was to be complied

parties were represented by solicitors. It was admitted that an

with. Rule 3.13 referred to a CPR 26.3(1) notice which specified

accident had occurred but liability and quantum were in issue. A

a date by which the costs budget was to be filed. In the absence

notice of proposed allocation to the multi-track was sent to both

of a requirement for the exchange and filing of a budget in the

parties in form N149C pursuant to CPR PD 26 – 2.1. There was no

notice, or a case management conference, the requirement was

reference on that form to any requirement to file a costs budget.

not triggered.

Both parties filed directions questionnaires but not costs budgets.

The claimant sent a covering letter with the questionnaire stating that a Precedent H costs budget form would be filed in advance

Expert evidence

of the case management hearing. The district judge considered

Neile v University Hospitals NHS Trust [Lawtel 11/02/2014]

the statements of case and the questionnaires and made an order allocating the claim to the multi-track and limiting the

From issue 006

recoverable costs for each party to the court fees because they

The case of Neile v University Hospitals NHS Trust [Lawtel

had failed to submit costs budgets in form H.

11/02/2014] is a helpful illustration of the courts’ current

The claimant submitted that CPR 3.13 requiring parties to file and exchange budgets in a multi-track case did not apply until the

approach to controlling expert evidence. It also confirms how important it is to select carefully the expert witness instructed.

case had been allocated to the multi-track by the judge’s order; no

The claimant had been left totally blind, partially deaf and with

date was specified in the form N149C served under CPR 26.3(1)

balance problems and facial paralysis following illness. She had

for the filing of costs budgets, and there had been no case

presented symptoms to her GP which she alleged should have

management hearing, so that the requirement to file a budget

alerted a reasonably competent doctor to the strong possibility

was never triggered.

that she was suffering from meningitis and that she should have

Allowing the appeal, the County Court judge held that CPR3.13 expressly provided that a budget should be served and filed by the date specified in the notice served under CPR 26.3(1) or, if no such date was specified, seven days before the first case management conference. That would be before allocation. That was the specific rule governing the procedure at that point, and its terms were clear. To apply the clear terms of CPR3.13 did not deprive CPR3.12 of meaning or effect, for it was only if the case was subsequently allocated to the multi-track, that the provisions of CPR3.14 and following had effect. In that sense that section of the rules applied to multi-track cases. But CPR3.13 operated prior to that allocation.

CPR 26.3(1)(b)(i) required the notice of proposed allocation to specify any matter to be complied with by the date specified in the notice. The link between that rule and CPR3.13 was plain, and they should be read together. The notice envisaged by CPR 3.13 was a notice which would specify any matter to be complied with by the date specified in the notice. Rule 3.13 adopted the 17

immediately been treated with penicillin and transferred to hospital. In order to succeed in her claim she had to establish that the doctor ought to have diagnosed meningitis, treated it, and that the treatment would have made a difference to the outcome. One of the Trust’s experts produced a report which said that the claimant’s injuries might not have been caused by meningitis. The claimant submitted that she should be able to meet like-with-like by allowing her expert to prepare an additional report which would directly answer the questions raised by the Trust’s expert. With regard to a separate and additional expert’s report, the claimant submitted that since she had instructed an ophthalmologist rather than a neuro- ophthalmologist, as the Trust had, the experts were not matched and she should be able to instruct somebody else.

The Trust contended that the claimant was expert-shopping.

Allowing the application in part, the deputy High Court judge held that the decision to permit additional evidence was a case management decision; there had to be good reason for doing so, the overriding objective was to deal with the cases justly

and expeditiously, and each application was fact sensitive and case

to adduce the evidence of an accountant who specialised in

specific. The later the request, the less willing a court should be

dental practices. The application was not heard until about two

to grant it. In the instant case, the trial was listed for late March

weeks before the trial window. The judge refused the application:

2014. There was force in the claimant’s argument that the Trust,

he decided that the defendant had left its application until the

through their expert, had raised for the first time in the expert’s

last minute, and that the Master had been clear that no expert

report, that the injuries had not been caused by meningitis. That

evidence was required and the defendant had misinterpreted

argument had not been raised in the Trust’s defence. Further,

his order to mean that the door was still open. He also decided

the claimant’s expert was already on board and was able to assist

that the report was not expert accounting evidence within the

the judge. Allowing additional evidence was proportionate in

meaning of the Master’s order, but was simply evidence about

circumstances where there was no bad faith on the claimant’s

the market in dental practices, which could be dealt with in the

part. The claimant’s expert was able to meet the issues raised by

claimant’s cross-examination.

the Trust’s expert and it was in the interests of justice to allow a new report.

Allowing the appeal, the Court of Appeal held that the Master had allowed the possibility that the parties would apply for permission

With regard to the instruction of a new expert, the claimant’s

to adduce expert accounting evidence, and he had set a timetable

current expert had dealt with causation and damage to the

for that, with which the defendant had complied. It was not its

optic nerve. He appeared to have no difficulty coming to a

fault that it had taken several weeks for the matter to be listed.

perfectly proper opinion and named neuro-optics as one of

The judge should not have been influenced by the terms of the

his areas of expertise. There was no good reason for permitting

Master’s order; the fact was that the Master had left the door

a change in expert when the one instructed was perfectly able

open for an application. Only a small part of the report could be

to deal with the issues. The fact that one expert had more

described as expert accounting evidence. Other parts of it were

experience than another was not uncommon.

accounting evidence in a broad sense. However, all of it was given by a chartered accountant. Overall, the report was within the

Expert evidence

scope left open by the Master. Therefore the judge’s reasons for excluding the report were wrong.

NHS England v Jowhar

The matter would be considered afresh. The report was an expert

From issue 42

report. It would be for the trial judge to decide what weight

In NHS England v Jowhari [Lawtel 24/11/2014], the claimant/ respondent claimed that the defendant/appellant was in breach of statutory duty by temporarily removing him from the National Dental Performers’ List, which he alleged caused him to lose the opportunity to purchase a dental practice. His claim exceeded £2m, which was the revenue he contended that he would have generated at the practice if he had been able to buy it. At a case management conference, the claimant asked for the appointment of a single joint accountancy expert; the defendant contended that both parties should have an expert. The Master was not persuaded that any accountancy expert was needed, but he did not want to exclude the possibility altogether, so he ordered that

to give its contents. It was a thin report, not well resourced or referenced. The burden of proof was on the claimant, and his evidence did not condescend to detail. The report would be helpful in finding inadequacies in his evidence. The report could materially add to the defendant’s case at trial. It should not be denied the opportunity to adduce it, even though it might not add very much. The Master had rejected the idea of a single joint expert. If the claimant had wanted such an expert, then he should have appealed against the Master’s order. He did not raise that issue before the judge. It was too late to resurrect it, especially as it would result in the loss of the trial date, which the court should be very slow to countenance.

the parties could apply for such evidence to be admitted by a later date. Just before that date, the defendant applied for permission 18

Expert evidence Rich (Protected Party) v Hull and East Yorkshire Hospital Trust [Lawtel 8/04/2014)

where the trust would be taken by surprise. Once exploration of the evidence had taken place, the trial judge would be in a much better position to decide how much weight to put on the evidence.

Issue 014 The clinical negligence case of Rich (Protected Party) v Hull and

Compliance with Directions

East Yorkshire Hospital Trust [Lawtel 8/04/2014) looks at the fine

Newland Shipping & Forwarding v Toba Trading FZC and others

line that sometimes exists between expert and factual witness

(2014) EWHC 210

evidence.

The appellant/claimant had brought a claim against the respondent/defendant trust alleging that a failure to administer antenatal steroids prior to her delivery in 1993 had caused her to suffer cerebral hypoxia-ischemia leading to cerebral palsy. The issue revolved around the word “likely” in the relevant guidelines at the time, which said that the college would encourage all obstetric units to consider the use of steroids when delivery was likely before 34 weeks. That had been interpreted by the treating doctor as meaning more likely than not, that was, more than 50%.

From issue 007 Almost every day brings more post Jackson/Mitchell cases.

Although these are non-personal injury cases we report them because they reflect the current attitude of the courts.

In Newland Shipping & Forwarding v Toba Trading FZC and others (2014) EWHC 210 (Comm) the first defendant company and the third defendant (an individual) sought relief from sanctions under CPR 3.9 in respect of an order entering judgment against them.

They also sought the variation and/or revocation of the order

The claimant’s proposed witness had been on the committee

under CPR 3.1(7).

that issued the guidelines, and said that “likely” in the context

The claimant had claimed sums due from the first defendant, an

meant a material possibility, namely between 5% and 20%, and it did not have such a high threshold as to mean more than 50%.

The Master held that the witness’ evidence was expert evidence regarding which there had been no application to admit, as he was not a treating doctor. The issue on the claimant’s appeal was whether it was appropriate to allow the claimant to admit the witness’s evidence on the meaning of the word “likely”.

The claimant submitted that it was not expert evidence but a question of fact for the trial judge as to what the treating doctor thought, and whether that was reasonable.

Allowing the appeal, the deputy High Court judge held that when a case management decision could potentially tie the hands of a trial judge, such a decision had to be treated cautiously. The Master’s decision appeared to have been based on arguments that had not been advanced before him and if there had been an application to admit the expert evidence, he might have decided differently. It was factual evidence, but even if the court was wrong about that, justice required the evidence to be admitted.

The court was reluctant to tie the trial judge’s hands in a pre-trial decision when it was not aware of all the facts. It was not a case 19

Iranian-owned company based in the United Arab Emirates, in respect of the supply of oil products. The third defendant was said to be a board member, managing director and an (or the) alter ego of the first defendant. The defaults on which the order entering judgment was based were the following: an allegedly inadequate disclosure list from the first defendant; a failure to file separate disclosure lists on behalf of the first and third defendants; a failure to serve witness statements by 25 October 2013 pursuant to an order made on 26 July 2013. Neither of these defendants had attended the hearing on 15 November 2013 at which the order entering judgment was made. They had become involved in a dispute with their solicitors over fees and their solicitors had ceased to act for them. They were re- instructed on 27 November 2013. The claimant had brought two actions. They had been ordered to be heard together at a trial fixed for February 2014.

Allowing the applications in part, the High Court judge held that for it to be appropriate to exercise the discretion which existed under CPR 3.1(7), the party seeking variation and/ or revocation of the order would usually have to establish one of the following: that there had been a material change of circumstances since

the order was made; that the facts on which the order was made

accidents and a signed mandate for the release of his clinical

had been misstated; that there had been a manifest mistake

records, among other things.

on the judge’s part in formulating the order. Only the second requirement was met here: it was stated that the claim for the price was $4,534,120.48, whereas it was in fact $3,904,060.16; the judgment would be varied so as to reflect the correct figure.

Following his non-compliance with that order, an unless order was made on 11 December 2012: it was provided that, if disclosure was not made by 3 January 2013, the claimant’s claim would be automatically struck out. By an order of 9 April 2013,

It was clear that the judgment entered against the third defendant

a district judge declared that the claim stood struck out, having

was a judgment in default rather than a judgment entered on

considered written representations from the solicitors acting for

the basis of non-compliance with court orders. He had never

the first defendant and from the solicitors acting for the second

acknowledged service. The appropriate procedure for challenging

respondent insurer. The claimant then made an unsuccessful

the judgment in his case was CPR 13 and not 3.9.

application to set aside the order of 9 April.

Relief from sanctions under CPR 3.9 would be granted in respect

He then appealed arguing that the automatic strike-out provisions

of the second action, since the non-compliance in relation to

had not been triggered as there had been no breach, or no

disclosure and witness statements had occurred only in the first

substantial breach, of the order of 3 August 2012. First, his GP’s

action.

surgery had sent his records to the first defendant on 8 February

Relief from sanctions would be refused in respect of the noncompliance in the first action. The nature of that non- compliance was serious. The defaults in relation to disclosure and witness statements were matters of substance and importance, particularly bearing in mind the February trial date. Further, there was no good reason for the defaults: any difficulties that had arisen as a result of the first defendant’s loss of representation were foreseeable consequences of its not being prepared to pay fees which it was able to pay but chose not to. In accordance with

2013; had the judge’s attention been drawn to that fact, he should have inferred that the records were sent following a request under the mandate. Second, although he had been involved in a previous accident in 2005, he was not in breach of the order of 3 August 2012, as his former solicitors had disposed of a copy of the relevant medical report; he was not obliged to state what efforts had been made to locate the report, as the August order had been for specific discovery and no requirement under CPR 31.12(2)(b) for a specified search had been made.

the robust approach required under the new form of CPR 3.9 this

Dismissing the appeal, the High Court judge held that the judge

was not an appropriate case for relief. If the first defendant was to

who dismissed the claimant’s application to set aside the order of

have any recourse in the first action, it would need to be by way

9 April 2013 had not erred in concluding that there was no relevant

of appeal.

application before him. The April order merely declared that the claimant’s statement of case had been struck out on 3 January

Wahid and another v Skanska UK Plc and another (2014) EWHC 251 (QB) In Wahid and another v Skanska UK Plc and another (2014) EWHC 251 (QB), the appellant/claimant claimed to have been injured in a road traffic accident allegedly resulting from the first respondent/defendant’s negligence. The first defendant put in issue the genuineness of the accident. On 3 August 2012, an order was made for standard disclosure by lists. The claimant was ordered to provide, by 15 October 2012, copies of any medical reports outlining injuries sustained in any previous road traffic

2013. There was no application to set aside the striking-out on 3 January or the unless order of 11 December 2012 pursuant to which the claim was struck out.

The judge had been right to hold that in any event an application for an extension of time would have been required to make an application for relief from the sanction of the December order and that there were no grounds on which it would be proper to grant an extension or relief. A challenge to the validity of the unless order of December 2012 or the consequential automatic strikeout of 3 January 2013 would have to have been made by way of appeal against that order and the automatic strike-out or by way 20

of an application to vary or revoke the December order under

The claimant argued that as the original budget was in breach of

CPR 3.1(7). In the interests of finality in litigation, considerations

CPR 3.13, the claimant’s solicitor required relief from the sanction

of delay would apply to such an appeal or application. In any

otherwise imposed by CPR 3.14 and that CPR3.9 applied. It

event, the claimant’s counsel had conceded before the judge that

emphasised the importance of statements of truth and asserted

the claimant had not complied with the order to give a medical

that there was no reasonable excuse for the solicitor’s failure and

mandate. He was also in breach of the part of the August 2012

that there should be no relief from sanction.

order which required the provision of copies of any medical reports outlining injuries sustained in previous accidents. The requirement was for standard, not specific, disclosure.

Dismissing the application, the High Court judge held that there was nothing in CPR or the relevant practice direction requiring each and every failure to comply with the formal requirements for

CPR 31.10(4) provided that the standard disclosure list had to

budgets as rendering the budget a nullity. The logical consequence

indicate, among other things, those documents which were no

of the defendant’s argument was that every irregularity, even an

longer in the party’s control and what had happened to them. The

omitted word or spelling mistake, would make the budget a nullity,

list of documents provided by the claimant did not include such

which would achieve nothing except to bring the law generally

a statement regarding the medical report resulting from the 2005

into disrepute. The importance of statements of truth in costs

accident.

budgeting was not to be underestimated, but it varied depending

Comment This case emphasises the need for disclosure lists to be completed properly. The claimant’s failure in this case to list the medical reports from his previous claim that had been disposed of, is often mirrored in other cases where claimants cannot produce earnings information which they have lost or destroyed. Rarely are these dealt with in the disclosure lists, as documents no longer in the claimant’s control and the reason given for what happened to them.

on context. Their purpose in costs budgets was for solicitors to certify the reasonableness of the budget. The notion that a document which included the words “statement of truth” and which was signed by the partner of a law firm might nevertheless be a complete nullity was unsustainable. The budget had been filed and served on time; it suffered only from an irregularity that had consequently been rectified. CPR 3.14 was not, therefore, applicable.

If the court was wrong that CPR 3.14 did not apply, relief from sanction would have been granted on the basis that the noncompliance was trivial and a failure of form rather than substance.

Bank of Ireland v Philip Pak Partnership (2014) EWHC 284 (TCC) In Bank of Ireland v Philip Pak Partnership (2014) EWHC 284 (TCC), the defendant applied for an order that the claimant was in breach of CPR 3.13 because it had filed a costs budget which did not contain a full statement of truth.

It would not generally be appropriate to characterise the absence of a statement of truth as “trivial” but, on the facts of the instant case, the defendant could have been in no doubt that the solicitor signing the budget was intending to certify the costs as reasonable. The case was far removed from one where there had been a failure to file and serve the budget.

The claimant’s costs budget was in the form of Precedent H annexed to CPR PD 3E. Contrary to the claimant’s solicitor’s normal practice, it had been prepared by an external draftsman, who

Compliance with directions

assured him that it was ready to sign. Acting on that assurance,

Chartwell Estate Agents Ltd v Fergies Properties SA and another

the solicitor failed to notice that the document did not include the full statement of truth. He signed it and the parties’ costs budgets were exchanged seven days before the case management

[Lawtel 21/02/2014] From issue 008

conference. An identical form was subsequently served with the

In Chartwell Estate Agents Ltd v Fergies Properties SA and

full statement of truth included.

another [Lawtel 21/02/2014] the claimant/appellant applied

21

for an extension of time to serve its witness statements in its

statements and then applied to serve supplemental statements

claim against the respondent/defendant for commission owed

if that became necessary upon full disclosure. There was no

following the sale of a property.

justification for its failure to seek an extension of time before the

The claimant had made repeated requests to the defendant, stating that it would apply for specific discovery if it did not provide full disclosure, without which it was impossible to complete its witness statements. The defendant refused those requests, disagreeing with the documents’ relevance and their effect on the preparation of witness statements. The claimant informed the defendant that it was not going to be ready to exchange witness statements simultaneously on the relevant date and the exchange did not take place. The defendant stated that although it would have been ready to exchange, it had not finalised its own statements because of the claimant’s stated position. The claimant did not make an application for specific discovery. The defendant later offered disclosure without seeking to determine the issue of the documents’ relevance, but refused to consent to an

exchange date. However, the claimant’s default could not be seen in isolation as the defendant’s eventual offer of disclosure could have been made much earlier. Most importantly, the instant case concerned a simultaneous exchange of statements, rather than sequential service. The defendant had not been ready to exchange on time. There was therefore default on both sides. The trial date remained and both parties could exchange witness statements almost immediately. Refusing relief through a robust application of CPR 3.9 as amended would have effectively ended the claimant’s claim. That was too severe a consequence and an unjust result when considered against the history of the case. As the court would not increase the costs budgets any additional expenditure incurred would be a direct consequence of the parties’ defaults.

extension of time for serving the witness statements, contending

(Obiter) There was clear authority that CPR 3.10 constituted a

that that was a matter for the court to consider. Several weeks

sanction. It was arguable that, when seeking an extension of time

after the ordered exchange date, the claimant issued the instant

before the trial had started, CPR 3.9 did not apply because the

application for the court’s permission, as required by CPR 32.10,

sanction had not yet taken effect. If that was true, then relief

to serve the witness statements out of time.

from sanctions would not be required and the court would

It submitted that (1) an extension of time should be granted as the breach was trivial and there had been a good reason for the breach, given the defendant’s failure to provide the disclosure earlier and the defendant’s own failure to serve its witness statements; (2) the relief from sanctions provision under CPR 3.9 did not apply to an application for an extension of time under CPR 31.10, so that the court was only required to decide whether to grant permission to adduce the statements.

Allowing the application, the High Court judge held that notwithstanding the purported complexity of the case’s issues, it was an important factor that there was nothing to prevent the

just be required to consider, applying the overriding objective, whether to extend time. It was also possible that the actual sanction under CPR 32.10 was that permission would be needed to adduce the witness statement. The contrary view was that when the time limit for exchanging witness statements expired, CPR 32.10 debarred a party from calling a witness unless the court gave permission, so that the debarring ran from the expiry of the deadline until the point at which permission was granted, when relief from the sanction would be required. If the court was wrong that CPR 3.9 had applied, it had still been appropriate to extend time.

trial window being maintained. Both parties had been at fault.

The ongoing disclosure dispute should have been addressed at an earlier case management conference. Having taken issue with the defendant’s disclosure, the claimant’s failure to apply for specific discovery and for an extension of time for serving the witness statements was not trivial. Even in the absence of full disclosure, the claimant could have served its witness 22

Default judgment Samara v MBI Partners UK Ltd and another (2014) EWHC 563 (QB) From issue 010 Defendants should note the case of Samara v MBI Partners UK Ltd and another (2014) EWHC 563 (QB), which confirms what many had already suspected: that when applying to set aside a default judgment, the defendant is now required to address the new approach to the overriding objective with its stress on the compliance with rules, orders and practice directions.

The first defendant had failed to file a form of acknowledgment of service or a defence and at a hearing on 13 February 2012, judgment was entered against it. It was not until 21 May 2013 that an unsuccessful application was made to set aside that judgment. The first defendant appealed to a High Court judge.

Whilst confirming that even under the previous approach to such applications it would have failed, the judge held that the new regime has universal application and the need for promptness has even greater significance than previously. The master had considered three separate periods of delay on the part of the first defendant and it was appropriate that the judgment was entered.

Comment

Accident Investigation Branch (AAIB) of the Department for Transport. The case has now been to the Court of Appeal and is reported as Hoyle v Rogers and others (2014) EWCA Civ 257.

The appellant/defendant argued that the report could not be admitted as expert evidence. The appeal was supported by the secretary of state and air transport association as interveners.

They submitted that there should be a presumption against admitting AAIB reports, as admissibility would inhibit investigators from carrying out their role and discourage witnesses from assisting investigators.

Dismissing the appeal, the Court of Appeal held that the defendant’s suggestion that the report’s authors had not been shown to have the necessary credentials to be experts was not well founded. The identity of the principal investigators was known and their expertise was readily discoverable. The bar to be surmounted to be an expert was not particularly high; the degree of expertise went largely to the weight to be given to the evidence rather than its admissibility. Nor was it any objection that several experts had contributed to the report. That was inevitable in a field such as air crash investigation. The report was not a bare finding: its statements of fact were evidence which the trial judge could take into account as he could any other factual evidence. Its expressions of opinion were ones to which a court was entitled to have regard. It was open to an expert to express an opinion

The significance of this ruling is that if defendants allow default

based on the facts insofar as his conclusion was informed by

judgments to be entered, any application to set aside the

his expertise. The AAIB was a body with the requisite expertise.

judgment will need to address the issues of why the judgment

Insofar as an expert’s report opined on facts which required

was entered (was the reason ‘trivial’?); how promptly the

no expertise of his to evaluate, it was inadmissible, but there

application was made; and then the prospects of successfully

was nothing to be gained from excising opinions in that category.

defending the claim if the judgment is set aside. Any delay in

The judge had correctly held that the trial judge should see the

making such an application will weigh even more heavily against

whole report and leave out of account any part of it that was

the defendant than was previously the case.

inadmissible. The defendant’s submission that the Civil Evidence Act 1968 and CPR 35 comprised a comprehensive code regarding expert evidence which excluded evidence such as the report was

Evidence

not well founded. Section 3 of the Act did not purport to be all-

Hoyle v Rogers and others (2014) EWCA Civ 257

embracing or to alter the position at common law. Part 35 was

From issue 011

concerned with persons who had been instructed to give expert evidence for the purpose of proceedings; the expert evidence

In Greenwoods’ Alert 355 we reported the first instance decision

in the report did not fall within Part 35. Accordingly, the report

in Rogers and another v Hoyle (2013) EWHC 1409 (QB) in which

was prima facie admissible and the claimants did not require the

the judge ruled as admissible as evidence a report by the Air

court’s permission to adduce it.

23

The court would not exercise its discretion to make a presumption against the admission of AAIB reports. The report was admissible evidence. It was of particular potential value on account of the AAIB’s independence, the fact that it was the product of an investigation by experts who were not concerned to attribute blame, and the fact that the AAIB had greater ability than anyone

(3) The court may make an order under this rule only where – (4) the documents of which disclosure is sought are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings; and (5) disclosure is necessary in order to dispose fairly of the claim or

else to obtain and analyse relevant data. The exercise of discretion

to save costs.

was to be carried out in accordance with the overriding objective,

The applicants, a police officer and a newspaper publisher,

which tended to favour the inclusion of evidence such as the report: many litigants would find it very difficult to access the relevant information. Parliament had provided for reports to be made public and had not legislated, as it could have done, to make them inadmissible. Further, such a presumption would impose an onus on the party to deploy admissible evidence when the onus should be on the party seeking to exclude such evidence. There was no reason why admissibility of the report should inhibit inspectors in their work. Inspectors were professionals who were not concerned with establishing civil liability and had no need to be circumspect because someone might want to use the report in litigation. Even if reports were not admissible, they were available and could be used, even if not evidentially, as the foundation of a claim or defence; AAIB reports had in any event been used as evidence in past cases.

Further, reports were made public: the fact that they were also admissible was unlikely to be of critical inhibitory significance.

Admissibility was unlikely to significantly affect the willingness of people to assist the AAIB.

applied for third party disclosure of documents by the respondent Commissioner of Police of the Metropolis in two defamation claims.

One of the claims was by the claimant, MP Andrew Mitchell, against the defendant newspaper publisher in respect of its reporting of an incident in which it was alleged that the claimant shouted abusively at police officers, including the applicant officer; the other was the officer’s claim against the claimant in respect of his allegation that the officer had lied. Part of the claimant’s case was an accusation that the police officers involved had colluded to make a false statement. The documents sought were the result of an investigation into the incident under the Police Reform Act 2002. The applicants’ representatives had been permitted to inspect documents under conditions of confidentiality so that they could identify those documents that were relevant and necessary for the purposes of CPR 31.17. The police officers were invited to attend or make representations. A third party, who was not a police officer, appeared to object; according to his witness statements he had spoken to the claimant and to a police officer shortly after the incident. He objected to the disclosure on

Evidence

the basis that his evidence would be hearsay.

Mitchell v New Group Newspapers Ltd (2014) EWHC 1885 (QB)

The High Court judge held that the third party’s statements were

From Issue 24

unlikely to support the applicants’ cases or adversely affect the case of one of the other parties, and their disclosure was not

Cases relating to non-party disclosure applications are relatively

necessary in order to dispose fairly of the claims or to save costs.

rare but the issue has arisen in another chapter in the saga of

As to the third party’s evidence of his conversation with the police

Mitchell v New Group Newspapers Ltd (2014) EWHC

officer, that officer was one of those whose statements would be

1885 (QB). So far as it is relevant to this report, CPR 31.17 says: (1) This rule applies where an application is made to the court under any Act for disclosure by a person who is not a party to the proceedings.

(2) The application must be supported by evidence.

disclosed. His hearsay evidence was no more than evidence that a complaint was made shortly after the alleged incident. That was unlikely to add anything to the first-hand evidence of the officer. As to the third party’s evidence of his conversation with the claimant, the most that could be said about it was that it would be relevant, if at all, as evidence of propensity or 24

similar facts. It was unlikely that a judge at trial would consider

(a) inform the other parties that the witness is not being called

that the evidence of the words allegedly used by the claimant

to give oral evidence; and

in his conversation with the third party would have any material probative weight on any issue likely to arise.

In relation to the other third parties, who were all police officers,

(b) give the reason why the witness will not be called.

33.4

the criteria in CPR 31.17(3)(a) and (b) were satisfied, and the court

(1) Where a party –

exercised its discretion to order disclosure. The context was libel

(a) proposes to rely on hearsay evidence; and

actions between private parties, but the issues raised concerned the public to a greater extent than most libel actions. There was a strong public interest in the court having before it all the

(b) does not propose to call the person who made the original statement to give oral evidence

relevant evidence and documents. The third parties had legitimate

the court may, on the application of any other party, permit that

concerns about becoming involved in such a high-profile action,

party to call the maker of the statement to be cross- examined on

but they were all police officers and the events in question

the contents of the statement.

arose out of their official duties. The public interest in disclosure clearly outweighed the interests of the officers. Insofar as they had raised issues, their concerns could be substantially addressed by the conditions under which the order for disclosure was made, and by further court orders in the future if required.

(2) An application for permission to cross-examine under this rule must be made not more than 14 days after the day on which a notice of intention to rely on the hearsay evidence was served on the applicant.

The applicant National Crime Agency (NCA) had brought civil recovery proceedings against the respondents. The first respondent

Hearsay Evidence National Crime Agency v Azam and others [Lawtel 9/05/2014] From Issue 18 National Crime Agency v Azam and others [Lawtel 9/05/2014] is an unusual case looking at the working of Civil Evidence Act (‘hearsay’) notices.

Relevant extracts from CPR 33 are as follows: 33.2

wished to rely on the evidence of a number of witnesses, who were overseas, and he had served hearsay notices in respect of the same.

The NCA submitted that under CPR 33.4 the court should order that if the first respondent wished to rely on that evidence, the witnesses would have to be called and make themselves available for cross-examination. It argued under CPR 32.1 (the power of the court to control witness evidence), it was an exceptional case where justice required the witnesses to attend or else the evidence should be excluded, because it concerned alleged

(1) Where a party intends to rely on hearsay evidence at trial and

criminal conduct, was contradictory and needed to be properly

either –

tested.

(a) that evidence is to be given by a witness giving oral evidence

Refusing the application, the High Court judge held that CPR 33.4

(b) that evidence is contained in a witness statement of a person who is not being called to give oral evidence that party complies with section 2(1)(a) of the Civil Evidence Act 19951 serving a witness statement on the other parties in accordance with the court’s order.

(2) Where paragraph (1)(b) applies, the party intending to rely on the hearsay evidence must, when he serves the witness statement 25

contemplated that there might be a party that wished to crossexamine the maker of a statement proposed to be relied upon as hearsay evidence. That was different from the instant order sought, which was designed to ensure that if the terms of the order were not met the first respondent would be prevented from relying on the witnesses’ evidence. The NCA’s understanding of “call the maker of the statement” under the rule was different from

the ordinary usage of that expression. Ordinarily it described a

been discriminated against by the respondent/ defendant

party producing a witness who was then called to the witness

on the grounds of race. After unsuccessful attempts to issue

box, or called to give evidence via video link; the NCA suggested

a claim form in the High Court and the Central London County

that the party relying on the hearsay would be expected to assist

Court, he was incorrectly advised that he had to issue the claim

in producing the witnesses. There was no authority that CPR

in the County Court Money Claims Centre, which contrary to

33.4 provided for an order that a party should call the maker of a

his written directions, served the claim form on the defendant,

statement where there was no reason to believe that that party

rather than returning it to the claimant for service under CPR

could produce the witness concerned.

6.4(1). He notified the defendant that the claim form had been

An exclusionary order under CPR 32.2 should only be made exceptionally, if justice required it. The issues to which the evidence was relevant were important. However, the circumstances did not come near to making it the sort of evidence that could be excluded when it was otherwise admissible. The trial judge would be able to form a view as to the appropriate weight to be given to the evidence. The NCA’s application was ill-founded and based upon a misunderstanding of the CPR.

served contrary to his instructions to the court and the defendant consequently accepted that service was ineffective. It had appeared that the claimant had not wanted to serve the claim form as he was awaiting the outcome of misconduct proceedings that the defendant had brought against him. He also applied to extend the time for service of the claim form under CPR 7.6. A district judge’s decision holding that the court’s service had been effective and granting the application for an extension of time for the service of the claim form was overturned on appeal. The claimant appealed against that decision. The issues

Service of a Claim Form Stoute v LTA Operations Ltd (2014) EWCA Civ 657

were whether (i) the court’s service of the claim form had been effective; (ii) CPR 7.6 applied in the instant case; (iii) if service had been effective, whether the district judge had erred in extending

From Issue 19

time for the service of the particulars of claim.

The following extracts from CPR are relevant to this report.

Allowing the claimant’s appeal, the Court of Appeal held that it was

3.10 Where there has been an error of procedure such as a failure to comply with a rule or practice direction – (a) The error does not invalidate any step taken in the proceedings unless the court so orders; and (b) The court may make an order to remedy the error 6.4 (1) …the court will serve the claim form except where – (a) A rule or practice direction provides that the claimant must serve it;

necessary to begin by asking whether CPR 3.10 which dealt with the consequences of a procedural error, applied in the instant circumstances. The service of the claim form by the court, in disregard of the claimant’s notification that he had wished to effect service himself, was an error of procedure under CPR 3.10.

There was no reason why the rule should not apply where the error had been an error of the court, the language was not confined to errors by a party and the policy considerations which underlay the rule seemed to be the same whether a procedural mistake was a party’s or the court’s responsibility. There was no reason why CPR 3.10 should not be applicable where there had been a breach of CPR 6.4(1). The possibility of prejudice to a

(b) The claimant notifies the court that the claimant wishes to

claimant was not a reason for treating premature service by the

serve it; or

court as a nullity. Insofar as a claimant might have suffered some

(c) The court orders or directs otherwise.

tactical disadvantage, the damage would have been done whether

In Stoute v LTA Operations Ltd (2014) EWCA Civ 657 the appellant/ claimant, a professional tennis player, had alleged that he had

service was a nullity, so that it would have to be effected afresh, or not. Any procedural prejudice could be addressed by the grant of an appropriate extension. However, if there was some important 26

reason why in a particular case service had to be effected by a claimant, an order could be made under CPR 3.10(a) invalidating the court’s service. The court’s service of the claimant’s claim form

(a) rule 6.5(1) (personal service); (b) rule 6.7 (service of claim form on solicitor or European

had been effective service.

Lawyer); and

CPR 7.6 was not applicable in the instant case. That rule applied

(c) rule 6.8 (defendant gives address at which the defendant may

to cases where service had not been effected within the time limit

be served),

under CPR 7.5, whereas in the instant case CPR 3.10 was relied on

do not apply and the claimant does not wish to effect personal

to establish that service had been effected, albeit by the wrong person.

Notwithstanding the importance attached in guideline cases to a systematic approach being taken to factors identified in CPR 3.9, a decision was not automatically bad in law because they had not been individually set out and considered. It was clear that the district judge had considered all the circumstances, including the particular CPR 3.9 factors that were relevant. The claimant’s failure to serve the particulars of claim could not be described

service under rule 6.5(2).

(2) Subject to paragraphs (3) to (6), the claim form must be served on the defendant at the place shown in the following table.

Nature of defendant to be served

Place of service

1. Individual

Usual or last known residence.

2. Individual being sued in the name of a business

Usual or last known residence of the individual; or principal or last known place of business.

3. Individual being sued in the business name of a partnership

Usual or last known residence of the individual; or principal or last known place of business of the partnership.

as intentional; he had not served them as he had not believed that the claim form had been served. The district judge had been entitled to take into account the delay and confusion caused by the claimant’s misguided attempts to obtain an extension, but it did not follow that those considerations should have been decisive. He had been entitled to take the view that, however unsatisfactory the conduct of the claimant or his solicitors had been in that respect, it was outweighed by the reasons for granting permission.

(3) Where a claimant has reason to believe that the address of the defendant referred to in entries 1, 2 or 3 in the table in paragraph 2 is an address at which the defendant no longer resides or carries on business, the claimant must take reasonable steps to ascertain the address of the defendant’s current residence or place of

Service of Claim Form Norcross and another v Constantine and another [Lawtel 22/05/2014] From Issue 20

business (‘current address’).

The defendant/applicants were the personal representatives of a deceased businessman. The first respondent had purchased a 49% shareholding in the deceased’s nightclub business and later the second respondent company, which was the first respondent’s

The case of Norcross and another v Constantine and another

corporate vehicle, had purchased the remaining stake from

[Lawtel 22/05/2014] reiterates how important it is for a claimant

the deceased. At the same time the parties had entered into

properly to consider at what address a defendant should be

an agreement to settle any claims relating to the terms of the

served with a claim form.

acquisition by the respondents of the deceased’s holding, claims

The following extracts from CPR are relevant to this report:

that he had conducted the affairs of the nightclub companies in a manner which could give rise to legal redress and claims

6.9

against him by those companies of misfeasance. The respondents

(1) This rule applies where –

alleged that the deceased, before selling the business, had

27

misappropriated funds from companies within the business. The

claim form was purportedly served at an address in Essex on the

claims were covered by the settlement agreement it would be

basis that that was the deceased’s last known address under CPR

necessary to have a trial to consider the knowledge of the parties

6.9(2) and a default judgment was obtained in default of service

and the commercial rationale. There was also an argument that

of a form of acknowledgment of service.

the proper claimant in respect of the misappropriation claims was

The defendants argued that the default judgment had to be set

the relevant company which had suffered the loss.

aside because service of the claim form on the deceased was defective because the respondents had previously been told that he had moved to Thailand and been out of the jurisdiction since 2009 so that they had reason to believe under CPR 6.9(3)

Service of Claim Form Kaki v National Private Air Transport Co and another (2014)

that he no longer resided at the Essex address. The respondents

[Lawtel 30/05/2014]

contended that they had been entitled to take the view that there

From Issue 021

was no reason to believe that the deceased no longer resided at the Essex address.

The High Court judge allowed the application. The evidence disclosed that the respondents had notice of facts and matters which would clearly give reason to believe under CPR 6.9(3) that the deceased no longer resided at the Essex address. They had been made aware by the Insolvency Service that unsuccessful attempts had been made to serve him there during director disqualification proceedings. The deceased’s former accountant had also told them that the deceased resided abroad. The test was

There has been a run of cases relating to the service of claim forms and this continues with Kaki v National Private Air Transport Co and another (2014) [Lawtel 30/05/2014]. Although this is a commercial case it is of significance to personal injury claims because any claimant, who falls foul of the rules as to service of a claim form, could attempt to use cases such as this as a way of circumventing the problem.

In so far as it is relevant to this report, CPR 6.15 states (emphasis added):

objective. They had not attempted to serve at that address on

(1) Where it appears to the court that there is a good reason

the basis that it was the deceased’s usual address. It was apparent

to authorise service by a method or at a place not otherwise

from the evidence of the process server and the accountant

permitted by this Part, the court may make an order permitting

and from the fact that the respondents’ solicitors had not been

service by an alternative method or at an alternative place.

able to find a current residential address for the deceased, that the respondents had reason to believe that he no longer resided at that address. They could not simply ignore that information, especially when it came from third parties. They had failed to take the reasonable steps required by CPR 6.9(3). Accordingly the service was defective and the default judgment was set aside.

The terms of the settlement agreement were very wide and the defendants had a real prospect of establishing that some of the claims in the claim form, for instance breach of contract, were within the scope of the settlement. It was arguable that the use

(2) On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service.

The claimant/applicant applied for an order extending time for service of the claim form retrospectively and/or directing that the steps taken to bring the claim form to the attention of the respondent/defendants amounted to good service and/or dispensing with service of the claim form.

of the word “misfeasance” in the agreement meant that even

The claimant claimed for the return of US$4.4m paid to the

claims for fraud and theft would be covered. Thus they had a real

defendants under an agreement to purchase an interest in an

prospect of successfully defending the claim. The default judgment

aircraft, or damages, on the basis that the agreement had been

should be set aside if there was a real prospect in respect of any of

repudiated by the defendants. There was an alternative claim

the causes of action in the claim form. In order to determine what

for conversion. The agreement was governed by English law. The

28

defendants were domiciled in Saudi Arabia. The claimant sent a

by the agents. The claimant had not impressed on them the need

letter before action together with the claim form to the address in

for urgency. He must have known that service on the London

Saudi Arabia stated in the agreement which was the defendants’

solicitors had not been in time and that meant the application for

registered address. The letter and claim form were also sent by

an extension had not been made promptly.

e-mail to a member of the defendants’ legal department. The claimant also asked for details of an agent for service in England.

No response was received and the claimant obtained permission to serve the claim form on the defendants out of the jurisdiction.

The claim form was sent to the Foreign Process Section of the High Court for service by the Saudi authorities. The claimant obtained an extension of time to serve the claim form and sent the claim form and order extending time to the Saudi address and by e-mail to the defendants’ legal adviser. A further extension was obtained while awaiting service by the Saudi authorities. The claimant then obtained an order for alternative service by delivering the claim form to the Saudi address and to London solicitors. The order for alternative service was amended to reflect a new Saudi address for the defendants. The claim form was delivered to the London solicitors one day after the time for service expired and to the Saudi address three days later. The claimant obtained summary judgment. The d efendants then filed an acknowledgment of service indicating that it intended to challenge English jurisdiction and applied to set aside the judgment on the basis that the claim form had been served after the period of its validity had expired and that it had been unaware of the date for the hearing of the summary judgment application.

Allowing the application in part, the deputy High Court judge held that the court would not retrospectively extend time for service of the claim form under CPR 7.6(3). The key questions were whether the claimant had taken all reasonable steps to serve in time and whether the application for a retrospective extension had been made promptly. The claimant explained why there had

The court could retrospectively validate alternative service out of the jurisdiction; it was not necessary to show that the circumstances were exceptional. The method of alternative service could neither be explicitly permitted nor expressly prohibited in Saudi Arabia.

There was no doubt that by sending the letter and claim form to Saudi Arabia and e-mailing the defendants’ legal advisers, the defendants had been fully apprised of the nature of claim after permission to serve out had been granted and during the period of validity of the claim form. It was not the claimant’s fault that service through diplomatic channels had been unsuccessful.

Although not all reasonable steps had been taken to serve a claim form within the period of its validity, overall significant efforts had been made over a prolonged period and the claim form had been brought to the attention of the defendants, and it was right retrospectively to validate the steps that had been taken as good service under CPR6.15(2). The defendants’ objection was technical and the claim was not time-barred. Requiring a new claim form to be served would simply waste further time and costs. The effect of the order was not tantamount to saying that a failure to take all reasonable steps was a good reason for retrospectively validating alternative service. Although it was not of itself a good reason, the fact that the defendants had been well aware of the proceedings was a critical factor.

It was not necessary to decide the application to dispense with service. If the court had not retrospectively validated service under CPR 6.15(2), it would not have rectified the errors of procedure with regard to service generally under CPR 3.10.

been delay in serving in Saudi Arabia, including the timing of Ramadan, and that he had not realised until the defendants’ application that service had been effected a few days late. His case was that he had done enough in the circumstances. However, he had not taken all reasonable steps. For example he could have served the London solicitors at any time rather than trying to coordinate service on them and in Saudi Arabia. It would have been a reasonable step to serve them first. Furthermore, there had been delays in instructing agents in Saudi Arabia and delays 29

Service of a Claim Form Power v Meloy Whittle Robinson Solicitors (2014) EWCA Civ 989 From issue 026 Power v Meloy Whittle Robinson Solicitors (2014) EWCA Civ 989 is the most recent in a line of cases that has looked at the effective service of a claim form by the operation of CPR 6.15(2).

On an application under this rule, the court may order that

the claim form could not have been served in the ordinary way

steps already taken to bring the claim form to the attention of the

during the period of its validity for service and whether the steps

defendant by an alternative method or at an alternative place is

already taken to bring the claim form to the defendant’s attention

good service.

constituted good service. The matter should be considered afresh.

The

a

The claimant’s new solicitors could be criticised for failing to

compensation claim made by the appellant/claimant for vibration

respondent/defendant

had

successfully

settled

respond to the defendant’s solicitors’ query concerning the

white finger (VWF). However, the claimant later alleged that the

formality of service, and steps could have been taken in an

defendant had negligently failed to investigate and pursue a

attempt to ascertain what had become of the claim form. They

services claim on his behalf. A case management order issued

did not know that the proceedings had been issued on 14

in 2011 laid down the procedures to be followed by prospective

September 2012, as the defendant’s solicitors did, but they did

claimants alleging negligence against solicitors concerning VWF.

know that they had neither received the issued claim form from

In August 2012, one month before the expiry of the limitation

the court nor served it themselves. To them, therefore, it would

period, the claimant’s new solicitors sent draft claim forms to the

have been obvious that the proceedings had not been formally

Salford Business Centre, in accordance with a new administrative

served, unaware as they were that the proceedings had in

procedure, and requested that the issued claim form be returned

fact been served by the court on the defendant direct. To the

to them for service on defendant’s solicitors in accordance with

defendant’s solicitors it was equally obvious that the proceedings

CPR6.7. The claim form was issued on 14 September 2012. The

had not been formally served as they had not been served as

court, however, sent it directly to the defendant, who received it on

required by CPR 6. However, the correspondence proceeded upon

18 September 2012. Hard copies were then sent by the defendant

the clear understanding that the claimant was actively pursuing

to its solicitors. The court also failed to send the claimant’s new

his claim. Nothing short of an explicit enquiry concerning the

solicitors a notice stating the date upon which the claim form was

validity of service upon the defendant direct in the light of CPR

deemed served pursuant to CPR 6.14. The defendant’s solicitors

6.7 would have sufficed to put the claimant’s solicitor on notice as

wrote to the claimant’s new solicitors stating that it was unclear

to the errors made by the court. That the claimant intended to

whether the proceedings had been formally served, but indicated

pursue the claim was apparent not just from his i ssue and service

that the claim was being dealt with as if it was a live claim.

or attempted service of a claim form, but also from the time and

The claimant’s solicitors did not respond until after the limitation

money expended in compliance with the case management order.

period had expired. The claimant successfully applied for an

The defendant already knew the nature of the case; the only thing

extension of time for service of the claim form pursuant to CPR

added by the claim form was the circumstance that its issue and

7.6 and served the claim form on the defendant’s solicitors.

service or attempted service demonstrated that the claimant

However, the proceedings were later struck out, the judge

intended to convert his “potential claim” into an “existing claim”.

having decided that there was no good reason to authorise service

His solicitors only became aware of the court’s error at the end

by another method under CPR 6.15 because (i) there had never

of March or early April 2013. Thereafter, they acted in a manner

been any difficulty about effecting service and the defendant had

which “might just possibly be said to be promptly”. The defendant

not been evasive; (ii) where parties agreed to serve solicitor to

knew everything they needed to know about the claim and knew

solicitor, it was wrong to go behind that agreement; (iii) it was

that the claimant intended to pursue the action and that he

wrong to allow a claimant to sidestep any rigours by reliance upon

had at the very least attempted to serve proceedings upon them,

CPR 6.15.

through the medium of the court. The correspondence and

Allowing the claimant’s appeal, the Court of Appeal held that in the light of the guidance in Abela (2013), the judge’s first and third reasons for declining to grant the relief sought under CPR 6.15 were insupportable. The relevant focus was upon why

discussions between the solicitors, objectively viewed, could only have given the impression that the claim was acknowledged to be live, which in the context was consistent with service having been effected within the period of validity of the claim form. There was 30

an overwhelmingly good reason to order under 6.15(2) that the

time for service of the claim form under CPR 7.6(3) or for an order

steps already taken to bring the claim form to the defendant’s

under CPR 6.15(2) that steps already taken were sufficient to have

attention constituted good service.

brought the claim form to defendant’s attention.

The claim form had been issued on 7 August 2013. However, no

Norcross v Georgallides [Lawtel 7/07/2014].

A second case with a similar outcome is Norcross v Georgallides [Lawtel 7/07/2014].

The claimant had served the claim form at an address that he believed was the defendant’s address for service, but it was not the correct address. The defendant became aware of the proceedings and applied to set aside service. He then died and there was a short delay before his personal representatives were substituted as defendants. By the time that the defendant’s application to set aside was heard, the validity of the claim form had expired.

Service was set aside on the basis that the claimant had failed to take reasonable steps to locate the defendant’s correct residential address. However, the judge had observed that the service issues were not necessarily insurmountable. The claimant applied under CPR 6.15 for an order for deemed service.

Allowing the application, the deputy High Court judge ordered that the steps taken to bring the claim form to the defendant’s attention, in particular the service that had already taken place, were deemed to be good service. The claim form and particulars of claim had come to the attention of the defendant and his advisors well before the expiry of the claim form; that was apparent from the application to set aside service and the correspondence. The defendant was not prejudiced. Looking at the overall justice of the case, there was no point in requiring the claimant to re-start the proceedings and incur additional costs.

attempt was made to serve it on any of the seven defendants within the next four months. The claim form gave two addresses for the first defendant: one in Switzerland and the other in London. The claimant’s evidence was that it understood that the Swiss address was the first defendant’s residential address and that the London address was his office address. In fact, he had been residing in London for over two years: he had resided at the Swiss address for about two years but had moved back to London in 2011. On or about 9 January 2014, the first defendant received from the court a copy of an order giving permission for service out of the jurisdiction of the claim form on three defendants with addresses abroad. He instructed solicitors, who wrote to the claimant’s solicitors, informing them of his residential address in London and stating that they had instructions to accept service.

The claimant’s solicitors sent the claim form to them. They then objected to its late service, asserting that no steps to serve it had been taken within the four- month period allowed by CPR 7.5(1).

Allowing the defendant’s application but disallowing the claimant’s cross application, the High Court judge held that the claimant had argued that the case was governed by CPR 7.5(2), as the claim form was “to be served out of the jurisdiction” and therefore service could validly be effected within six months after the date of its issue; the claim form, it asserted, was properly to be regarded as one to be served out of the jurisdiction because one of the addresses given for the first defendant was in Switzerland.

That submission could not be sustained. CPR 7.5(2) was not concerned with, and did not permit, service of a claim form within the jurisdiction. It was clear that CPR 7.5(1) was concerned with

American Leisure Group Ltd v Garrard and others (2014) EWHC

the service of a claim form within the jurisdiction, while 7.5(2) was

2101 (Ch)

concerned with its service out of the jurisdiction. The claim form

The third case under this heading is American Leisure Group Ltd v Garrard and others (2014) EWHC 2101 (Ch).

The first defendant sought a declaration that the purported service by the claimant of its claim form and the accompanying particulars of claim was not valid. In the event that the application succeeded, the claimant cross- applied either for an extension of 31

was not served within the time limit imposed by CPR 7.5.

As the claimant’s application for an extension of time had been made outside the period specified by CPR 7.5 for service of the claim form, an order to extend the time for compliance with that provision could be made only if the claimant satisfied the requirements of CPR 7.6(3)(b) and (c). It had not complied with

7.6(3)(b), which required it to show that it had taken all reasonable steps to comply with CPR 7.5 but had been unable to do so. The fact that the claimant included both the Swiss address and the London address in the claim form indicated that it had doubt or

Part 18 Requests Beacons Business Interiors Ltd and another v Carey and another [22/05/2014]

concern as to where the first defendant should be served. The

From Issue 19

most elementary enquiries would have revealed that he resided

Cases relating to Part 18 requests for further information are

in London, not Switzerland. Further, no attempt had been made to serve the claim form on him by mid-January 2014. If the claimant had taken reasonably prompt steps to effect service on the first defendant even in Switzerland following the issue of the claim form, it was likely that it would have become apparent that he no longer resided there and that he in fact resided in London.

The claimant had also relied on CPR 6.15 but it was not in point. It was concerned with permitting service by a method or at a place not otherwise permitted by CPR 6. This case was not concerned with either the method by which or the place at which service was effected. The issue was the time at which service was effected, which was governed by CPR 7.5., with the power to extend time being conferred by CPR 7.6. CPR 6.15 was not a means by which time could be extended, and would certainly not be a means by which time could be extended where it had been or would be refused under CPR 7.6.

A declaration would be made that the purported service of the claim form and accompanying particulars of claim on the first defendant in January 2014 was not valid.

Comment These cases illustrate a growing trend on the part of claimants to circumvent problems with service by falling back on CPR 6.15.

Even where a claimant has failed to effect valid service of a claim form in accordance with CPR it is apparent the courts are likely to find that there has been service by an alternative method, wherever it is established that the defendant has knowledge of the proceedings by other means.

relatively rare and so Beacons Business Interiors Ltd and another v Carey and another [22/05/2014] is of interest.

The claimants had made four requests for further information from the defendants to seek clarification of evasive responses in their defences to aid their understanding at trial of the defendants’ case. The trial, which had been expedited, was due to commence in the week beginning 16 June 2014. On 6 May 2014 the claimants made a request for further information from the defendants to be received by 9 May. The defendants’ solicitors responded on 7 May saying that they would provide further information by 16 May. The claimants responded stating that was not an acceptable date but that it would permit a response by 14 May. The defendants’ solicitors responded on 15 May saying that they would provide the information by the following day at the very latest. On 16 May the defendants stated that they would not comply with the request for further information.

The claimants applied to the court and submitted that unless the defendants provided the further information requested, their defences should be struck out owing to their evasiveness, agreeing to comply and then changing their mind, and the undue simplicity of the information requested.

Allowing the application, the High Court judge held that it had been entirely reasonable for the claimants to seek further information from the defendants in the light of the evasive defences they had served. It was not appropriate to defer the exchange of witness statements and therefore the defendants would be ordered to respond to the requests by 27 May. For the defendants to agree to give further information and then change their mind and not comply at all meant that it was entirely appropriate for an unless order to be made. Unless they complied with the claimants’ requests for further information by the specified date, their defences would be struck out. The defendants had to have known that their defences were evasive.

32

Use of Witness Summaries Scarlett v Grace [Lawtel 6/06/2014] From Issue 22 Witness summaries are useful where helpful evidence is available from a witness but it is not possible to obtain from them a signed witness statement. However, Scarlett v Grace [Lawtel 6/06/2014] shows that there are limitations on the use of this device.

The respondent/defendant had been driving a car carrying four passengers when it hit a tree and the appellant/claimant, who was in the back seat, suffered serious head injuries.

The defendant admitted liability but the issue of contributory negligence remained to be tried, the question being whether the claimant had been wearing a seat belt. Witness statements which had been given to the police did not provide direct evidence on that question. Shortly before witness statements were due to be served, the defendant wrote to four witnesses, namely the front seat passenger, the first person on the scene and two ambulance personnel, asking to speak to them about the seat belt issue.

One of the ambulance crew said that he was not willing to assist and the other responded that he had no information about the seat belt. The front seat passenger said that she did not know whether the claimant had worn a seat belt and the first person on the scene did not reply. The defendant served witness summaries in relation to the four witnesses which stated that they would give evidence as to whether the claimant had worn a seat belt. The defendant successfully applied to the Master for

matters into account or to form a view as to the manner in which he had exercised his discretion. The merits of the case had to be looked at afresh.

It was not satisfactory for a witness’s evidence not to be known prior to trial, which was why a summary could be served only where the party was able to demonstrate that it was unable to obtain a statement. The response from one ambulance crew member was a straightforward, clear- cut refusal and justified the contention that the defendant was unable to obtain a statement from him. The Master’s decision in relation to that witness summary had been correct. The other ambulance crew member’s response demonstrated that he did not recollect whether a seat belt had been worn, but did not amount to a refusal. If a party submitted that it was unable to obtain a statement it must show that it had taken the matter to a point where a clear refusal to assist was made, whether express or implied. The defendant had not reached that point and a mere suspicion that the witness would be unlikely to cooperate was not sufficient to satisfy CPR 32.9(1)(b). It was impossible to say on the basis of the front seat passenger’s response that she was refusing to cooperate and there had been no follow up from the defendant. The first person on the scene gave a statement to the claimant in which she expressed surprise that the defendant had served a summary without contacting her. It was plain that she had not received the defendant’s letter and it was impossible to conclude that she would not have assisted. At most it might appear that she was inclined to cooperate with the claimant, but that did not rule

permission to rely on the summaries under CPR 32.9.

out cooperation with the defendant.

The claimant appealed and submitted that the summaries

On a proper and detailed analysis the Master should have

should be excluded as witnesses should not be called where their evidence was not known, leaving the parties unable to prepare for trial or to deal with interlocutory matters such as settlement.

Allowing the appeal in part, the High Court judge held that the Master’s decision had been given in the context of a busy case management list and the reliance on witness summaries was one of a number of matters which had beenraised.

The Master had dealt with the issue very briefly after the defendant’s submissions and the claimant had been given little opportunity to respond. The Master did not give his reasons so it was not possible to be satisfied that he had taken all relevant 33

concluded that he was not satisfied that the defendant had been unable to obtain statements from three of the four witnesses.

Where CPR 32.9 was not satisfied, permission to adduce the witness summaries was refused. The defendant could take further steps to elicit responses, but statements obtained at the instant stage of the process would be substantially out of time for service due to the defendant’s decision to not follow-up three responses to requests for assistance.

Expert Witness Rowley v Dunlop and others [Lawtel 17/06/2014] From Issue 23 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

criticised for giving an unqualified declaration when he knew of his connection with the owner of the firm and the firm itself.

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 of the CMC was insufficient to show that the expert had a financial interest in the proceedings.

It was clear that he was connected to the owner of his firm and therefore arguably to the CMC, but the risk of any conscious or unconscious bias should be explored in cross-examination at trial.

The issue went to weight rather than admissibility. The report was

the owner of the firm owed director’s duties to the CMC, the

not inadmissible on the conflict ground.

expert did not owe it any duty and there was no evidence that the

The claimant’s criticisms had some force. It was clearly incumbent

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

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.

provide evidence as to the expert’s connections with the CMC meant that the court was entitled to infer that there might be a greater degree of involvement than that which had been disclosed, such as possible interests in the CMC’s shares or payments made out of sums recovered by the claimants; (2) the expert was to be 34

Disputing jurisdiction Nwoko v Oyo State of Nigeria and another [Lawtel 2/07/2014] From issue 025 Although it is a commercial case Nwoko v Oyo State of Nigeria and another [Lawtel 2/07/2014] is an important reminder to defendants about the operation of CPR 11. That relevant part of that rule states: 1. A defendant who wishes to – (a) dispute the court’s jurisdiction to try the claim; or

service had been effected by 1 July 2011 and that the relevant time limit for filing the acknowledgment of service was two months and 21 days thereafter. An acknowledgement of service in the standard form was filed on the defendant’s behalf stating an intention to dispute the court’s jurisdiction on forum non conveniens grounds. The application was not made within 14 days as required by CPR 11(4). On 22 May 2014 the claimant made the instant application for a retrospective order extending the time for service of the claim form.

Opposing the application, the defendants submitted that it was too late for a retrospective order extending time to serve the

(b) argue that the court should not exercise its jurisdiction may

claim form and that it was contrary to justice if such an extension

apply to the court for an order declaring that it has no such

was granted as that would inadvertently extend time. They argued

jurisdiction or should not exercise any jurisdiction which it may

that they should be allowed extra time to serve notice disputing

have.

the court’s jurisdiction.

2. A defendant who wishes to make such an application must first

Allowing the application, the High Court judge held that the claim

file an acknowledgment of service in accordance with Part 10.

form had not been served within the period specified by CPR11(4)

3. A defendant who files an acknowledgment of service does not, by doing so, lose any right that he may have to dispute the court’s jurisdiction.

but that did not mean that it was a nullity or invalid. Although, when the acknowledgment of service was filed the claim form had not been served within the specified time, the filing was not void or invalid, as CPR11(5) had been engaged and the defendants

4. An application under this rule must –

were to be treated as having accepted the court’s jurisdiction.

(a) be made within 14 days after filing an acknowledgment of

There would be no prejudice to them if the claim was allowed to

service; and

go forward.

(b) be supported by evidence.

In exercising its discretion the court had to look at all the

5. If the defendant – (a) files an acknowledgment of service; and (b) does not make such an application within the period specified

circumstances. Even though the claimant had delayed by serving the claim form late, the defendants should have made their application disputing the court’s jurisdiction in time and that delay should be the main focus in exercising the court’s discretion.

in paragraph (4), he is to be treated as having accepted that the court has jurisdiction to try the claim.

In this case the claim form was issued on 28 July 2010. The time for service of the claim form outside the jurisdiction was

Allocation Akhtar v Boland (2014) EWCA Civ 872

six months from the date of issue of the claim pursuant to CPR

From issue 025

7.5. The claimant tried to serve out of the jurisdiction by courier

In so far as it is relevant to the next report, CPR 26.8 states:

which proved difficult. He accepted that the claim form had not been served within the time specified in the rules and that no application had been made to extend time for service. The defendants accepted service and it was acknowledged that

35

1. When deciding the track for a claim, the matters to which the court shall have regard include – (a) the financial value, if any, of the claim;

2. It is for the court to assess the financial value of a claim and in

CPR PD 26A – 7.4(2). It followed from those provisions that if, in

doing so it will disregard –

relation to a claim the value of which was above the small claims

(a) any amount not in dispute; (b) any claim for interest; (c) costs; and (d) any contributory negligence.

In Akhtar v Boland (2014) EWCA Civ 872 the appellant/ claimant, who had been involved in a road traffic accident with the respondent/defendant, claimed damages totalling £6,392.80 in his particulars of claim. In his defence, the defendant admitted damages amounting to £2,496 and the claim was allocated to the small claims track. The claimant applied for the allocation of the claim to be changed to the fast track. That application was refused on the basis that the partial admission of a distinct head

track limit of £10,000, a defendant made, before allocation, an admission that reduced the amount in dispute to a figure below £10,000, the normal track for the claim would be the small claims track. In the circumstances in which the claimant had obtained judgment for £2,496 and the sum remaining in dispute was under £5000, the district judge had been entitled to allocate the claim to the small claims track.

It followed from CPR PD 44.15.1(3)(iv) under which on entering judgment for the admitted part before allocation of the balance of the claim a court could allow costs in respect of proceedings down to that date, that the district judge ought not to have ordered that the claimant to pay the defendant’s costs of the appeal. Accordingly, the costs order was set side.

of claim constituted a reduction in the amount of the dispute, with the consequence that the appropriate track was the small claims track. Judgment was entered in the claimant’s favour for the full amount of the admission. The claimant did not apply to

Symes v St George’s Healthcare NHS Trust (2014) EWHC 2505 (QB) From issue 029

set aside that judgment, but unsuccessfully appealed against the

A procedural complication which arises from time to time was

allocation decision. A district judge rejected his argument that

dealt with in the case of Symes v St George’s Healthcare NHS Trust

the defence was no more than an offer to pay £2,496 and was

(2014) EWHC 2505 (QB).

not an admission that the claimant was entitled to that sum. The claimant was ordered to pay the defendant’s costs of that appeal.

The claimant had been referred to a consultant working for the defendant trust because of a lump on his face. The consultant

The claimant appealed, the central issue being what was meant

reported that it was a pleomorphic adenoma but in fact it was a

by “the financial value ... of the claim” in CPR 26.8(1) (a) and “any

malignant tumour. The claimant complained that the consultant

amount not in dispute” in CPR 26.8(2)(a) in deciding which track

had failed to advise him that his lump was suspicious of malignancy,

to allocate a claim to.

and failed to arrange for an urgent superficial parotidectomy to be

Allowing the appeal in part, the Court of Appeal held that it was clear that the district judge had interpreted the defence as including an unqualified admission that the claimant was entitled to £2,496 and entered judgment for that sum. As judgment had been obtained and there had been no application to set it aside, CPR 26 fell to be considered in determining whether to allocate a claim to the normal track; under CPR 26.8(1)(a) the financial value of the claim was to be determined disregarding any sum not in dispute: CPR 26.8(2)(a). Once the court had determined that the defendant accepted that the claimant was entitled to judgment in the sum of £2,496, the only sum in dispute was the balance of the claim, which was less than £5,000; that was confirmed by

carried out within two weeks. He contended that those failures had resulted in metastasis of the tumour to the lungs and invasion of the facial nerve, which were diagnosed four months later, at which point he had the required surgery. Before proceedings were issued, the defendant admitted that the consultant’s report had been wrong and that the parotidectomy should have been carried out within two weeks of the consultant seeing him rather than four months later. However, it denied that the delay had affected the nature or extent of the claimant’s surgery or post-operative treatment, or his subsequent development of lung cancer or life expectancy. The claimant issued proceedings, and relied on the defendant’s admissions. The defendant did not serve a defence or 36

acknowledge service and the court ordered judgment in default.

had suffered at least some of the damage that he had alleged in

Following agreed directions, the claimant served a schedule

the particulars of claim. Therefore, the default judgment should

of losses and the defendant served a counter-schedule which

be regarded as having determined merely that there was some

accepted that the delay in the claimant having the surgery caused

damage. The Master was incorrect and therefore CPR 52.11(3)(a)

him pain and discomfort, but disputed the other consequences of

applied.

the delay as claimed. The Master held that it had been contrary to the overriding objective for the defendant to allow judgment to be entered against it and then to serve a counter-schedule that addressed allegations of causation that should properly have been addressed within a defence that should have been served weeks earlier, and he struck out those parts of the counter-schedule that were inconsistent with the particulars of claim.

Although the situation that had arisen was regrettable and should be avoided, the Master had been wrong to hold that the defendant had acted in breach of the CPR and contrary to the overriding objective. The CPR did not preclude a defendant from contesting issues of causation in the context of an assessment of damages hearing after a default judgment on liability had been obtained.

The defendant had not been obliged to serve a defence setting

The defendant appealed and submitted that, applying Lunnun

out its case on causation, and the Master should not have criticised

(1999), the default judgment should be regarded as having

it for the way in which it had acted. CPR 16.5 and CPR PD 16 - 12.1

established nothing more than that it had acted negligently and

would come into play only if it was necessary or obligatory for a

that as a result the claimant had suffered some, but not specific,

defendant to serve a defence, which was not so in this defendant’s

loss and damage; it was inappropriate to regard it as having already

case. However, it would have been better if it had served a

been determined, by dint of the default judgment, that the

defence, and then it would have been apparent to the Master that

defendant was liable to the claimant for the losses claimed since

it was advancing a causation case. The claimant’s solicitors knew

that presupposed a causation determination which the default

all along that the defendant intended to run a causation case, so

judgment did not entail.

its counter-schedule was not some sort of ambush; the defendant

Allowing the appeal, the High Court judge held that the defendant’s

had not acted contrary to the overriding objective.

position was correct, and any other conclusion would be contrary to authority. The starting point was the particulars of claim, which were to be regarded as a proxy for the default judgment, in order

Application for inspection of property

to work out what that judgment had decided. That approach was

McLennan Architects Ltd v Jones

consistent with the need to scrutinise a default judgment with

From issue 31

extreme particularity so as to ascertain the bare essence of what it must necessarily have decided. The court, like the Master, was bound to follow the approach in the authorities, including Lunnun, which remained good authorities post-CPR. No authority had been cited that held that a defendant could not challenge causation in

In the case of McLennan Architects Ltd v Jones and another (2014) EWHC 2604 (TCC) the claimants applied for an order granting access for its IT expert to examine a computer belonging to the defendants.

the face of a default judgment where damages had been ordered

During the course of his judgment the High Court judge set out a

to be assessed. As the claimant recognised, in the assessment

(non-exhaustive) list of factors to be taken into account (see below)

of damages phase of proceedings it was open to a defendant to

when a court is considering an application under CPR 25.1(c)(ii)

advance arguments that the claimant should not be permitted to

for the inspection of relevant property. Similar considerations will

recover to the extent of the amounts claimed. A defendant had

probably apply when a pre- action application for inspection is

to recognise that “some damage” had been caused, but did not

made under CPR 25.5. Factors a) and b) are of general application

have to accept that the actual damage alleged by the claimant in

and would be relevant, for example, to an application to inspect

his statement of case had been caused by the alleged breach of

a vehicle. The other factors must be considered in the context

duty. In any event, the defendant had accepted that the claimant

of the e-disclosure of documents held on an electronic device

37

but would apply, for example, to an application to ‘interrogate’ a

action commenced by the claimant/respondent. The defendant

mobile telephone or a laptop.

explained that it had not attended the directions hearing as

The judge said that it is primarily to the overriding objective to which one must look as to the basis on which to exercise the discretion to make this type of order. The factors which might properly legitimately be taken into account: (a) The scope of the investigation must be proportionate. (b) The scope of the investigation must be limited to what is reasonably necessary in the context of the case. (c) Regard should be had to the likely contents (in general) of the device to be sought so that any search authorised should exclude any possible disclosure of privileged documents and also of confidential documents which have nothing to do with a case in question. (d) Regard should also be had to the human rights of people whose information is on the device and, in particular, where such information has nothing or little to do with the case in question.

the counsel that it had originally briefed was not available, no other counsel was available and that the terms of the original retainer did not permit the instruction of other solicitors. On the morning of the hearing, the defendant complained that a representative had had travel problems which had prevented him from attending. Orders in relation to, amongst others, the service of witness statements by 1 August 2014, were made in the defendant’s absence. At the time of the instant hearing, the witness statements had still not been served. The issue was whether the orders should be set aside and replaced with revised directions for the service of witness statements and expert evidence. It was common ground the trial date would not be affected.

The defendant applied under CPR 23.11 to set aside the directions and submitted that it had not served witness statements as it had had difficulty in obtaining instructions where the relevant individual had been on holiday, and that it had been waiting on

(e) It would be a rare case in which it would be appropriate for

a response to a request for further information before preparing

there to be access allowed by way of taking a complete copy

the witness statements.

of the hard drive of a computer which is not dedicated to the contract or project to which the particular case relates.

Allowing the application, the deputy High Court Judge held that if the terms of the retainer did not permit the instruction

(f) Usually, if an application such as this is allowed, it will be

of other solicitors they were unwise; although the defendant

desirable for the court to require confidentiality undertakings from

was fortunate to be represented by counsel in the instant

any expert or other person who is given access.

proceedings, the explanation for not instructing counsel originally was wholly unsatisfactory. Counsel were always available for a commercial case. Although the court had extended an

Relief from sanctions

invitation to the defendant’s solicitors to attend the hearing

Carlton Advisory Services v Dorchester Holdings Ltd

without counsel, that opportunity had been declined as the

From Issue 32

solicitor/representative who had not attended the first hearing had prioritised other professional commitments. The court was

Although it is a commercial case, Carlton Advisory Services v

fortunate in the sense that once those commitments had fallen

Dorchester Holdings Ltd and others [Lawtel 2/09/2014] seems to

away, the representative had turned his mind to attending the

illustrate a significant softening of a court’s approach to default.

hearing; his factual statements in relation to travel problems on

The case shows a return to the principle of achieving justice

the morning of the hearing were undisputed. The defendant’s

between the parties, although the fact that the trial date would

solicitors were obliged to explain why they had not engaged with

not be affected was a factor that worked in the applicant’s favour.

the proceedings and filed evidence. That instructions could not

The defendant/applicant had failed to attend a pre-trial directions hearing in relation to the filing of evidence in an

be obtained as the relevant individual had been on holiday was no justification for what had happened: it was the duty of clients to make themselves available for instructions and for solicitors 38

to make that clear to their clients. There was some evidence

be awarded against it if it failed to fulfil specified obligations,

that the defendant had been waiting on a response to a request

with the local authority being able to terminate the contract if

for further information but there was also strong evidence the

250 service points were accumulated within a specified period.

other way; even if that submission were well-founded, it faced

There was a term requiring mutual co-operation and good faith.

the difficulty that there was no justification for a party to decide

A review after eight years of the contract indicated that the

not to comply with a court order because a request for further

applicant’s performance had been good. A further two years

information had not been answered. Rather, that party ought

later, the local authority sought to renegotiate the contract

to apply for a variation to the court order, which the defendant

following budgetary constraints, but no agreement was reached.

failed to do.

The applicant claimed that the local authority had thereafter

Given the terms of the order, the court would have been fully justified in refusing the defendant relief, but for the court’s power to make an order against a party to secure costs, which had to be exercised cautiously. The defendant had clearly failed to comply with the over-riding objective; where there had been a flouting of a court order, the court had jurisdiction. It appeared as though the defendant had not been serious about defending the case; if the court were wrong about that, it was the defendant’s fault for having conducted the case as they had. Relief was granted on condition that the defendant comply with the time limits the claimant advanced in relation to pre-trial directions; all existing costs orders, including the costs of the instant proceedings, were paid within 14 days; and the defendant deposited £25,000 in court as a reassurance that the claimant would not have its costs wasted in preparation for trial.

sought to accumulate service points against it so as to be able to terminate the contract, and relied upon an email from a local authority employee which stated that it had to have 250 by a certain date. At the instant hearing the evidence was that the 250 point threshold had either been reached or was very close. An independent adjudicator was to decide the issue of whether the local authority had acted in accordance with the contract in applying service points in the manner in which it had. The applicant sought disclosure of documents that would result from a local authority search, using specified keywords, of electronic documents held by certain local authority employees who had been involved in the matter, and all documents after a specified date relating to the local authority’s approach to monitoring performance. Shortly before the instant hearing, the local authority had offered disclosure of 150 documents that it had identified by searching the terms, “250”, “target” and “termination”, but maintained that it was not obliged to provide

Pre-action disclosure Ensign Highways Ltd v Portsmouth City Council From Issue 32 Although applications for pre-action disclosure are relatively common, reported cases on the subject are less so. The case is also relevant to the topic of ‘e-disclosure’.

In Ensign Highways Ltd v Portsmouth City Council [Lawtel 10/09/2014] the applicant company applied for pre-action disclosure in its contractual dispute with the respondent local authority. The applicant and the local authority had entered

disclosure. Those documents were not provided in advance of the hearing. The issues were (i) whether there should be pre-action disclosure under CPR 31.16; (ii) the extent of the disclosure.

That rule states that if an application for pre-action disclosure is to succeed the applicant must show that: (a) The respondent is likely to be a party to subsequent proceedings; (b) The applicant is also likely to be a party to those proceedings; (c) If proceedings had started, the respondent’s duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks

a private finance initiative agreement under which the applicant

disclosure; and

was to upgrade and maintain highways in and around Portsmouth

(d) Disclosure before proceedings have started is desirable in order

over a 15 year period. The contractual system of monitoring the applicant’s performance provided that service points would 39

to – (i) Dispose fairly of the anticipated proceedings;

(ii) Assist the dispute to be resolved without proceedings or (iii) Save costs.

Allowing the application the High Court judge held that there was no real dispute that in subsequent proceedings the applicant and the local authority were likely to be parties. It seemed that, had the proceedings already started, the documents sought went to the issue of whether the local authority had properly applied the criteria for awarding service points, so that standard disclosure would have been given. It was very likely that preaction disclosure would allow the anticipated proceedings to be disposed of more fairly, or avoid the need for proceedings, and that there would be cost savings. The criteria in CPR 31.16 were made out.

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 as a result of the fire that was potentially compensatable by those who designed, manufactured or maintained the forklift truck, and could properly bring proceedings in respect of it. Since the defendant had undertaken

Pre-action disclosure Jet Airways (India) Ltd and another v Barloworld Handling Ltd From issue 36 In the predecessor to this periodical, Greenwoods’ Alert370, we reported the first instance decision in Jet Airways (India) Ltd and another v Barloworld Handling Ltd. The case has now been before the Court of Appeal and is reported at (2014) EWCA Civ 1311.

some, if not all, routine maintenance of the vehicle, it was likely that 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. Pre- action 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.

A cargo handling depot had been destroyed by fire. The claimants

Although the evidence pointing to failures in maintenance of

were the owners of, or otherwise interested in, the building and

one kind or another was far from conclusive, there was sufficient

its contents. Investigations into the cause of the fire concluded

evidence before the judge to justify his conclusion that the case

that it had started in a forklift truck. The trucks were supplied by

was not merely speculative. The defendant had not identified

an associated company of the defendant and it had entered into

any factors which the judge had failed properly to take into

an agreement to maintain them. The claimants applied for pre-

account when making his decision. There were no grounds for

action disclosure from the defendant under CPR 31.16 of various documents relating to the maintenance of the trucks for the two

saying that he erred in the exercise of his discretion to make an order for disclosure or in the scope of the order made.

years before the fire. The defendant opposed the application as speculative. The judge considered that in order for the court to have jurisdiction to order pre-action disclosure an applicant had to show a prima facie case that was more than speculative. The claimants satisfied that test and the judge exercised his discretion

Case management post Denton Doctors Associates Inc v Hussain [Lawtel 16/09/2014]

in favour of making an order. A subsequent Court of Appeal

From Issue 33

case confirmed that CPR 31.16(3) did not impose an arguability

In Doctors Associates Inc v Hussain [Lawtel 16/09/2014] the

threshold.

The defendant appealed and submitted that the claimants’ case

applicant/defendant applied to set aside a default judgment ordered against him in infringement and passing off proceedings

against it was highly speculative, and that it was unlikely that after 40

brought by the respondent/claimant fast-food outlet owner

set aside to the extent that he would have permission to defend

against the defendant and two others.

the claim, subject to his paying

The claimant owned the goodwill in the mark, “SUBWAY” and

£20,000 into court within 14 days, or providing a bank guarantee

sold sandwiches and similar foods. It claimed that the defendant

or other suitable protection in respect of the claimant’s costs.

had used that mark on a sign on a snack food outlet since early April 2013. Default judgment was entered against the defendants and, in respect of the applicant/defendant, on the basis that he had not served an acknowledgement of service or defence.

He stated that he had not known about the claimant’s complaint

Comment In the bleak months between Mitchell and Denton is it likely that a court would have adopted a similar approach to the defendant’s default? We think not.

until after the order was made. He had originally stated that he had granted a lease to his co-defendant which commenced in March 2013 and that he could not be liable as the outlet had

Thwaytes v Sothebys [Lawtel 18/09/2014]

been under the co-defendant’s control at the relevant times. The

In Thwaytes v Sothebys [Lawtel 18/09/2014] the applicant/

co-defendant, however, stated that he had not acquired the

defendant auction house applied for permission to rely on an

lease until May 2014. The defendant then changed his position,

additional expert report in a breach of contract claim brought

admitting responsibility for all acts complained of, stating that

by the respondent/ claimant. The claimant had owned a

he had taken the lease in March 2013 and that the claimant was

painting known as ‘The Cardsharps’. The original was painted by

wasting its time in pursuing him as he had no money. He sought

Caravaggio and was generally accepted to be a work acquired by

to set aside the order on the basis that he had reasonable

an art museum in Texas, although Caravaggio might have painted

grounds for defending the claim. The claimant adduced evidence

more than one version. The claimant instructed the defendant

that the defendant owned the premises and had purchased it two

to research and sell his painting. The defendant considered it to

years earlier at a price of £45,000, free of mortgage.

be an anonymous 17th century copy and sold it to a British art

Opposing the application, the claimant submitted that the defendant’s position lacked all credibility as he had concocted a new version of events with the co-defendant so that his defence had no real prospect of success. Alternatively, if the order were to be varied, the court should attach a condition under CPR 13.3(2) that the defendant should pay £20,000 into court.

The court allowed the application. The defence advanced and the circumstances in which it had emerged lacked a great deal of credibility. However, bearing in mind that the defendant and his co-defendant had asserted the truth of parts of that defence, it could not be said that the defendant’s defence should be dismissed without him having an opportunity to present it.

There were various documentary matters that would also need to be considered, such as the lease and any licence agreements.

The defence was very close to the borderline point at which the court would have refused to set aside the earlier order. In those circumstances, the defendant should provide some safeguard as to costs. It appeared that he had an asset. The order would be 41

historian for £42,000. The defendant then alleged that scholarly opinion suggested that his version was also a Caravaggio and could have been worth up to £50 million. He claimed breach of contract on the basis of negligent advice. The defendant maintained that the painting had been rejected as a Caravaggio by a wide range of scholars. At a case management conference the claimant was permitted to rely on the evidence of two experts and the defendant was permitted to rely on one. Reports were exchanged and the defendant discovered that the claimant’s experts had raised a large number of matters which had not been pleaded and which had not been addressed by its expert. The claimant’s particulars of claim were amended by consent on condition that the defendant could adduce supplemental witness statements. The defendant served statements from its existing expert and also from a second expert who dealt with the more technical viewpoints in respect of the similarities and differences between the original and sold paintings which were beyond the scope of its existing expert’s knowledge. At a pre-trial review six weeks before the trial date the defendant applied to be allowed to rely on the second expert’s evidence.

Thomas v Baker and another [Lawtel 29/09/2015]

Comment

From Issue 34

Would this application have been dealt with any differently post

Thomas v Baker and another [Lawtel 29/09/2015] concerned an application to adjourn a trial one-week before it was due to start.

The claimant/applicant applied for permission to amend her particulars of claim and to adduce new expert evidence in her personal injury claim against the second defendant/ respondent insurance company.

The claimant had been seriously injured in a road traffic accident over four years earlier and had been rendered paraplegic. A trial date had been set for slightly more than a week after this

Mitchell, pre Denton? It is possible that the judge could have been more concerned with the impact on court resources of vacating a trial so close to the fixed date. Could other work be assigned to the judge in the short time available? He may also have been less concerned with fairness between the parties which Denton has reemphasised. However, the serious nature of the medical issue which had arisen and the fact that the claimant could not have anticipated it probably means that the same order would have been made.

application. A new issue had recently arisen in relation to the propensity of one of her hips to dislocate. The condition was rare and one which the experts had not foreseen. The current value of the claim was £8.5m. The hip displacement issue could have resulted in an award of a further 20 years of 24-hour care, at an estimated cost of £2m. A number of medical approaches to the issue were open to the claimant and she was due to meet with a surgeon who would advise her. One of second defendant’s key medical experts was out of the country until very shortly before the trial.

The second defendant contended that the claimant’s application placed it in a very difficult position in respect of understanding the case to be met, preparing expert reports in response to new

Civil procedure rules From Issue 34 1 October sees the introduction of the next stage of the government’s attack on whiplash (soft tissue injury) claims with amendment to CPR. The principal intention of the changes is to impose further control over medical evidence in cases brought under the RTA portal. Stage 2 of the protocol cannot be engaged unless the claimant has obtained a fixed costs medical report at a fee of £180. Any further medical evidence (for which the claimant requires justification) is also restricted to specified disciplines, at prescribed fixed fees, namely:

evidence and assessing the impact of the new issue on the case

£420 for a consultant orthopaedic surgeon

and its value. The second defendant further submitted that the

£360 for a consultant in A&E medicine

application should only be granted if the trial was adjourned.

The High Court judge held that no fault was attributable to either party in relation to the lateness of the issue arising. It would clearly

£180 for a GP £180 for a physiotherapist

have a very significant impact on the claim and, in order to do

£30 plus the direct cost to the holder of the medical records to

fairness to the parties, it was inevitable that the trial date would

obtain medical records limited to £80 in total for each set of

be vacated. It would have been unfair not to give the second

records required

defendant an adequate opportunity to consider and respond to such a significant issue. It would be equally unfair for the court not to have the benefit of the clearest possible expert evidence.

Addendum reports (save for consultant orthopaedic surgeons) are limited to £50

The unavailability of the second defendant’s expert witness was

Part 35 answers are limited to £80

unfortunate, but there was not enough time and the trial was

The claimant will be justified in obtaining a second report only

adjourned. The claimant was permitted to amend her particulars of claim, adduce further evidence and amend the schedules of loss. The second defendant was given liberty to serve evidence in response.

where the first fixed fee report has been sent to the defendant and recommends a supplementary report from the first expert or a further medical expert’s report.

42

If considered necessary, but only with the defendant’s authority,

batch of documents were passed on to its lawyers in England,

the insurer may now send, with the response to the CNF, the

though his third witness statement said that English lawyers had

defendant’s account of the accident. The medical expert is

been involved at an early stage. The claimant sought unredacted

then invited to consider alternative diagnoses and prognoses

versions of all documents and price-sensitive forward-looking

depending on which version of the accident is found to be true.

statements, which had been deemed confidential by the

The expert must not have been involved in or in any way become

defendant. The day before the instant hearing, the defendant

involved in the claimant’s treatment.

applied to vary the disclosure so as to refer specifically to material

Pre-med offers have not been outlawed completely but the rules now make it clear that any such offer will have no costs consequences until 21 days after the defendant has been sent a copy of the fixed fee medical report.

These changes apply to cases where the CNF is submitted on or after 1 October 2014.

relevant to the issues. At the instant hearing, the defendant explained other material had been redacted to comply with Swedish law.

We report only that part of the High Court judge’s judgment that is relevant to the issue of redaction and provides a basis for requiring claimant lawyers to justify why documents have been redacted. Where documents were redacted it was important to understand the basis for it and for the disclosing party to provide

Disclosure Decura IM Investments LLP v UBS G London Branch [Lawtel 8/10/2014] From issue 35 It is relatively common for claimants’ solicitors to serve documents

an explanation. If the redacted information was not relevant, that was relatively straightforward. If it is asserted that the information was relevant but contained confidential material, or would breach foreign laws, it was incumbent upon the party to explain that so that disclosure could properly take place. It was unsatisfactory that that had not happened.

(particularly case managers’ notes) that have been redacted. The commercial case of Decura IM Investments LLP v UBS G London Branch [Lawtel 8/10/2014] is therefore of wider interest.

The claimant/applicant company applied for further disclosure in its claim against the defendant/respondent company. The

Disclosure Tchenguiz and others v Director of the Serious Fraud Office (2014) EWHC 1102 (Comm)

defendant applied to vary the existing disclosure order.

From Issue 016

The underlying issue in the substantive claim was whether the

In Tchenguiz and others v Director of the Serious Fraud Office

defendant had ceased to carry on a specified material part of its business during a particular period. At a previous hearing, the claimant’s submissions that the matter was very urgent and

(2014) EWHC 1102 (Comm) the claimants applied for permission to use certain documents which were said to be subject to public interest immunity and legal professional privilege in judicial

required an expedited trial were accepted on the basis that the

review proceedings relating to the collapse of the Icelandic banks.

issues were narrow and that disclosure would not be onerous. A

CPR 31.20 states: “Where a party inadvertently allows a

disclosure order was made, specifying categories of documents

privileged document to be inspected, the party who has inspected

in a schedule. The defendant provided disclosure but many

the document may use it or its contents only with the permission

documents were redacted. It claimed that it had redacted

of the court.”

irrelevant material. Some duplicate copies were inconsistently redacted. The defendant’s solicitor provided witness statements setting out that the defendant’s internal legal team in Switzerland had carried out the initial disclosure search before a 43

The documents in question consisted of (i) an Intelligence Unit briefing note, which made no reference to legal advice in its title, had been redacted in places, and had been disclosed by a legally

qualified employee of one of the claimants; (ii) a report; (iii) two

The statement in Al-Fayed that the same principles applied

emails between the defendant (SFO) and the Treasury Solicitor;

to public interest immunity as to legal professional privilege

and (iv) a PowerPoint presentation prepared by the Icelandic

represented a correct statement of the law. Nevertheless, those

Government, in respect of which a public interest certificate had

principles recognised that the court was exercising an equitable

been issued. The SFO claimed public interest immunity in respect

jurisdiction and that there were no rigid rules. That was equally

of the latter document, and legal advice privilege and litigation

true of the position under the CPR 31.20. The fact that a public

privilege in respect of the others. All of the documents had been

interest certificate had been issued in respect of the PowerPoint

disclosed inadvertently; therefore, the position was governed by

presentation was a very potent and relevant matter to consider.

CPR 31.20. It was common ground that the relevant guidelines

It was not the case that, absent obvious mistake, the court

were those set out by Clarke L.J. in Al Fayed (2002). Since it

would be bound to grant permission to use the documents; any

was not a case where the receiving party in fact realised that

such conclusion would be contrary to the Al-Fayed principles.

a mistake had been made, the issue was whether the mistake

Since the court had not been invited to consider whether the

would have been obvious to a reasonable solicitor in the position

public interest immunity was properly claimed, or should be

of the reviewer.

overridden having regard to the private interests of the parties,

Refusing the application the High Court judge held that although the claimants were entitled to rely on the SFO’s legal team to conduct the disclosure process review properly, given the scale and complexity of that disclosure review it could not be regarded as infallible. It was almost inevitable that some mistakes

the public interest certificate had to be taken at face value and given effect, without deciding whether the instant case was one of “obvious mistake”. Accordingly, the SFO was granted the relief sought and the discretion under CPR 31.20 was not exercised in the claimants’ favour.

might occur. The SFO could not be taken as waiving its rights in documents which might be inadvertently disclosed. Moreover, there were specific matters in the body of the briefing note which indicated that there had been an obvious mistake in relation to its disclosure. It was not similar in any relevant sense to other documents which had been disclosed and in respect of

Shepherd v Fox Williams LLP and others (2014) EWHC 1224 (QB) In the second case, Shepherd v Fox Williams LLP and others (2014) EWHC 1224 (QB) the applicant/claimant applied for summary judgment in his claim for delivery up, and/or destruction of,

which no privilege had been claimed.

certain documents against the respondent/ defendants.

From the contents of the report, it was clear that it had been

The claimant’s partner was a former employee of the second

produced for the dominant purpose of the judicial review, and it would have been obvious to a reasonable solicitor, in the position of the legally qualified employee who reviewed it, that a mistake had been made by its disclosure.

The subject line of the emails and their contents made it clear that the Treasury Solicitor was seeking instructions about an application being made in the context of the judicial review proceedings. It was therefore plain from the face of those emails that they were created for the dominant purpose of such an application. It followed that they attracted litigation privilege, and that that would have been obvious to a reasonable solicitor in the position of the claimants’ solicitors.

respondent. The partner had brought employment tribunal proceedings against the second respondent. The first respondent solicitors’ firm acted for the second respondent in those proceedings and gave disclosure of several documents which related directly to the claimant’s personal affairs, including documents relating to his divorce and financial position. The second respondent, in response to the claimant’s request to explain how it had obtained those documents, said that they had been lawfully obtained during an examination of its own computer system. It was common ground at the instant hearing that the documents had been on the second respondent’s server, having been stored there as a result of the claimant’s partner viewing or opening them on her work computer during her employment with the second respondent after the claimant had emailed them to her.

44

The claimant submitted that the documents were all subject to

documents were privileged, highly confidential and contained

legal advice and litigation privilege, without prejudice and highly

sensitive personal data, and she had not realised that they

confidential. He argued that, having sent them to his partner’s

would be stored on the server as a result of her actions. Further,

personal email address and not to her work email address, he

there was no evidence that the claimant had been aware of the

had not waived his privilege in them. The second respondent

second respondent’s electronic information policy and it was not

argued that it was likely that the claimant had emailed the

entitled to rely on that policy to argue that privilege had been

documents to his partner’s work email address and that in doing

waived. Accordingly, given the highly confidential nature of the

so he would, or should, have known that the second respondent

documents, the limited purpose for which they were forwarded

would have an electronic information policy in place meaning

to the claimant’s partner and the circumstances in which they

that his partner would have no expectation of privacy in relation

were communicated by the claimant to her (which carried

to the documents.

implied obligations of confidentiality), there was no arguable

Finding in favour of the claimant, the High Court judge held that there was no dispute that the claimant was entitled to assert privilege in respect of the relevant documents. In those circumstances the ultimate question was whether he had communicated the privileged documents to his partner in circumstances importing, expressly or impliedly, that she should treat them as confidential, in which case privilege was maintained; or whether the documents had been disclosed to her with no express or implied requirement, that they should be treated as confidential so that there had been a waiver, on a limited basis, of privilege. There was no evidence whatsoever to support the respondents’ assertion that the claimant, or his solicitors, had

basis for contending that the claimant had waived his privilege in the relevant documents, notwithstanding that they had been found on the second respondent’s computer system. In those circumstances, the claimant’s application to strike out was well founded.

Comment These cases clearly illustrate the care that is required when handling privileged documents, particularly those held in electronic format. It is not merely the content that must be kept in mind but also the consequences of sending the material electronically to a third party.

emailed the privileged documents to the partner’s work email address. Accordingly, there was no factual foundation for the respondents’ case based on waiver. Any proposition that by sending the documents to his partner’s personal email address, was to be treated as having waived his privilege in relation to her employer, went too far. It would have been contrary to the interests of the administration of justice if privilege was regarded as waived in such circumstances or treated as waived generally because a privileged document was disclosed for a limited purpose by a party who plainly did not contemplate doing anything which might cause his privilege to be lost. The

‘Without prejudice’ Avonwick Holdings Ltd v Webinvest Ltd and another [Lawtel 21/10/2014] From issue 37 When is marking a communication ‘without prejudice’ ineffective when later claiming that its contents were privileged? This was the issue in Avonwick Holdings Ltd v Webinvest Ltd and another [Lawtel 21/10/2014].

fact that the claimant might not be able to assert privilege

The respondent/claimant company had made a loan of $100m to

against his partner did not mean that he should be taken to have

the appellant/first defendant, a company controlled by the second

waived privilege more generally or in relation to the respondents

defendant, to enable the first defendant to make a loan to another

specifically. There was no evidence that the claimant had asked

company. The first defendant’s obligations were guaranteed

his partner to forward the documents to her work email address

by the second defendant. The first defendant defaulted and

or to copy them to her employer’s server; he had merely asked

proposed a rescheduling. The claimant did not agree to the

her to review and comment on them. She was aware that the

proposed terms and required the provision of security. The

45

claimant then demanded repayment from the defendants, who

but indicated that the lender’s rights were being reserved in

alleged a collateral oral agreement that the first defendant’s

relation to the proposed rescheduling. Therefore the documents

obligation to repay was conditional on it being repaid in full

were admissible.

by the third party company. That company had also defaulted and the first defendant had commenced arbitration proceedings against it which had been settled. Disclosure had been ordered of correspondence leading up to the settlement agreement between the first defendant and the third party company; it was accepted that the settlement itself was disclosable. The judge held that the second defendant had waived privilege in certain documents. The appellants appealed against that decision. A second judge directed that correspondence leading up to the unsuccessful rescheduling, which was marked “Without prejudice and subject to contract”, should be admissible. He found that the correspondence was not covered by the “without prejudice”

The appeal against the decision of the first judge was allowed only in relation to the finding that the second defendant had waived privilege. It was doubtful whether the words relied on amounted to a waiver. They were only to the effect that an offer to settle had been received and his lawyers had advised that it was a good one. In any event the privilege was not the second defendant’s to waive. The third party had not consented to waiver. The claimant argued that it was not relying on the documents as admissions. The reasonableness of the settlement was in issue and the general rule applied. The documents remained privileged even after the settlement.

privilege because there was at the relevant time no dispute about the first defendant’s liability under the loan or the second defendant’s liability under the guarantee. The appellants appealed on the without prejudice issue.

The Court of Appeal dismissed the appeal against the decision on the without prejudice issue. There were two bases for the operation of the without prejudice rule: public policy and contract. As a matter of public policy it was necessary for there to

Split trials Hornsby-Clifton v Ministry of Defence [Lawtel 18/11/2014] From issue 41 When is it appropriate to have separate trials of the issues of liability and quantum? That was what concerned the court in Hornsby-Clifton v Ministry of Defence [Lawtel 18/11/2014].

be a dispute in existence for the rule to operate, but the operation

The claimant’s claim related to alleged negligent treatment by the

of the rule could be limited or extended by agreement. The term

defendant’s medical service for the chronic fatigue syndrome that

“dispute” was of wide scope and could include the “opening

she developed in 2007. She had served in the army legal service

shot”. Whether there was a dispute had to be determined on

since 2000 and was prevented from working by her condition and

an objective basis. The judge was right that there had been no

medically discharged in 2012. The claimant alleged that she was

dispute in existence at the time of the correspondence in issue.

not properly treated during her service for that condition. She

Freedom of contract was a basic principle of English law and

argued that if she had been properly treated she would have been

the courts recognised the efficacy of clauses such as non-reliance,

able to continue working until 2016 when she would have various

confidentiality and entire agreement clauses. However, an

other career options open to her. Her case was that because of

agreement that documents could not be used in court proceedings

the defendant’s negligence all those options were now closed as

could not be unilaterally imposed. The argument that there was

she was unable to work in any capacity. The claim was substantial

such an agreement in the instant case was undermined by the

ranging from £2m to £4.4m. A trial date was set for February

fact that the documents were marked “subject to contract”

2015 with a seven-day time estimate and had been fixed for some

as well as “without prejudice”. The appellants said that that

time. The claimant wanted a split trial of liability and quantum

related only to the “heads of terms” put forward for the

as there was an outstanding issue in relation to a pension and

rescheduling. In the circumstances it was clear that the words

it was suggested that the trial might exceed its time estimate if

“without prejudice” were not intended to create an agreement

all the issues were dealt with at the same time. The defendant

that the documents would not be used in proceedings in court,

applied informally for permission to put in further witness 46

statements: one from a physiotherapist and the second from a

the MIB (the appellant) had conducted the defence. Liability

rehabilitation consultant who had treated the claimant, instead

had been admitted, subject to a deduction for contributory

of making a formal application to return to court within 14 days.

negligence. The only issue at trial had therefore been quantum.

The High Court judge held that there was no good reason for

Various experts had treated the claimant during the seven years

putting off the issue of quantum or for a split trial. There would

between the accident and the trial. They all gave evidence

be an overlap between causation issues and quantum. The

that he suffered from significant cognitive disabilities. Shortly

same trial judge would be in a better position having heard all

before the trial, the claimant had taken the UK Citizenship Test

the evidence to determine those issues. By and large the same

and passed it. The experts all agreed that it was surprising that

experts would deal with all the evidence relating to liability and

he had passed the test and that his having done so appeared to

quantum. Therefore, if the trial was split it would increase the

be inconsistent with his apparent level of cognitive disability. The

costs and court time if they had to be called again for quantum.

claimant claimed that he had passed the citizenship test with

If the claim succeeded there might not even be a quantum trial

“improper assistance”, the nature of which was not identified.

because the case might be compromised. It seemed that all the

However, the judge found that he had passed the test without

issues were overlapping and intermingled and should all be dealt

assistance, having learned answers by rote and having struck

with at the same time by the same trial judge. It would be a risk if

lucky in the questions that came up. He found that the claimant

there was a split trial on quantum as a different judge who would

lacked mental capacity and had no residual earning capacity.

not have had the advantage of seeing the witnesses on causation

Damages were assessed.

and negligence. It was not appropriate to split the trial and all the issues should be dealt with at the same time.

The MIB appealed and submitted that if the judge had attributed the correct weight to the citizenship test he would have found

The main difficulty with allowing the defendant’s supplementary

that the claimant had either been malingering or consciously

evidence was that those witness statements were still being

exaggerating and that he did not suffer from significant cognitive

prepared. While the court applauded the defendant in seeking to

deficits. He should have found that the claimant did not lack

save time and costs in making a separate application it was wrong

mental capacity and that the award of damages should be

to accede to it. In the absence of the statements it was not right

reduced accordingly.

to give permission currently and an application should be made in the proper form with the statements attached and an explanation of why they were relevant. The defendant needed to make a formal application within 14 days time.

Rejecting the appeal, the Court of Appeal held that on the evidence before him, the judge had been entitled to make the finding that the claimant had passed the citizenship test unaided.

The judge had been bound to take into account all the features of the evidence in the context of his finding that the claimant had

Mental capacity From Issue 37 Since the introduction of the Mental Capacity Act 2005 there has been a presumption in favour of a claimant having mental capacity. The case of Ali (Protected Party) v Caton and another (2014) EWCA Civ 1313 serves to illustrate how hard it is for a defendant to assert that a claimant has capacity, once that presumption has been displaced.

When he was seventeen, the claimant/respondent, suffered a severe brain injury in a road traffic accident caused by the first defendant’s negligence. The first defendant was uninsured and 47

somehow passed the citizenship test. He had been acutely aware of the need to factor the test success into the rest of the evidence.

To focus upon the citizenship test almost to the exclusion of anything else would not have been the correct approach.

There could be no doubt that the claimant had suffered a very severe brain injury. He was not a person who could have kept up a pretence of incapacity, capable of fooling so many people, for so long. The citizenship test had to be put into context with all of the other evidence. The judge had been entitled to conclude that the claimant lacked capacity, having regard to the sum total of the evidence, including the expert evidence and evidence from other quarters as to how he presented and functioned in his day-today life. The award of damages was upheld.

Capacity Dunhill (Protected Party) v Burgin (2014) UKSC 18.

Dismissing the appeals the Supreme Court held that capacity was to be judged in relation to the decision or activity in question and not globally. The wording of CPR 21.2(1) and 21.4(3)

From issue 011

suggested a focus on proceedings in general, rather than on “the

In earlier editions of Greenwoods’ Alert we followed the progress

proceedings” as framed. Furthermore, the requirement for a

of the next case from first instance through to the Court of Appeal.

Dunhill (Protected Party) v Burgin has now been to the Supreme Court and is reported at (2014) UKSC18.

The claimant/respondent had suffered a severe head injury when she was knocked over by the appellant/defendant’s vehicle in 1999. At the start of the trial on liability in January

litigation friend applied from the very start of the proceedings, and CPR 21.10(2) applied to claims settled before proceedings had begun. An action might take twists and turns, but CPR 21 assumed that there would always be somebody with mental capacity conducting it. The proper test of capacity was whether the party could conduct the claim which they actually had, rather than the claim as formulated by their lawyers. The quality of the

2003, the claim was compromised for £12,500. A consent order

legal advice received had no bearing on the test. It was clear that

was placed before the court. On any view, the settlement

the claimant had not had capacity to conduct her claim.

represented a gross undervaluation of the claim. In 2006, the claimant took fresh legal advice. In 2009 her litigation friend applied to set aside the consent order on the ground that the claimant had not had capacity at the time. Two issues arose. The first was whether the test to determine her mental capacity to conduct the proceedings was to be applied to those which had been brought, or to the proceedings as they might have been brought if she had received different legal advice. The second issue was whether, if it were decided that the claimant lacked capacity, the consent order ought to have been approved by the court under CPR 21.10. On the first issue, it was held that capacity was to be judged by reference to the decisions which a claimant had actually been required to take in the action as drafted, not those which she might have been required to take had the claim been differently framed. It was held that there had been no rebuttal of the presumption that the claimant had had capacity. The Court of Appeal reversed that decision, holding that in order for the claimant to have had the capacity to approve the compromise, she needed to know what she was giving up, and that she had been unaware of the extent of her injury and potential claim. The case was remitted for determination of the second issue, namely whether CPR 21.10 was applicable. Around the same time, the defendant received permission to appeal on the first issue. The outcome of the second issue was that the CPR was incorporated into any agreement to settle a civil claim and, irrespective of how things had seemed at the time, the consent order required approval and was therefore void. Permission was given for an appeal on the second issue to be heard at the same time as the appeal on the first.

The claimant ought to have had a litigation friend when the original proceedings began. While every procedural step in an action was capable of retrospective cure, the settlement finally disposing of the claim was not. The purpose of CPR 21.10 was to impose an external check on the propriety of the settlement.

Construing the rule as applying only when the protected party had a litigation friend, as contended for by the defendant, would involve writing words into the rule which were not there. Furthermore, if “claim” in CPR 21.10(2) pre-dated the commencement of proceedings, there was no reason why “claim” in CPR 21.10(1) should not also do so. There would be no litigation friend if proceedings had not started. The defendant’s argument was that the rule in Imperial Loan Co Ltd (1892) could be deemed applicable to the settlement of civil claims. His case was that once the parties had reached agreement, it was not for the court to interfere in their bargain. In Dietz (1969), an argument that the predecessor to CPR 21.10(1) was ultra vires had been rejected. That decision had introduced a substantial, but quite specific, exception to the common law rule in Imperial Loan, but the court was bound by Dietz unless there was good reason to depart from it.

Although there was a need for finality in litigation, the policy underlying the CPR was that children and protected parties required and deserved protection, not only from themselves but also from their legal advisers. As the consent order ought to have been approved by the court, it was to be set aside and the case listed for trial.

48

Specific disclosure Fujitsu Services Ltd v Department for Transport and another

(b) is unable to obtain one, may apply, without notice, for permission to serve a witness summary instead.

[Lawtel 1/04/2014]

(2) A witness summary is a summary of –

From issue 013

(a) the evidence, if known, which would otherwise be included in

Although it is a commercial case, Fujitsu Services Ltd v Department

a witness statement; or

for Transport and another [Lawtel 1/04/2014] is a reminder that

(b) if the evidence is not known, the matters about which the party

any request for specific disclosure must be proportionate. In this

serving the witness summary proposes to question the witness.

case the claimant applied for specific disclosure of two categories of documents but the court took the view that the terms used to describe the documents were not sufficient to ensure that specific disclosure was proportionate as required under the CPR and relevant case law.

The effective use of witness summaries From Issue 28

(3) Unless the court orders otherwise, a witness summary must include the name and address of the intended witness.

(4) Unless the court orders otherwise, a witness summary must be served within the period in which a witness statement would have had to be served.

Once this procedure has been followed, the rules apply as if a witness statement had been served and, in particular, the witness

In Legal Watch: Personal Injury 22 [11/06/2014] we reported the

may be called to give oral evidence at the trial. This will invariably

decision in Scarlett v Grace. In that case, the Master had given the

involve serving the witness with a witness summons immediately

defendant permission to rely on four witness summaries but on

a trial date is known.

the claimant’s appeal the High Court judge restricted the defendant to just one. The judgment provides a useful opportunity to review the circumstances in which the use of a witness summary may be a vitally important tool, legitimately to be used and the circumstances, as in Scarlett, where its use is inappropriate.

What went wrong for the defendant in Scarlett was that in relation to three out of the four witnesses the appeal judge found that CPR 33.9 was not satisfied. One of them had refused to cooperate at all and the judge held that this justified the use of the procedure.

With the other three, the judge took the view that they could have

Well before proceedings have been issued in a claim it may be

been interviewed but no real attempt had been made to do so.

apparent that a witness has key evidence but is unlikely to

There was no evidence that any of them had refused outright to

sign a witness statement. Is it worth going on because what

provide a statement.

happens when there are proceedings and the date comes for witness statements to be exchanged? The gist of the witness’s evidence may be contained in an unsigned statement; a witness questionnaire; a letter from the witness; or even the file note compiled following a telephone conversation with him/her (see

What are the lessons to be learned from this?

1. If a witness is known (or suspected) to have valuable evidence, do everything possible to obtain a signed statement from them.

Save in the face of a complete refusal to discuss the case, this

CPR 32.9(2) below). In an extreme case the same procedure may

means making more than one attempt to arrange an interview.

be used where it is believed that the witness may have valuable

2. If the witness provides the evidence in any form which falls

evidence, even where it is not certain that s/he has.

short of a signed witness statement, do not give up, as the

The key point, however, is that the applicant must prove that it is

evidence can still be relied on in the form of a witness summary.

not possible to obtain a statement from the witness. CPR 32.9(1)

3. If the witness has provided no indication of what they may

states (with emphasis added): (1) A party who – (a) is required to serve a witness statement for use at trial; but 49

say, a very careful decision must be made as to whether to serve a witness summary and summons them to trial but with no certainty as to what their evidence may be. This will rarely be a sensible course of action.

2. Costs

by the claimants’ solicitors. She recalled typing it, but could not

CFA

not put it in the Document Exchange. That was not sufficient

Harrison and another v Black Horse Ltd [Lawtel 07/01/2014] From issue 001 A case showing the impact of the tightening of the rules on CFAs is Harrison and another v Black Horse Ltd [Lawtel 07/01/2014].

recall putting it in the post tray. Her evidence was that she had to prove service. Because there was no evidence as to what happened to the letter after it left the paralegal’s hand, service could not be deemed under CPR .6.26.

The sanction in CPR 44.3B(1) was automatic and, since the requisite notice had not been given, the claimants could not

The claimants claimed that they had been mis-sold payment

recover success fees in relation to the second appeal unless

protection insurance. They brought proceedings in the County

the court granted relief from sanctions. In that respect, the

Court for recovery of the premiums they had paid. When their

relevant version of CPR 3.9 was that in force after 1 April 2013. It

claim was dismissed, they appealed, first to the High Court and

was clear that the claimants solicitor had intended to give the

then to the Court of Appeal. Although they were unsuccessful,

defendant notice of the CFA, and there was no reason to doubt

they obtained permission to appeal to the Supreme Court. At

that they believed that they had done so. However, the purpose

that point the matter was settled by consent, with the defendant

of the notice was to alert the other party to the possibility of

agreeing to refund the premiums and to pay the claimants’ costs

its having to pay success fees or insurance premiums if it was

throughout, though not any sums in respect of after-the-event

ordered to pay costs. The defendant’s unchallenged evidence

insurance premiums. The claimants had entered into four

was that it had had no reason to assume that the appeals were

conditional fee agreements (CFAs) with their solicitors, one

funded by CFAs and that, had it known, its approach to settlement

covering the proceedings in the County Court, the remainder

might have been different. That evidence, which had to be taken

covering the two appeals and the Supreme Court application.

at face value, was sufficient to show that the defendant had

It was common ground that they had given the defendant

been prejudiced by the failure to give notice. Under the pre-April

notice of the first and fourth CFAs. They accepted that they

2013 version of CPR 3.9, the case for relief would have been

had not given notice of the second, which related to the High

borderline: The defendants had given notice of the first CFA, and

Court appeal, and the dispute centred on whether they had

their failure to give notice of the third was inadvertent; on the

given notice of the third, which related to Court of Appeal. The

other hand, they had failed to give notice of the second CFA and

claimants’ solicitors maintained that they had sent the notice

had not applied for relief promptly. However, the new version of

via the Document Exchange. In points of dispute served in

CPR 3.9 introduced a tougher approach to relief applications. If

February 2013, the defendant claimed that it had never received

the failure to give notice could properly be regarded as trivial, relief

the notice and that, by virtue of CPR 44.3B(1), the claimants were

would usually be granted provided that the application had

not entitled to recover any success fees or counsel’s fees incurred

been made promptly. If the failure could not be characterised as

under that CFA. In July 2013, the claimants applied for relief

trivial, the defaulting party bore the burden of persuading the

from sanctions. The issues were (i) whether they had served

court to grant relief. The court had then to consider whether

notice of the third CFA on the defendant; (ii) if not, whether relief

there was a good reason for the default. The claimants’ failure

from sanctions ought to be granted.

could not be said to be trivial: no notice had been given at all.

Refusing the application, the master held that it was not disputed

Nor had they shown good reason for the default. While that

that the claimants’ solicitor’s file contained a copy of a letter to the defendant’s solicitor purporting to enclose an “updated notice of funding”. Nor was it disputed that the solicitors had faxed a copy of the notice to the Civil Appeals Office. The letter

might seem harsh, the solicitors should have known that CPR 3.9 was to be amended so as to introduce a tougher approach, and an application for relief could have been made before 1 April.

to the defendant had been prepared by a paralegal employed 50

Knowles v Goldborn [Lawtel 30/01/2014] From issue 005 The case of Knowles v Goldborn [Lawtel 30/01/2014] is a reminder to claimants’ solicitors in particular that they may not commence costs only proceedings without first making a reasonable attempt to agree costs.

The claimant had instructed solicitors to pursue a personal injury action against the defendant. The claim was settled before proceedings were issued with the defendant agreeing to pay the claimant damages plus his reasonable costs. The claimant’s costs draftsman sent the defendant’s costs consultants a bill of costs which stated that fee earners at grades A, B and D had handled the case. The defendant’s costs consultants, while indicating that the defendant intended to make an offer as to costs, asked for the names, qualification and experience of the fee earners claimed so that they could be verified. The claimant’s costs draftsman responded by saying that the point raised did not justify any failure to make an offer, and stated that proceedings would be commenced unless an offer was made.

The defendant subsequently made an offer based on the case having been handled by a grade D fee earner only. The claimant

might have identified the fee earners, and it was not mandatory for the identity of fee earners to be provided, but it was not an unreasonable request to seek identity when responding to a bill of costs. The defendant was entitled to take reasonable steps to satisfy himself that somebody claimed as a given grade fee earner had the appropriate status to justify such a claim. The claimant’s costs draftsman did not appear to have attempted to agree settlement. The response to the request had been very short and unhelpful. Identifying the individuals could have done the claimant no harm. The defendant had subsequently made an offer, and the claimant had commenced proceedings without any response to that offer. The judge had stated that no offer had been forthcoming from the defendant; he had made no reference to the offer made, which was an extremely important omission. Even so, simply to send a bill of costs and then three weeks later to commence proceedings when the claimant knew that the defendant wished to engage in negotiations was to commence proceedings without making any real attempt to reach agreement. That was a plain and obvious conclusion to reach. The judge’s reasons were inadequate and overlooked the true chronology. He should have dismissed the proceedings as prematurely begun.

did not respond to that, but issued proceedings, three weeks after service of the bill of costs. The defendant applied to strike out the proceedings on the basis that, as the claimant had not

CFA/mental capacity

attempted to agree the amount of costs, the condition to the

Blankley (Protected Party) v Central Manchester & Manchester

issue of proceedings in CPR 46.14(1), that the parties must have

Children’s University Hospital NHS Trust (2014) EWHC 168 (QB)

failed to agree the amount of costs, had not been satisfied. The district judge refused the application and the defendant appealed.

Allowing the appeal, the County Court judge held that the courts had repeatedly stated that parties should seek to negotiate settlement and not rush to litigation. The rules made quite plain that costs-only litigation was to be pursued where agreement had not been reached. That implied that there would be an attempt to reach an agreement, which would be a bona fide attempt, so as to avoid litigation. The defendant had plainly shown himself to be open to negotiation: the substantive claim had been settled without the issue of proceedings; further, his costs consultants had responded to the bill of costs on the basis that they wished to make an offer but sought further information before doing so.

With a more careful trawl through the correspondence, they 51

From issue 006 The case of Blankley (Protected Party) v Central Manchester & Manchester Children’s University Hospital NHS Trust (2014) EWHC 168 (QB) looks at the impact of a change in mental capacity on the validity of a CFA. The claimant/appellant had undergone surgery at a hospital run by the defendant/respondent Trust. She was left with brain damage and instructed a firm of solicitors to begin a clinical negligence action. Because she did not have capacity, she acted through a litigation friend. In February 2005, liability was agreed with damages to be assessed. By May 2005, the claimant had regained capacity and entered into a conditional fee agreement (CFA) with her solicitors. In February 2007, she lost capacity again. The

CFA covered all work up to February 26, 2007. Thereafter, the

contemplation of the parties. To treat the retainer as terminated

claimant acted through a litigation friend, who was subsequently

by what might be a fleeting episode of incapacity would be unjust

appointed to act as her receiver. The proceedings were settled

and unreasonable; the doctrine of frustration was to be confined

three years later. The claimant’s solicitor submitted a bill of costs

within narrow limits and was not lightly to be invoked.

claiming payment on the basis of the CFA. Part of the bill related to costs incurred after March 2007, when the claimant was acting through her litigation friend. The Trust argued that no costs were recoverable in relation to that period, because the CFA had automatically terminated on the claimant’s loss of capacity in February 2007, leaving the solicitors without any retainer.

The costs judge agreed. He held that the litigation friend had neither adopted the CFA nor entered into a new one. The central issues in the claimant’s appeal were (i) whether supervening incapacity terminated a solicitor’s retainer; (ii) if the CFA had been frustrated, whether the litigation friend had adopted it upon his appointment; (iii) whether S7 Mental Capacity Act 2005 entitled the solicitors to payment for the supply of “necessary” services; (iv) whether the defendant was estopped by convention from denying that the solicitors had authority to act for the claimant.

Allowing the claimant’s appeal, the High Court judges held that it was common ground that the supervening mental incapacity of a principal terminated the actual authority of his agent. However, the termination of a solicitor’s authority by reason of mental incapacity did not ordinarily and of itself frustrate the underlying contract of retainer. In particular, a retainer such as that in the instant case, entered into with a person known to have fluctuating capacity, was not frustrated by any loss of capacity.

The supervening inability of an individual to continue to instruct his solicitor personally, with the likelihood that a deputy would be appointed, did not significantly change the nature of the contract of retainer. In the CFA, the obligation to provide instructions was express, and would be implied in any event. It followed that an inability to provide instructions was not something that was not dealt with by the contract. Supervening incapacity might cause a

If, contrary to the foregoing, the CFA had been frustrated, the question arose as to the basis on which the solicitors had acted following the appointment of the litigation friend. He had full authority to conduct the proceedings on the claimant’s behalf.

Given that he had either given instructions to the solicitors or, at the very least, ratified the steps that they had taken, it could not be disputed that the solicitors’ conduct of the proceedings had been authorised by the claimant’s duly empowered representative. The defendant therefore bore the burden of proving that the claimant was not liable for her solicitors’ fees.

Had the CFA been frustrated, it would have ceased to exist and the litigation friend could not have adopted it. Had it been necessary to decide the point, the court would have found that the litigation friend had not implicitly entered a new CFA with the solicitors.

The claimant’s solicitors’ pursuit of he proceedings fell within the definition of “necessary services” in S7(2) of the 2005 Act. The appointment of a receiver or deputy did not mean that S7 could no longer be relied upon. In any event, since the solicitors had been instructed by the litigation friend, S7 had no application.

The claimant’s solicitors had been acting with the claimant’s authority whether or not the CFA remained in force, and it was not necessary to rely on any estoppel to establish that.

However, had they been acting without authority, the defendant could not have been estopped from so contending. Solicitors warranted that they had the authority of the party they purported to represent, and the opposing party’s reliance on that warranty could not give rise to any form of estoppel if it subsequently proved to have been misplaced.

delay in performance of the obligation to provide instructions, but that would be a matter for the enforcement of the contract terms. Even if the delay was not within the scope of the contract terms, it would only amount to a frustrating event if it fell outside what the parties could reasonably contemplate at the time of contracting. In the instant case, the possibility that the claimant might lose capacity had been within the reasonable

Haynes (deceased) v Department for Business Innovation & Skills (2014) EWHC 643 (QB) From issue 011 If a claimant has good reason to sue a number of defendants, they will usually recover the costs of all the defendant parties from 52

those found liable. However, as Haynes (deceased) v Department

Xhosa Office Rentals Ltd v Multi High Tech PCB Ltd and others

for Business Innovation & Skills (2014) EWHC 643 (QB) shows,

[Lawtel 25/03/2014]

that is not always the case.

The claimant’s husband had been exposed to asbestos dust during his working life and it had been a material cause of his death from lung cancer. She issued proceedings against his ten employers.

The defendant/respondent accepted the claimant’s Part 36 offer to settle her claim against it for £18,000 plus standard costs.

The claimant subsequently abandoned her claims against the other nine defendants, proceedings having been issued but never served. She then lodged a bill of costs amounting to £58,000. The defendant/ respondent argued successfully before a costs officer, and afterwards before the costs judge, that as its liability for the injury to the claimant’s husband was several, rather than joint and several, that principle should apply to the costs it was to pay.

The claimant appealed and submitted that under CPR 36.10(1), where a Part 36 offer was accepted, the claimant was entitled to “the costs of the proceedings”, which would mean the costs against all ten defendants; it was arbitrary to divide the common costs by the number of defendants.

From issue 012 Although it is a commercial case Xhosa Office Rentals Ltd v Multi High Tech PCB Ltd and others [Lawtel 25/03/2014] is of interest to defendants in personal injury claims faced with qualified one way costs shifting (QOCS). Two of the exceptions to the QOCS principle are where the claimant or a person acting on the claimant’s behalf are guilty of conduct likely to obstruct the just disposal of the proceedings; or where in a claim for both personal injury and non personal injury, the non personal injury claim is for the benefit of a third party and is unsuccessful. The test will be whether the non-party had acted in such a way that he should be deemed to be a ‘real party’ to the action.

In this case, the applicants applied for an order adding the respondent additional party to the proceedings for costs purposes only. He had been the beneficial owner and main director of a company which had brought proceedings for breach of contract against the applicants. All evidence for the claim was provided by and derived from the respondent who also funded the

Allowing the appeal but only to a limited extent, the High Court

proceedings when his company ran out of money at an early

judge held that the costs of the proceedings, within the meaning

stage. Applications were made for freezing and security for

of CPR 361.10(1), meant the costs of the proceedings against

costs orders and the judges who dealt with them stated that the

whom the deemed order had been made. Any broader definition

respondent’s company’s case was weak and barely arguable. The

would achieve obvious injustice and violate the language of the

company failed to comply with the security for costs order and

rule as seen in its proper contextual setting.

proceedings were struck out. The applicants’ costs at that stage

Common costs fell into two categories: non-specific costs which

were around £308,000.

would have been incurred in any event, regardless of the number

They contended that the proceedings had been brought for the

of other defendants; and specific costs, which were, in principle,

personal benefit of the respondent, his being an extension of him,

capable of identification and division. In the instant case, the

and that the court should exercise its jurisdiction under S51(1)

costs judge had not treated the non-specific common costs as a

Senior Courts Act 1981 and CPR 48.2 to add him as a party for

separate category which the claimant was entitled to on a 100%

costs purposes.

basis. The matter would be remitted to him to identify those nonspecific common costs. As regards the specific common costs, whilst the cost judge’s approach had been arbitrary, the claimant had failed to submit any evidence which would have enabled him to be more precise, and so it could not be concluded that his decision was perverse.

Allowing the application, the High Court judge held that it was clear from the authorities that the power to add a party for the purposes of costs should be sparingly and exceptionally exercised and that each case turned on its own facts. It was difficult to see why the applicants should be left out of pocket to a considerable extent where an identifiable person was so obviously the moving spirit behind the litigation. There were cogent, compelling and unanswerable reasons for making the order. The respondent had

53

been the claimant in all but name and had funded the claim after

credit of 4% above base rate and was payable by the claimants if

his had run out of money. The claim was pursued even after two

their claims were successful, and after damages were received.

judges had remarked upon its weakness and the respondent was

The personal injury claims succeeded and the judge ordered

personally responsible for the manner in which the litigation had

the defendants to pay the majority of the claimants’ costs plus

been conducted.

interest on their disbursements at 4% above base rate. In arriving

The only evidence his company had relied on came from the respondent who alone stood to benefit. His company’s claim

at the appropriate rate, the judge took into account the claimants’ means.

against the applicants was weak. It ultimately failed not on

The defendants conceded that pre-judgment interest was payable

its merits or because the respondent had changed course,

on the disbursements but submitted that the appropriate rate was

but because security for costs could not be paid. By that stage

1% above base rate. They also argued that the solicitors’ means

considerable expense and stress had been incurred. Following

should have been taken into account rather than the claimants’

the outcome of the security for costs application, the respondent

means. Dismissing the appeal, the Court of Appeal held that the

had to have appreciated that costs would be sought from him

power to award interest on costs, including pre-judgment interest

personally.

on costs, was derived from CPR 44.2(6)(g). The purpose of the award was to compensate a party who had been deprived of the

Jones and others v Secretary of State for Energy and Climate Change (2013) EWHC 1023 (QB) From issue 013 In Greenwoods’ Alert 351 we reported the first instance decision in Jones and others v Secretary of State for Energy and Climate Change (2013) EWHC 1023 (QB). The case has now been to the Court of Appeal and is reported as Secretary of State for Energy & Climate Change and another v Jones and others (2014) EWCA Civ 363.

use of his money, or who had had to borrow money to pay for his legal costs. The discretion conferred by the rule was not fettered by the statutory rate of interest under the, but was at large. The court had to conduct a general appraisal of the position having regard to what was reasonable for both the paying and receiving parties. In commercial cases the rate of interest was usually set by reference to the short-term cost of unsecured borrowing for the relevant class of litigant. The rate might differ depending on whether the borrower was classed as a first class borrower, an SME or a private individual. Historically, first class borrowers had generally recovered interest at base rate plus 1% unless that was

The claimant/respondents were industrial workers of modest

unfair. SMEs and private individuals tended to recover interest at

means who had brought claims for personal injury against the

a higher rate to reflect the real cost of borrowing to that class of

defendant/appellants. Their claims had been brought with

litigant.

the assistance of a conditional fee agreement. Their solicitors’ fees were only payable if the claims were successful, but disbursements were payable regardless of the outcome of their claims. They also entered into individual “disbursement funding agreements” with their solicitors, under which the solicitors agreed to provide them with credit of up to £5,000 each for the payment of disbursements. The agreements were expressed to be credit agreements exempted from the Consumer Credit Act 1974.

If the claimants’ claims were successful the credit/disbursements would be repaid by the defendants. If they were unsuccessful, a claim would be made for payment of the disbursements from after the event insurers. The agreement contained a charge for

These were claimants of modest means who had brought personal injury actions for their own benefit. They needed to fund their claims and they borrowed to finance their disbursements at what the defendants conceded was a reasonable interest rate for private individuals in their circumstances. Under clause l.5 of the disbursement funding agreement, payment of the interest was contingent on the claim being successful and damages actually being received. That did not mean that the arrangements were unreal or notional. The claimants had borrowed money from the solicitors, which had funded disbursements of over £787,500. They won their claims and recovered damages. Their interest liability had therefore crystallised. The judge had therefore been entitled 54

to make the order that she did as the relationship between the

pay, the defendant had made no attempt to enforce the costs

claimants and the solicitors was governed by the agreement, and

order in his favour.

it gave rise to a real liability on the claimants as borrowers.

Comment Although disturbing from an insurer’s perspective, this case has limited relevance as it relates only to CFAs entered into prior to 1 April 2013.

R (on the application of Paul Crawford) v Newcastle Upon Tyne University (2014) EWHC 1197 (Admin) From Issue 16 The case of PGF II drove home the need for a party seriously to consider any offer made by another party to engage in ADR. The

Franklin v Maddison and another [Lawtel 17/04/2014] From Issue 15 Although Franklin v Maddison and another [Lawtel 17/04/2014] is not a personal injury case, it is of wider relevance in the context of qualified one-way costs shifting (QOCS).

The appellant/claimant had operated auto-trading businesses which were searched by the police following the disappearance, and suspected murder of two men. A number of vehicles were seized, some of which were later released to persons claiming ownership of them, including the defendant/respondent. Three cars were returned to him after he produced keys for them.

The claimant was subsequently convicted of murdering the two men and sentenced to life imprisonment. Thereafter, he issued proceedings against the police, complaining that they had caused him to lose vehicles under their control, and against the defendant, who was accused of wrongfully taking the three cars.

At trial, the claimant sought to amend his claim to cover six cars, but the judge refused on the basis that the proposed amendment was not properly particularised. She accepted the defendant’s evidence and concluded, on the balance of probabilities that he was to be regarded as owner of the vehicles he had claimed, having made cash payments to the claimant for them. She indicated that the defendant was entitled to recover his costs from the claimant.

The claimant’s claims against the police also failed. At the hearing when judgment was handed down, the defendant asked for costs on the indemnity basis. The judge referred to the defendant’s failure to give proper disclosure and comply with protocols, but indicated that the claimant’s claim against the defendant was wholly without merit. She therefore granted the request.

However, since the claimant was in prison and in no position to 55

case of R (on the application of Paul Crawford) v Newcastle Upon Tyne University (2014) EWHC 1197 (Admin) involved the court considering the costs’ position where more than one form of alternative dispute resolution (ADR) was available.

The claimant had failed his final year examinations. He repeated the final year and failed again. He appealed, asserting that the defendant had not calculated his grade in accordance with the Bachelor of Medicine and Bachelor of Surgery Stage 5 Handbook for 2010/2011. His appeal and a subsequent review were rejected. Whilst pursuing the internal appeals process the claimant had repeated his complaint to the Independent Adjudicator for Higher Education. In November 2011 the adjudicator provisionally rejected the complaint. The claimant expressed an intention to start judicial review proceedings, so the complaint terminated. The proceedings began in May 2012.

The claimant immediately invited the defendant to attempt mediation. The defendant’s solicitors said that they agreed, in principle, to ADR, but that they needed to take instructions from the defendant. They asked what the claimant had in mind.

He replied that he wanted to undertake a 12-month medical placement before resitting his final examinations for a second time. He suggested that his proposal be explored in mediation.

The defendant did not reply. In the meantime, on 2 July 2012, the judicial review proceedings were stayed on the claimant’s application pending the reopening and final determination of his adjudication complaint. The complaint was found to be unjustified, although the adjudicator briefly noted that the defendant’s handbook could have been clearer. In April 2013 the defendant sent the claimant a Part 36 offer letter, offering to bear its own costs if the claimant discontinued his claim. The claimant did not reply and the offer was withdrawn. The judicial review claim was heard in December 2013 and dismissed.

The defendant submitted that it was entitled to its costs

an outright refusal to participate would have been justified on

because it was the successful party. The claimant argued that

reasonable grounds. However, that was not an invariable rule;

there should be no order as to costs, primarily because the

the burden remained on a claimant to show that the failure to

defendant had unreasonably refused to engage in mediation and

respond had been unreasonable. The defendant’s solicitors had

because there would have been no claim if the handbook had

responded. It could not be said that the defendant had refused

been clearly drafted.

to engage in ADR because it had engaged with the adjudication

The High Court judge held that when the claimant was inviting the defendant to engage in mediation, he had simultaneously

process. There was, therefore, no reason to depart from the general costs rule.

been pursuing his complaint before the adjudicator. Both parties

Whilst the adjudicator had criticised the handbook as being

had fully engaged with the adjudication process, whose issue

ambiguous, the claimant’s case was that the handbook was

was the same as that in the judicial review proceedings. The

unambiguous in his favour and that if it had been properly

reality of the situation was that the adjudication process had

applied, he would have passed his final examination. There was

been a form of ADR. The fact that the defendant’s solicitors

no basis for depriving the defendant of its costs simply because

had agreed in principle to ADR did not amount to an unqualified

the terms of the handbook were not clear.

acceptance that it was appropriate, especially as there had been no proposal from the claimant as to what mediation might achieve. To the extent that it had been proposed to resolve

Finglands Coachways Ltd v O’Hare (Protected Party) (2014)

whether the claimant’s final examination had been correctly

EWHC 1513 (QB)

marked, that matter had already been pursued before the

From Issue 19

adjudicator, so it was difficult to see how the defendant was being unreasonable in not engaging in a different and further form of ADR. There had been nothing further to mediate beyond the substance of the claimant’s claim that he was entitled to his degree because his final paper had been wrongly marked. He had

In Finglands Coachways Ltd v O’Hare (Protected Party) (2014) EWHC 1513 (QB) we have an important decision on the proportionality of costs under the cost rules applying prior to 1 April 2013.

already been allowed to resit his final year. It was not in dispute

The respondent/claimant had brought a personal injury action

that the defendant could, in exceptional circumstances, allow

against the appellant/defendant which was later discontinued.

a further resit, but the claimant had not raised any exceptional

The claim was originally estimated to be worth over £3m. The

circumstances; it had not been enough for him simply to say

defendant’s bill of costs was approximately

that he wished to undertake a placement before a second resit. After the adjudication, the defendant had been entitled to take the view that it had grounds to resist the challenge made to its decision; such a stance could not be characterised as unreasonable. Furthermore, the claimant’s case in mediation was to seek an outcome different from that which was sought in the judicial review proceedings: the objective of the former was to persuade the defendant to allow the claimant a second resit,

£60,000. In his points of dispute, the claimant did not assert that the defendant’s costs were disproportionate overall. However, during the assessment of costs hearing his representative raised points about the proportionality of various individual items such as conferences with counsel. The judge commented on the “necessity” and “reasonableness” of some items and reduced the bill to approximately £37,800 plus interest.

whereas the purpose of the latter was to attack the content of the

In its appeal the defendant argued that the judge had erred

handbook. There had, therefore, been no reasonable prospect of

in applying a test of necessity, rather than reasonableness,

the mediation succeeding. The defendant had been discourteous

when there had been no finding that the costs claimed were

in not responding to the claimant’s mediation invitation. Silence

disproportionate.

might be unreasonable and lead to costs sanctions even if 56

Dismissing the appeal, the High Court judge held that on a number

At first instance the Master assessing the costs had reviewed

of occasions in the course of the costs assessment the judge used

various authorities and concluded:

the terms “necessary” and “need” indiscriminately. That was not fatal to his decision. The context suggested that he had used those terms in their ordinary sense to convey a notion of justification when enquiring whether the costs were proportionate. He should not be taken as applying the test of necessity.

“I do not see that the case is in fact any more risky if it only settles a week before the trial than if it settled a month or a year earlier.

The process of quantification of a personal injury claim takes some time to crystallise and settlements regularly occur close to hearings. If the claimant has prepared for a forthcoming trial and

Even if the judge had applied the test of necessity, he was not wrong

the defendant then settles the case, the defendant will have to pay

to do so. CPR 44.4(2) of the old rules meant that the court would,

for those extra costs. It does not mean, in my view, that the case

of its own initiative, disallow disproportionate costs even if the

necessarily becomes riskier during the trial preparation period.”

paying party had not raised the point. Further, even if a bill overall was not disproportionate, that did not preclude the judge from concluding that specific items were disproportionate and then

He assessed the uplift at 30%.

The claimant appealed but the High Court judge rejected the

applying the dual test of necessity and reasonableness to those

appeal. She quoted extensively from Fortune v Roe (2011).

items. It was contemplated in Lownds (2002) that if costs as

“A success fee is based upon the premise that there is a risk that the

a whole were proportionate, all that was normally required was that each item should be reasonably incurred. However, the use of the qualification “normally” made it clear that it was not a hard and fast rule. Therefore, in assessing costs under the old CPR a court could consider on an item-by- item basis whether the particular cost was proportionate and necessary even if costs were proportionate on a global basis. The judge had not misdirected himself in law.

claimant’s solicitors will not recover all or part of their costs. The success fee compensates them for undertaking that risk. The level of risk determines the amount of the success fee, save in cases where such fees are fixed by the court. Section 58 of the Court and Legal Services Act 1990, as amended, defines a conditional fee agreement as one which provides for fees and expenses or any part of them to be payable only in specified circumstances. The Conditional Fee Agreements Regulations 2000 provide that if the percentage increase is disallowed on the grounds that the level at

Bright v MIB (2014) EWHC 1557(QB) From issue 025 The case of Bright v MIB (2014) EWHC 1557(QB) received widespread media attention.

The proceedings arose from a road traffic accident on 26 September 2010, as a result of which the claimant had been rendered tetraplegic. An ‘old style’ CFA had been entered into on 11 October 2010 providing for a staged success fee of 50% up to three months before trial and then 100%. Liability remained in dispute but on 26 April 2012, five days before a trial of the issue of

which the increase was set was unreasonable in view of the facts which were or should have been known to the legal representative at the time it was set, that amount ceases to be payable under the agreement unless the court is satisfied that it should continue to be so payable.

The Civil Procedure Rules r. 44.4 states that, where the court is assessing the amount of costs either by summary or by detailed assessment, it will not, either on a standard basis or on an indemnity basis, allow costs which have been unreasonably incurred or are unreasonable in amount. The CPR Pt 44 Costs Practice Direction provides in relation to success fees as follows:

liability the whole claim was settled at a joint settlement meeting.

‘11.7. …When the court is considering the factors to be taken into

On 30 October 2012, the claimant submitted a bill of costs claiming

account in assessing additional liability, it will have regard to the

a success fee of 75%. The defendant offered 30% in response.

facts and circumstances as they reasonably appear to the solicitor

The CFA assessed as high risk the lack of independent witnesses, contributory negligence, quantum, expert evidence and risk of a well-placed Part 36 offer.

57

or counsel when the funding arrangement was entered into and at the time of any variation of the arrangement.

11.8(1). In deciding whether a percentage increase is reasonable

Dunfermline Building Society v Ghana Commercial Finance Ltd

relevant factors to be taken into account may include: (a) the risk

and others [Lawtel 17/07/2014]

that the circumstances in which the costs, fees or expenses would be payable might or might not occur; …’”

The judge concluded that “(w)hat is material is whether the success fee is set at such a level which is reasonable in light of the risk of non-recovery of costs anticipated at the date of entering into the CFA”.

The Master had correctly concluded that: “…the risks to be considered by the claimant’s solicitor in this case revolved entirely around the risk of a Part 36 offer and the complications that might ensure from any finding of contributory negligence.”

He had before him the Bill of Costs which included details of the allegations of contributory negligence raised in the amended defence of the MIB. These included that the vehicle’s hazard lights were flashing and the allegation that the claimant had a lack of awareness of the approach of the vehicle because of her preoccupation with her mobile phone. The Master took into account the increased risk of a “well-placed” Part 36 offer with the additional difficulty in assessing the adjustment for contributory negligence.

From issue 028 With qualified costs shifting (QOCS) defendants will take an even greater interest in whether or not a third party is funding and controlling the litigation brought in the claimant’s name. That was the issue in the commercial case of Dunfermline Building Society v Ghana Commercial Finance Ltd and others [Lawtel 17/07/2014].

The defendant/applicant had previously obtained summary judgment in proceedings that the third respondent, a director of the two companies, had initiated on behalf of the first and second respondent companies.

It submitted that although a third party costs order was exceptional, the substantive case had been hopeless and doomed to failure; the third respondent was the sole director of the companies throughout and had filed witness statements on their behalf; He did not have a bona fide belief that the companies had had an arguable case and had failed to file any evidence in response to the instant application. The third respondent argued that he ought not be made personally liable for costs as there was a clear distinction between him and the companies and the

Further, the fact that liability was not admitted was also taken into

benefit of any litigation inured to shareholders and not to him

account by the Master as adding to the risk justification for the

personally.

success fee. He had regard to the decision in C v W (2008) in which the Court of Appeal substituted a success fee of 20% for the risk of failure to beat a rejected -offer where there was an issue of contributory negligence.

Allowing the application, the High Court judge held that the only immutable rule in relation to costs was that there were no immutable rules; a third party costs order was always exceptional and called for a cautious approach. Exceptional meant no more than

The decision on a reasonable success fee was reached

outside the ordinary run of cases. Although the third respondent’s

independently of the decision of the Master as to staging. The

decision to bring the substantive matter in the Mercantile Court

Master had not erred in his approach to assessing a reasonable

was procedurally misconceived, it should not be held against

success fee. Nor was the conclusion he reached, that the success

him. He was a hugely experienced litigant in person, in both

fee in this case should be assessed at 30%, outside the parameters

the roles of barrister and solicitor, who had actively represented

of a decision of a Master properly directing himself on the relevant

the companies with which he was closely connected. The more

circumstances.

important consideration was that he was inextricably bound up with the companies’ fortunes; it was impossible to ignore that the third respondent was connected with a number of companies in all of which he had played much the same role.

The substantive proceedings had been hopeless on the merits and ought never to have been brought. In reality there was no 58

distinction between the third respondent and the companies

be read as being subject to the power of the rules committee to

and if there was any distinction, it was not sufficient to merit not

make rules of court about the availability of an award of costs,

making the order sought in all the circumstances.

the amount of The judge had erred in holding that the QOCS rules applied to

Wagenaar v Weekend Travel Ltd and another (2014) EWCA Civ 1105 From Issue 030 Qualified one-way costs shifting was always going to cause problems and Wagenaar v Weekend Travel Ltd and another (2014) EWCA Civ 1105 is probably just the first of many cases on the subject.

The claimant had been injured in a skiing accident whilst on a package holiday arranged by the defendant. It denied negligence and joined a ski instructor as a third party. The judge dismissed the claimant’s claim against the defendant and the defendant’s claim against the third party. He ordered that the claimant should pay the defendant’s costs and that the defendant should pay the third party’s costs. He applied the rules on qualified one-way costs shifting (QOCS) introduced by the Jackson reforms directing that, pursuant to CPR 44.13 and 44.14, neither costs order was to be enforced. In doing so he held that although the costs had been incurred before the QOCS rules came into force, the rules had

the Part 20 claim against the third party. The proper meaning of the word “proceedings” in CPR 44.13 had to be divined primarily from the QOCS rules. CPR 44.13 – 44.16 concerned claimants who were making a claim for damages for personal injury, whether in the claim, in a counterclaim, or by an additional claim. In the context of the QOCS regime, the word “proceedings” in CPR 44.13 did not mean the entire umbrella of litigation in which commercial parties disputed responsibility for the payment of personal injury damages. Rather, it was used because the QOCS rules were intended to catch claims for damages for personal injuries where other claims were also made by the same claimant. CPR 44.13 applied QOCS to a single claim against a defendant in which the claimant sought damages for personal injury but might also be making claims for damaged property and the like. It did not apply QOCS to the entire action in which a claim for damages for personal injury was made.

The defendant’s appeal would be dismissed. The third party’s would be allowed. The defendant would be ordered to pay the third party’s costs to be assessed on the standard basis if not

retrospective effect. He also held that they applied to CPR Part

agreed.

20 claims in the same way as they applied to primary claims

Comment

between claimant and defendant.

The defendant and third party appealed. The defendant submitted that the judge had erred in applying the QOCS rules to the case.

First, it argued that the rules were ultra vires S51(3) Senior Courts Act 1981. Secondly, it argued that they did not have retrospective effect. Finally, it argued that it had in place a pre-commencement funding arrangement within the meaning of CPR 48.1, to which the pre-QOCS rules should have been applied. The third party submitted that the judge had erred in holding that the QOCS rules applied to Part 20 proceedings.

The Court of Appeal held that the QOCS rules were not ultra vires S51(3) of the 1981 Act. The defendant’s case was that S51 did not allow secondary legislation to restrict the High Court’s power, set out in S51(3), to determine by whom or to what extent the costs of litigation were to be paid. However, that power had to 59

As with so many of the recent reforms, unintended consequences are beginning to appear. CPR Part 20 expressly provides that “the purpose of this Part is to enable…additional claims to be managed in the most convenient and effective manner.” That is why in a case like Wagenaar the appropriate course was to run the claim and third party action effectively as one. With this ruling in mind, however, defendants are bound to think differently. If the defendant feels sufficiently confident it will fight the claimant’s claim and if successful suffer the consequences of QOCS. If, however, it is unsuccessful it will now bring fresh contribution proceedings against a third party, resulting in additional cost, delay and the use of court resources if there is a second trial.

CFA Ultimate Products Ltd and another v Woolley and another (2014) EWHC 2706 (Ch) From issue 31 Although from a defendant perspective CFAs will begin to diminish in significance, the commercial case of Ultimate Products Ltd and another v Woolley and another (2014) EWHC 2706 (Ch) is still important and it is also an early application of Denton.

The respondents had issued proceedings against the appellants for passing off and trademark infringement. They had entered into CFAs with their solicitors, who in turn had entered into CFAs with counsel. Notice of the CFAs had been served on the appellants. However, the CFAs were superseded in the runup to trial and new CFAs were entered into. The later CFAs

place, but that would have told them nothing more about the terms or amount of any success fee. They would have been, in substance, in exactly the same position. Moreover, the sanction under CPR 44.3B applied only subject to the court’s powers.

Regard had to be had to the circumstances and effect of the noncompliance. If, as in the instant case, compliance would have made no substantial difference to the appellants, there was no reason why the court should want to adhere rigidly to the rule or why it would want to deem to be serious or significant a failure which, in truth, was not so. Furthermore, the failure to comply was correctly characterised by the Master as a slip, mistake or oversight on the solicitors’ part. The Master had been fully aware of the terms of CPR 3.9 and had exercised his discretion without material fault. If the instant court were to consider the matter afresh it would reach the same conclusion.

included higher success fees, but the solicitors did not notify the appellants by the prescribed form N251 as required by CPR 44.15(2). In the event, the trademark issues were stayed, but the passing- off issues proceeded to trial and judgment was given in the respondent’s favour. The appellants claimed that because they had not been notified of the later CFAs, the respondents

Kellie and another v Wheatley & Lloyd Architects Ltd (2014) EWHC 2886 (TCC) From issue 32 In another commercial case, Kellie and another v Wheatley &

were not entitled to recover any success fees. Before a Master

Lloyd Architects Ltd (2014) EWHC 2886 (TCC), the court was asked

the respondents were granted full relief from sanction in respect

to consider an issues based costs order. This case illustrates the

of the costs of the proceedings at first instance, which allowed

circumstances in which a court will treat issues raised by a party

them to recover, in principle, any additional liability in respect of

as being sufficiently ‘discrete’ to make adjustments in the overall

the later CFAs.

costs’ order.

Dismissing the appellants’ appeal, the deputy High Court

The judge found that the claimants had not established that

judge held that the respondents’ application for relief from

the defendant had breached its duty of care and explained why,

sanction required the court to exercise its discretion under CPR

if he had reached a different conclusion on breach of duty, he

3.9. Applying the guidance in Denton, the respondents’ failure to

would have held that they had failed to establish that they had

comply with CPR 44.15(2) was neither serious nor significant. It

suffered any loss as a result. The judge reserved three issues for

did not imperil future hearing dates or otherwise disrupt the

consideration: (i) whether the claimants should pay more than

conduct of the litigation or of litigation generally. The appellants

90 per cent of the defendant’s assessed costs; (ii) whether the

did not contend that it made any difference to their conduct

assessment of the defendant’s costs should be on the indemnity

of the case or to anyone else’s position. They were aware that

basis; (iii) whether, in the light of the decision on the first two

the solicitors and counsel were acting under CFAs and that

issues, the claimants should pay any further amount by way of

therefore success fees could be payable if the respondents

interim payment.

succeeded. They did not know, and had no right to know, the level of those success fees, or indeed any other terms of the CFAs. If the respondents had complied with the notice requirements, the appellants would have known that there were new CFAs in

The claimants contended that the defendant should recover only 90 per cent of its costs on the ground that it raised, pursued to trial and lost on two discrete issues: a no-loss defence and a 60

limitation defence. The defendant sought indemnity costs on the basis that the claim was weak and had only been pursued in the hope of pressurising it and its insurers to avoid the time and cost involved in prolonged proceedings, and relied on the fact that the claimants had refused two reasonable offers of settlement.

Comment This case confirms that if a court is to be asked to deprive a successful party of part of its costs, it will be necessary to show that the costs of dealing with any issues on which that party lost can be separated out and are in a meaningful amount.

The Deputy High Court Judge held that the two issues of no-loss defence and limitation defence were not truly discrete issues, they were merely arguments on the issues of no loss and

Long v Value Properties Ltd and another (2014) EWHC 2981 (Ch)

no liability. It would be futile to engage in a semantic discussion

Issue 35

of whether the no-loss defence and the limitation defence were distinct issues or merely arguments on wider issues. Each of them gave rise to specific legal issues. It was possible that they necessitated some further evidential enquiry, but if they did it was probably minimal. No additional time of any significance

Although conditional fee agreements will gradually fade out of personal injury claims, the commercial case of Long v Value Properties Ltd and another (2014) EWHC 2981 (Ch) is still relevant at present.

for costs was taken with the points at trial. Counsel’s fees were

A dispute had arisen between claimant/appellant and the

unlikely to have been affected. The defences did not affect the

defendants/respondents. In letters before action, her solicitors

outcome of the case and made no identifiable difference to the

had informed the defendants that she was represented under

costs incurred by either party. They should not affect the basic

the terms of a conditional fee agreement (CFA) with a success

outcome, which was that the unsuccessful party must pay the

fee. She brought proceedings against the defendants which were

costs of the successful party.

settled and a consent order was made requiring them to pay the

The costs should be assessed on the standard basis. Although the case was not a strong one, it was not so weak as to be especially remarkable. The evidence was not greatly impressive on paper but that was a different matter from saying that the pursuit of the case in reliance on it was unreasonable to a high degree. There was no reason to believe that the claim was pursued with a view to pressurising insurers. The claimants must pay all of the defendant’s costs to be subject to detailed assessment on the standard basis if not agreed.

In deciding the appropriate amount of a payment on account of costs the court should make a reasonable assessment of what was likely to be awarded on assessment. Having regard to the defendant’s approved budget and to the length of the trial, it was not likely that less than £90,000 would be awarded on a standard assessment of the costs. Indeed the greater likelihood was that the increased length of the trial would result in a modest uplift above the amount of the approved budget. There was no good reason why the claimants should not pay £90,000 on account of the costs awarded to the defendant.

claimant’s costs subject to a detailed assessment. The claimant commenced detailed assessment proceedings on 17 October 2013 and served a notice of commencement and bill of costs on the defendant as required by CPR 47.6(1). However, she failed to serve the further information identified in PD 47-32.5(2) as to the details of the CFA. The claimant agreed an extension of time for the defendants to serve their points of dispute in which they alleged, for the first time, non-compliance with PD 47-32 and stated that accordingly the success fees of her counsel and solicitors were not recoverable. A week later, on 22 November, the claimant served the further information and apologised for the oversight. The defendant refused to resolve the matter and the claimant’s application for relief from sanctions was refused on the basis that the applicable sanction was under CPR 44.3B(1) (d) which imposed an “all or nothing” penalty. The judge found that the non- compliance might have been regarded as trivial and that little prejudice had been caused to the defendant, but that he was bound by Mitchell to refuse relief.

Allowing the claimant’s appeal, the High Court judge held that it was logical to conclude that the further information was intended to be served with the other documents at the

61

commencement of the assessment. In imposing an unequivocal

involved a rear-end shunt, as a result of which the claimant

obligation to supply the additional documents without expressing

claimed for both personal injury and vehicle-related losses. It

a time for that supply, but directly linking their supply with that

was our client’s insured’s case that the collision was caused by

of the documents in CPR 47.6, the drafter of the rule and of the

the claimant’s deliberate braking. At the hearing the claimant

practice direction had clearly intended the additional documents

failed to produce two allegedly independent witnesses and

to be provided at the same time.

his own evidence was full of contradictions and conflicted with

The applicable sanction for failure to serve the further information was imposed by CPR 44.3B(1)(c) as there had not

documentary evidence. As a result the judge dismissed the claim and found in favour of our client’s insured on his counterclaim.

been a complete failure to serve the required information in the

Although the District Judge stopped short of finding the claim

course of the assessment process. There had been a failure to

to be fraudulent, she nevertheless indicated that she had not

disclose on time.

believed a single word of the claimant’s evidence. Accordingly,

If the more severe sanction under CPR44.3(B)(d) had been applicable, relief from that sanction should have been granted.

The breach had to be looked at in the context of its surrounding circumstances:

the

claimant

had

commenced

detailed

assessment proceedings well within the three- month limit; once the breach of the CPR was brought to her attention, it was

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 against the claimant personally and he has only 21 days in which to pay.

remedied swiftly; and, in the absence of any agreement by the defendants, the application for relief was also brought very quickly.

The defendants preferred to take advantage of the claimant’s oversight. They had suffered no prejudice and there had been

Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4)1 (2014) EWHC 3148 (TCC)

no unnecessary cost or delay. The breach was trivial and Denton

From Issue 36

was followed. The judge erred in regarding the application as

The case of PGF II SA v OMFS Co 1 Ltd (2013) served as a warning

bound to fail even though he had concluded that the breach was trivial. He should have gone on to consider whether that was the appropriate outcome in all the circumstances of the case, so as to enable the court to deal justly with the application as required

by CPR 3.9. The just disposal of the application required complete relief from sanctions.

to parties not to refuse alternative dispute resolution (ADR) without good reason. This issue arose in the commercial case of Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4)1 (2014) EWHC 3148 (TCC) and received detailed consideration by the court.

In its substantive judgment the court had found for the defendant.

The claimant accepted that the defendant was entitled to its

QOCS overturned From within Plexus Law From issue 36

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

As more cases come through that are subject to qualified one

the court exercised its discretion under CPR 44.2, it had to

way costs shifting (QOCS), defendants must take every available

have regard to all the circumstances, including the conduct of

opportunity to overturn the principle that if the claimant is

the parties both before and during the proceedings. “Conduct”

unsuccessful he has no costs liability to the defendant. We were

included a refusal to agree to ADR. Factors to be taken into

able to achieve this in AA v AEL which was heard by the District

account included the nature of the dispute; the merits of the

Judge in Manchester County Court on 8 October. The claim

case; the extent to which other settlement methods had been 62

attempted; whether the costs of ADR were disproportionately

disputes into the discussion, or by finding future opportunities for

high; whether any delay in setting up or attending the ADR

the software or licences, the mediator could have found solutions

would have been prejudicial; and whether ADR had a reasonable

that the parties had not considered.

prospect of success.

In summary, mediation would have had a reasonable prospect of

The instant case centred on an issue of contractual interpretation,

success and in such a case a party would be acting unreasonably

and a total of £3m was at stake. It was not a point of construction

if it rejected it on insufficient grounds. Thus, even though the

which would have affected the parties’ continuing relationship,

defendant reasonably considered that it had a strong case, it had

but was a major issue at the centre of a financial claim. In such

acted unreasonably in rejecting the claimant’s offer to mediate.

claims, a skilled mediator could assist by finding a solution to a

The claimant’s conduct in rejecting the settlement offer was,

dispute which the parties would otherwise have been unable to

similarly, conduct to be taken into account. The defendant’s

settle. Nevertheless, the defendant had reasonably considered

refusal to mediate had deprived the parties of the opportunity

that it had a strong case and where a party faced an unfounded

of resolving the case without a hearing, but so had the claimant’s

claim and wished to contest it rather than buy it off, the court

failure to accept the defendant’s offer. The fair and just outcome

was to be slow to characterise that as unreasonable conduct. The

was that neither party’s conduct should modify the general rule

fact that a party reasonably believed that it had a watertight case

on costs. The claimant was therefore to pay the whole of the

might well be sufficient justification for a refusal to mediate. That

defendant’s costs, to be assessed on the standard basis.

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.

On balance, the defendant’s reasonably held view that it had a strong case provided some limited justification for its refusal

Astonleigh Residential

Care Home

v Goldfarb

[Lawtel

10/10/2014] The second case under this heading is Astonleigh Residential Care

to mediate. Moreover, it had made a “without prejudice save

Home v Goldfarb [Lawtel 10/10/2014].

as to costs” offer which the claimant had rejected. Had the

In the substantive proceedings, the respondent had accepted 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 63

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 of a situation in which a Part 36 offer had been accepted and a party was in the position of seeking a costs order and was therefore not practically in a position to seek an interim 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.

64

3. Liability Ramirez v Maheshwari [Lawtel 2/05/2014] From Issue 017 In Ramirez v Maheshwari [Lawtel 2/05/2014] the claimant had wanted to cross the road to reach her partner who was in a stationary vehicle facing west. The vehicle was just ahead of a

caused by the thoughtless manner in which the claimant had entered the defendant’s path.

Comment This is another in a line of recent cases which illustrates that drivers will not be held liable where the movement of a pedestrian into the path of the car is sudden and unexpected.

bus. The defendant was driving west along the same road and proceeded towards the rear of the bus. The traffic was slowmoving and in some cases stationary. The defendant drove into the gap between the oncoming line of cars and the bus. The claimant emerged from that gap and the two collided. The

RTA Wheeler v Chief Constable of Gloucestershire Constabulary [Lawtel 19/12/2013]

weather conditions were sunny, the ground was moist and the sun

From Issue 001

was low in the sky; which caused some reflection from the road.

The case of Wheeler v Chief Constable of Gloucestershire

The accident was captured on CCTV. The defendant’s evidence at trial that he had been travelling at 15 miles per hour towards the bus was supported by expert evidence. The defendant also gave evidence that his vision had not been compromised by the weather conditions and that he had checked his left-hand side before driving into the gap. An eyewitness gave evidence at trial and stated that the claimant had come from “out of nowhere” and that the defendant had no chance of stopping to avoid her.

Another eye witness, who was also in a vehicle facing west and was just ahead of the first witness, gave evidence that she had seen the claimant looking behind her and that she had run into the road without looking. Neither witness said that their vision had been affected by the sun.

The claimant submitted, in reliance on the expert report, that the dazzle of the sun in the road was the reason that the defendant had not seen her and that the weather conditions meant that he should have been travelling at no more than 10mph. Finding in favour of the defendant, the deputy High Court judge held that it was not without significance that neither eye witness had spoken of the dazzle factor of the sun. The defendant had

Constabulary [Lawtel 19/12/2013] illustrates the Court of Appeal’s reluctance to interfere with the findings of a judge who has heard the evidence.

The claimant/appellant had been driving a car with a passenger when his car collided with a police van driven by a police officer which was turning right across oncoming traffic. Both the claimant and his passenger suffered injuries and they brought a claim against the defendant/respondent for his officer’s negligent driving. The judge found that the officer had been negligent in failing to stop before he turned right or to check for oncoming traffic. He further found that the claimant had been driving at 55mph in a 30mph speed limit. He held that both parties had been negligent and apportioned liability at 50:50.

The claimant appealed. Submitting that the judge had reached an apportionment of liability which was not open to him on the facts and he had failed to give adequate reasons for his decision. He argued that the officer had failed to stop; keep a proper look out; wait for a safe gap; or have regard to the painted lines on the road. He relied on Grealis v Opuni (2003) for the proposition that

said that the light had not concerned him and he had behaved

exceeding the speed limit did not make him more negligent.

accordingly. He had reduced his speed as he approached the

Rejecting the appeal, the Court of Appeal held that it was

bus and if he had looked left before going forward that would

reluctant to interfere with the apportionment of liability decided

not have been negligent. The claimant would have been visible

by a judge. The claimant’s submissions underplayed his own

to the defendant for a short space of time which would not

negligence in failing to comply with the speed limit and driving

have allowed him to take action to avoid hitting her. The weather

25mph faster. The speed of the car in question in Grealis was in

conditions had not affected the accident; the accident was 65

the 30s. The officer’s negligence was two-fold, not four-fold: he

been 0.65 would be determinative of the case. The photographs

had failed to stop before turning or to keep a proper look out.

from the scene and police reports all indicated patches of ice

The judgment was short but it was impossible to think that the

on the road. The temperature had been below zero and no skid

judge had failed to have regard to the duties on both parties in

testing had occurred because conditions were icy. There had

assessing their blameworthiness. His apportionment of 50:50 was

been patches of ice on the road and a coefficient of 0.65 was

open to him having heard the witnesses and the Court of Appeal

not reliable. The defendant’s expert evidence was preferred

would not interfere with his decision.

as the claimant’s expert evidence had included inappropriate

The defendant was awarded his costs of the appeal but both

content, including advocacy on his behalf.

parties had failed to produce a statement of costs as was

The circumstances had been highly unusual. Pedestrians crossing

required under CPR PD 44 so that the court could not summarily

dual carriageways were relatively less common occurrences. The

assess the costs. In light of the stricter approach to be adopted

claimant had stepped out and then retreated, so that the traffic

to the failure to comply with rules following Mitchell, the

had been visible to him. He had given the impression that he

defendant was ordered to pay the costs of a detailed assessment.

had seen the traffic approaching. It was more likely that he had

Comment The way in which costs were dealt with in this case serves yet again to illustrate just how rigorously the courts are enforcing compliance with CPR. A second case under this heading is Horner v Norman [Lawtel 20/12/2013]. The defendant, whilst driving her car on a dual carriageway, had struck the claimant, a pedestrian, when he ran out onto the road. The defendant’s evidence, supported by a witness, was that she had braked lightly upon seeing the claimant approach the dual carriageway, but ceased braking once he had retreated slightly. She further stated that she was forced to perform an emergency stop once he then sprinted into the road, but she clipped him. Experts for both

decided to beat the traffic, rather than having forgotten the side of the road on which cars drove. There was no evidence that he was drunk and he had not checked to his right before attempting to cross. The defendant had been driving at a modest speed, had kept a proper look out and had twice reacted to the claimant’s presence. She had braked as hard as she could and the court did not accept that she had applied the brakes too late. There was nothing more that she could have done and her actions were those of a reasonably competent and prudent driver. Although there were often situations where the mathematics meant that the driver.

Comment

parties agreed that the collision had occurred at a speed of 30

Although it is a first instance decision on its facts, this case

miles per hour. The claimant’s expert stated that the likely

will give heart to defendants. It shows that where a driver and a

friction coefficient of the road had been 0.65, consistent with a

pedestrian see each other but there is still a collision, the courts

damp road, so that the calculations meant that the defendant

will not always find that the motorist’s duty was a higher one and

could have stopped in time for the claimant to reach the

that she must bear some liability.

central reservation. The defendant’s expert preferred a lower coefficient, consistent with patches of ice on the road as identified by police reports, so that the defendant had done

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all that she could to stop in time. The issues were whether (i)

Cridland (Protected Party) v Stagecoach (South) Ltd [Lawtel

the coefficient of the road had been 0.65 and, if so, whether that was determinative of the defendant’s negligence; (ii) the accident itself proved the defendant to have been negligent; (iii)

23/01/2014] Train v Secretary of State for Defence [Lawtel 23/01/2014]

the claimant had been contributorily negligent.

From issue 004

The deputy High Court judge held that he did not share the

In Cridland (Protected Party) v Stagecoach (South) Ltd [Lawtel

claimant’s view that a finding that the coefficient of the road had

23/01/2014] the claimant had been a passenger on a double

66

deck bus being driven by the defendant’s driver. Ahead of the bus

CCTV footage the driver’s gestures were not provocative or abusive,

and heading in the same direction was a youth who was riding a

in any case the youth did not see them. It was the honking of the

push scooter. When the bus was a few feet from the youth it was

horn and not the proximity of the bus that caused the youth to

braked violently and the claimant was thrown forward suffering

make his gestures. The driver was aware of the oncoming vehicle

serious injuries. The defendant argued that the driver had seen

which was visible from the CCTV evidence. The youth was aware

the youth ahead of him, maintained observation and when he

of the bus but chose to remain in the road. His reaction was not

was a car length away slowed down to 11 mph, and could not

one of alarm but a threat of violence. No reasonable driver could

overtake the youth because of an oncoming vehicle. He sounded

have predicted that the youth would have reacted in the way he

his horn so that the youth could move aside and that his intention

did. The driver’s action was a reasonable reaction of a reasonable

was to make him aware of his presence. The youth’s unexpected

bus driver. He was not speeding and at the critical point he slowed

reaction was to make a gesture which appeared to be to throw

down and braked. It was the youth’s gesture that caused him to

his scooter into the air and motioning to throw it at the bus’s

brake and he had no alternative but to brake. The driver had not

windscreen; and that the driver’s action in braking was to avoid

allowed himself to become cross with the youth. The accident was

that happening. The youth then carried on and disappeared from

caused by the youth’s anti-social behaviour in making the gesture

the scene. Evidence was given by a number of passengers and

that he made.

there was a CCTV recording from the bus. The claimant himself was too unwell to give evidence and had no memory of the accident. Evidence was given by his partner and litigation friend who had also been on the bus. The partner’s evidence was that before and after the sudden braking the driver had made abusive and obscene gestures at the youth and had allowed himself to become cross with him. The driver gave evidence on behalf of the defendant, along with a number of other witnesses who had been passengers on the upper deck. The trial was in respect of liability only.

Dismissing the claim, the deputy High Court judge held that where the calimant’s partner’s evidence conflicted with the defendant’s driver’s, the driver’s evidence was to be preferred. The defendant’s witnesses evidence was not internally inconsistent. The driver’s evidence was consistent with that of the other witnesses whose view was that the accident was the youth’s fault. None of those witnesses criticised the driver. If he had not sounded the horn the youth would have carried on. The youth’s refusal to get out of the way was clear anti-social behaviour. The defendant had employed the driver for seven years; at the date of the accident he was experienced and properly trained. The driver was a credible witness and had a good personnel record. The defendant’s other witnesses were all on the upper deck of the bus and had a good view of the accident. The youth aggressively swung himself in the air bringing the scooter near the bus’s windscreen. The driver’s reaction in those circumstances could not be faulted. From the 67

Train v Secretary of State for Defence [Lawtel 23/01/2014].

The claimant’s deceased husband had been riding his motorcycle down a road on a barracks when he crashed into the side of a minibus driven by a soldier, which had begun to turn right in front of the deceased in order to enter a filling station. The soldier said that he had observed the road and seen the deceased, but had concluded that he had enough time to make the turn as the motorcycle was far away, and that he had not seen the deceased after that. Witnesses at the scene gave evidence that the deceased had been travelling very fast and that he had glanced momentarily to the left towards a group of soldiers before seeing the minibus ahead and braking sharply. It was conceded that the deceased had been driving in excess of the speed limit. The issue was who had caused the accident.

Finding in favour of the claimant but with a finding that the deceased had been contributorily negligent, the deputy High Court judge held that the starting point was that the deceased had the right of way and that the soldier should only have turned if it was safe to do so. The deceased was travelling certainly in excess of 30 mph and probably in excess of 40 mph before he realised that the minibus was ahead. The soldier had been a consistent witness throughout and his account that he had observed the road before turning right and genuinely believed that there was sufficient time to run was accepted. By driving over the speed limit and glancing to the left at the soldiers the deceased was unable

to stop in time. Nevertheless the soldier should not have turned

defendant’s assertion that he had been travelling at between 10

until he was satisfied of the mortorcycle’s speed. A prudent driver

and 15 mph that he had been driving at 25 mph. The judge

would have waited until the deceased had passed unless he had

found that at the time of the collision the claimant’s car had

been sure of the motorbike’s speed. Although the soldier had said

been one foot from the verge and the defendant’s lorry two

that he was certain that he had enough time to make the turn,

feet from the verge, so that it had passed over two feet onto

the court was not satisfied that he had assessed how fast the

the claimant’s side of the road. He held that the defendant bore

deceased was travelling. He should have seen that the motorbike

additional responsibility as a lorry driver to be careful as he had

was going in excess of 20 mph, and if in any doubt about that,

insufficient visibility around the bend, and that he had been

waited. The deceased was the principal but not the only author

travelling too fast. However, he also found that the claimant had

of his misfortune. Damages recoverable were to be reduced by

been 40% contributorily negligent because she was travelling too

80 per cent having regard to the deceased’s part in the accident.

fast around the bend.

Comment

Allowing the claimant’s appeal, the Court of Appeal held that it

It is a matter of semantics only but it is interesting that the judges in these cases both referred to the ‘prudent’ driver. In Stewart (Protected Party) v Glaze (2009) the trial judge stated that a driver’s actions had to be considered by reference to the standard of a reasonable driver, whereas in Boyle v Commissioner of Police of the Metropolis (2013) the judge covered both bases by using the term ‘reasonably prudent’ driver.

was unfortunate that the judge had said that his starting point for liability was 50:50 to start with the proposition that both parties were negligent was wrong. However, his additional comment that his position might change depending on what he made of the parties demonstrated that he had had in mind that the 50:50 position could alter. When he came to deliver his judgment that was more or less what he had done, although the parties were left wondering whether he had been prepared to shift sufficiently from his starting position.

RTA

The fact that the defendant was not credible could not help to

Gray v Gibson [Lawtel 06/03/2014]

decide the question whether the claimant had been negligent.

From issue 010

The finding that the lorry had been travelling at 25 mph was generous to the defendant, but that fact alone was not dispositive

It is almost inevitable that lorries on country lanes will encroach

of the case. The judge had accepted the claimant’s evidence

into the other carriageway. But what happens if there is a

that she was familiar with the road and was used to meeting

collision with a car travelling in the opposite direction? That was

and passing large vehicles on it. He had not, however, considered

the issue in Gray v Gibson [Lawtel 06/03/2014].

whether she could have expected to meet a large lorry over

The appellant/claimant had been driving her car along a single-carriageway country lane with a national speed limit. The defendant had been driving a lorry in the opposite direction. The vehicles collided on a bend where the road was only sixteenand-a-half feet wide: The lorry was eight-and-a-half feet wide and had inevitably encroached into the claimant’s lane. She issued proceedings against the defendant seeking damages. In a case management conference, the district judge indicated that his starting point for liability between the parties was “50:50”, until

two feet onto her side of the road. She could not be blamed for failing to foresee that eventuality. A lorry driver crossing over the middle of the road owed a particular duty of care and was not to drive at a speed at which he could not stop within a short distance. The claimant could not be criticised for failing to foresee that the driver of a large lorry would not take that obvious precaution, and she could not be described as having driven dangerously. The defendant was, accordingly, wholly liable for causing the accident.

he saw what he made of them. At trial, he found that the claimant had been driving at 30mph and, having rejected the 68

RTA Gupta v Armstrong and another [Lawtel 27/05/2014] From Issue 20 Although all cases are decided on their facts, Gupta v Armstrong and another [Lawtel 27/05/2014] is another case in which a court has held that a driver should not be found liable when the movement of a pedestrian has been sudden and unexpected.

The claimant, a student, was making his way from one campus to another. The second defendant provided coaches for that purpose. The first defendant was driving a coach that the claimant had wanted to board and had run over his leg. The claimant’s case was that he was on the opposite side of the road to the first defendant, directly opposite his window and had made eye contact with him and waved to signal that he wanted to board the coach. The claimant then walked into the road and approached the front door of the coach, again making eye contact with the first defendant. The driver pulled away and reached the end of the road and began turning left and then stopped in the middle of the road. The claimant, assuming that the first defendant had stopped for him, banged on the side of the coach and on the nearside passenger door. He made eye contact with the first defendant, but the first defendant looked away and reversed. The claimant stepped back tripping over the front wheel and the coach ran over his leg. The first defendant’s case was that he had driven towards the junction and prior to turning left had checked his mirrors, checked for oncoming traffic and taken care to ensure that he did not mount the curb as he turned. He stated that he had been travelling at less than four miles per hour when he turned left in one continuous motion. He felt a bump and got out of the coach and saw the claimant on the ground.

Four eyewitnesses gave broadly consistent evidence supporting

Dismissing the claim, the deputy High Court judge held that the accident had not been the first defendant’s fault. The claimant had seen the coach driving away and had run along the pavement to catch up with it, but no eye contact was made with the driver. The first defendant stopped at the give way sign and pulled out slowly at a maximum of four miles per hour to turn left, and the claimant ran towards the front of the coach but would not have been visible until he was close enough to touch it. The court was satisfied that the claimant tapped the coach and that he was by the front wheel and had attempted to go towards the front door as the coach was turning left. If he had reached the front door it would have been the rear of the front door and he would have only been there for a fraction of a second. Had the first defendant spotted him at that point there would not have been enough time to avoid the accident; at that stage it was inevitable. The claimant then stepped back tripping over the front wheel, fell into the road and the coach drove over his leg.

The first defendant had not been negligent. He had taken care to look and use his mirrors before moving off, concentrated on the traffic, and ensured that he did not encroach on the pathway when turning. No eye contact had been made with the claimant.

Had the first defendant seen the claimant when eye contact was supposedly made on two occasions, he would have stopped. The first defendant had not been negligent in not seeing or hearing the claimant. He had tapped the window and not banged it and there was likely to have been noise inside the coach. Whilst the court was sympathetic towards the claimant, the first defendant had not been at fault. Accordingly, the claim was dismissed. If it had been necessary to consider contributory negligence, the instant case would have been one of those exceptional cases where the claimant would have been deemed to be more than 50 per cent negligent.

the first defendant’s case which was that he had pulled out slowly into the road to turn left, the claimant had run into the road and tapped the side of the coach, the first defendant had not stopped or reversed, the claimant tripped on the wheel of the coach falling backwards, and the coach ran over him. Expert evidence stated that the claimant would have to have been very close to the coach before he would have been seen by the driver and that he would not have been in the first defendant’s view when he was by the front wheel.

69

RTA Beaumont and another v Ferrer (2014) EWHC 2398 (QB) From issue 029 The case of Beaumont and another v Ferrer (2014) EWHC 2398 (QB) sees the court considering the doctrine of ex turpi causa in relation to claims for personal injury.

The claimants, who were both 17, had formed a plan with four

Act by participating in a joint enterprise pursuant to which their co-

other youths to take a taxi from Salford to Manchester city centre

conspirators had already taken off without payment. The correct

and make off without paying the fare. When they reached the city

approach to deciding whether the doctrine of ex turpi causa

centre, three of the youths got out of the taxi and ran off without

applied was to ask whether the criminal act was no more than

paying. The defendant then drove on. The claimants tried to get

the occasion for the damage or whether the damage was caused

out of the taxi as it was moving, fell and sustained serious injuries.

by the criminal act; if the latter was the case, the doctrine would

They argued that the defendant owed a duty of reasonable care to his passengers, all comparatively young people, to ensure their safety and well being; that the doctrine of ex turpi causa did not apply, as there was no relevant turpitude: no offence under S3 Theft Act 1978 had been committed, as the defendant left the scene before he gave the group time or opportunity to pay the fare; even if they were engaged in criminal conduct leading to their injuries, the doctrine of ex turpi causa did not apply in the circumstances of the case; their offending was not of such gravity that it should engage the public policy of ex turpi causa.

Rejecting the claims the High Court judge held that the defendant had done nothing to put the claimants in the position where they were poised to exit the taxi, and he did nothing to lead to their decisions to leave the moving taxi. Further, the execution of the criminal joint enterprise, with three youths already having left the taxi and run away, put him in a dilemma. He drove on partly because he wanted to do something to impede the youths left in the taxi from exiting and making off without payment; fear also played a part (he had been stabbed during an attack by another group of youths). It had been argued that at that point the defendant should have allowed all the youths to leave the taxi and resigned himself to the inevitable loss of the fare and the great

apply. This was a plain case where the damage was caused by the criminal conduct of the claimants. That conduct was not carried out on the spur of the moment. There was a plan jointly to “jump” the taxi, and that plan was put into effect. Three of the group had already left the taxi and taken off before the defendant drove on.

The claimants at that point had every opportunity to recognise their dishonest intent, to reseat themselves in the taxi and to travel on safely. Instead, they deliberately chose to follow their companions in the carrying out of the joint criminal enterprise, and in each case chose to jump or step out of the moving taxi.

Their only reason for doing so was to evade payment of the fare. Applying ex turpi causa here tended strongly to promote the public policy that underpinned the doctrine. Dishonest evasion of a taxi fare should not be dismissed as just another inevitable expense of the driver, but should be seen for reasons of public policy as a pernicious and reprehensible practice that tended to erode the efficiency, and raise the costs, of a service that was valuable to the community. It could also risk public disorder if taxi drivers, responding to a crime that was easily perpetrated but difficult to police, resorted to their own counter measures.

In the circumstances, the claimants were in any event precluded by the doctrine of ex turpi causa from succeeding in their claims.

unlikelihood of any of the offenders being apprehended and sanctioned f or their wrongdoing. Even if he should have followed that course and in not doing so was at fault, the failure followed

RTA

from the criminal intentions and actions of the youths, and any

Landau v Big Bus Co Ltd and another

degree of fault was simply overwhelmed by those intentions and

From Issue 030

actions. Even if the defendant was in breach of his duty of care by driving on as he did, that breach did not cause the claimants’ injuries. The conduct of each of them in jumping or stepping out of the taxi broke the causal connection between such fault and the damage. This was a case where justice was served by holding that the claimants in substance brought about the injuries themselves.

The claimants had committed an offence under S3 of the 1978

In this publication’s predecessor, Greenwoods’ PI Alert 370, we reported the first instance decision in Landau v Big Bus Co Ltd and another. The case has now been to the Court of Appeal and is reported at (2014) EWCA Civ 1102.

The first defendant’s driver had been driving a tourist bus, the second defendant had been driving a car and the claimant had been riding a motor scooter when they approached a junction.

70

They had all stopped at traffic lights before negotiating a sharp

The judge was not mistaken in his view that the drivers would

left-hand turn. The claimant’s scooter became trapped between

have been entitled to assume that the claimant would hold back

the rear nearside of the bus and the rear offside of the car. He

as they negotiated the turn.

sustained a serious injury which necessitated a below-knee amputation. The judge found that he had not been in the position he said he was at the lights so that it was more likely that he was

RTA

in both of the drivers’ blind spot. He found that neither defendant

Gray v Bothwright [Lawtel 10/07/2014]

had been negligent and that, even if they had seen the claimant at the lights, they would have been entitled to rely on him to have had regard to the developing situation and to have held back.

The claimant appealed, submitting that the judge was wrong to have found that he was in the drivers’ blind spot when such a scenario had not been canvassed and was not supported by the evidence; that both defendants had taken all reasonable care when turning into the junction, as the first defendant’s driver should have seen him sooner and the second defendant’s position on the road had created the danger; and that even if the claimant had been visible, they were entitled to assume that he would hold back.

Dismissing the appeal, the Court of Appeal held that there was a well-recognised reluctance of appellate courts to interfere with findings of primary fact which depended on a judge’s assessment of witnesses he had heard give evidence. The judge had made it clear that he was unable to make any positive finding as to the claimant’s position at the lights albeit that he considered it more likely than not that he was in a blind spot. The crucial finding was that the claimant was not in the position where he said he was, which meant that he had failed to prove his case that the defendants should have seen him at the lights. It was not a case where the judge’s conclusion was based on an alternative scenario introduced by him and not canvassed with the parties. The evidence did not undermine the judge’s suggestion of a blind spot.

There was nothing in the judgment or the evidence to justify the conclusion that the first defendant’s driver ought to have seen the claimant’s scooter sooner than she did. The judge was correct to conclude that she drove with reasonable care. The overall evidential picture was not clear-cut but the judge had grappled with it conscientiously and there was no proper basis for interfering with his evaluation. He was not wrong to find that the second defendant’s driving had not fallen below a reasonable standard.

71

From Issue 27 Two cases illustrate the circumstances in which the Court of Appeal will interfere with a judge’s decision on the facts. In the case of Gray v Bothwright [Lawtel 10/07/2014] the appellant/ claimant had been driving towards a complicated junction which had 11 traffic lights controlling the flow of traffic. He was familiar with the junction and turned right when the lights turned green in his favour. He knew that the other lights would be red at that time and therefore did not check to see whether any cars were approaching. In fact the respondent/defendant had driven through a red light and a collision occurred. The claimant suffered neck and back injuries and brought proceedings alleging that the accident had been caused by the defendant’s negligent driving.

The district judge found that although the defendant had driven through a red light, he had not been travelling significantly in excess of 30mph and the accident had been solely caused by the claimant’s negligence in failing to check for vehicles when turning right. He relied on Whittle (2006) and found that the occurrence of the accident was not within the scope of the duty of care which the defendant breached when acting negligently. In case he was wrong, the judge assessed general damages. The claimant’s first appeal was dismissed by a circuit judge.

Allowing the claimant’s further appeal in part, the Court of Appeal held that the claimant had made a positive decision not to check for traffic when he turned right because he inferred that the traffic light would be red and he assessed that no vehicles would be approaching. His decision to cross the carriageway without looking was an act of sheer folly. It was not sensible to assume without checking that no car was approaching. He had been negligent in failing to check for oncoming traffic. However, his actions had not been the sole cause of the accident. The defendant should not have been where he was at the moment of impact. The instant case differed from Whittle as the whole

purpose of the 11 traffic lights was to ensure a regular flow of

negligent, preferring his evidence over the claimant’s. He noted

an appropriate number of vehicles through the junction at each

that the CCTV footage showed her standing, not close to the

stage. By entering the junction when he did, the defendant created

front of the bus, talking to a friend. It also showed the red vehicle

the danger which the lights were designed to prevent. The

passing the bus in the nearside lane and starting to move across

damage that the claimant sustained was within the scope of

to the offside lane in front of it. Time stamps on the stills showed

the duty which the defendant owed to other road users when he

a four- second gap between the red vehicle starting to cross the

crossed the red light. He had been found to have been travelling

white lines dividing the lanes and the bus coming to a stop. The

at just over 30mph but he should have slowed down when he

judge concluded that the red vehicle had caused the driver to

saw the claimant in his path. The onus was on the defendant to

brake and that his braking had not been sharp or dramatic.

be particularly careful when driving through the junction as he

He rejected the claimant’s argument that the driver should have

should not have been there at that time. The defendant was at

braked either two or four seconds earlier than he did, concluding

fault in failing to slow down as he approached the junction. Both

that the driver of the red vehicle was solely responsible for the

parties had driven badly and liability was apportioned 50:50.

accident.

The claimant’s appeal in relation to quantum was dismissed.

Rejecting the claimant’s appeal, the Court of Appeal held that an appellate court had to exercise the greatest restraint before

Christian v South East London & Kent Bus Co (2014) EWCA Civ 944 The second case is Christian v South East London & Kent Bus Co (2014) EWCA Civ 944. This case also shows the increasing importance of CCTV footage as evidence to assist in determining liability. (On this point see also Cridland (Protected Party) v Stagecoach (South) Ltd – Legal Watch: Personal Injury 4 29/01/2014).

The appellant/claimant had been a passenger on one of the respondent/defendant’s buses. The accident occurred when the bus was travelling in the offside lane of a two-lane road, approaching a queue of standing traffic. The claimant alleged that when the driver got close to the standing traffic, he performed a sudden emergency stop instead of slowing gradually. The claimant, who had been standing close to the front of the bus, had been thrown forward and another passenger had fallen on her.

As a result, she sustained a back injury. At trial, the central question was whether the driver had driven negligently. The judge heard oral evidence from the claimant and defendant and he viewed

overturning findings of fact made at first instance. There was no principled basis on which the instant court could interfere with the judge’s careful findings of fact. The judge had had the advantage of hearing and assessing the driver’s evidence and he had been assisted by the CCTV footage and stills. He had been in a far better position to assess the evidence than was the instant court. His factual conclusions could not be said to be so obviously wrong or so outside the band of reasonable conclusions open to him that his judgment should be set aside. Nor could it be said that he had taken irrelevant facts into account or wrongly applied the law.

The critical events had taken place over a period of some four to five seconds. The photographic evidence did not demonstrate that the driver had been negligent in not braking sooner and his evidence would have been key in informing the judge’s decision.

The judge had been entitled to conclude that although, with hindsight, the driver might have taken another course, he was not to be judged by too critical a standard. He had acted on the spur of the moment by taking evasive action. It would be wrong for the instant court to interfere with the judge’s findings of fact, even if a different judge might have come to a different view.

CCTV footage and stills taken by cameras on board the bus. The driver denied that he had approached the queue of traffic without slowing down. He claimed that a red vehicle travelling in the nearside lane had tried to cut in front of him, forcing him to pull out towards the central reservation and perform an emergency braking manoeuvre. The judge found that the driver had not been 72

Vicarious Liability Mohamud v Wm Morrison Supermarkets Plc (2014) EWCA Civ 116 From issue 007 The case of Mohamud v Wm Morrison Supermarkets Plc (2014) EWCA Civ 116 sees the court placing a limit on an employer’s liability for the actions of its employee.

The claimant/appellant appealed against the dismissal of his

to the closeness of the connection between the tort and the employee’s duties, viewed in the round.

The fact that the assault had taken place while the employee was on duty at his place of work was relevant, but not conclusive. The mere fact that the employment provided the opportunity, setting, time and place for the assault was not necessarily sufficient to fix the defendant with liability. Moreover, the fact that the employee’s job included interaction with the public did not, by itself, provide the necessary connection. Some factor or feature going beyond

claim that the defendant/respondent supermarket operator

interaction between the employee and the victim was required.

was vicariously liable for an assault perpetrated by one of its

The decided cases examined the question of close connection

employees.

The claim arose out of an incident at a petrol station kiosk run by the defendant and staffed by three of its employees. The relevant employee’s duties involved assisting customers and ensuring that the shop and petrol pumps were in good running order. He had specific instructions not to confront angry or abusive customers, and he had had training on that subject.

On the day in question, the claimant visited the kiosk as a customer and asked, politely, if there was a printing facility. The employee responded by abusing and assaulting the claimant, for no apparent reason and despite his supervisor’s attempts to stop him. The issue at trial was whether there was a sufficiently close connection between the assault and the employee’s employment to make it fair to hold the defendant vicariously liable. The judge found that there was not. He found that the attack on the claimant was brutal and unprovoked, and that the employee had carried it out purely for reasons of his own. He held that the defendant was not vicariously liable. In his appeal, the claimant submitted that the assault had arisen from his customer/sales assistant interaction with the employee, and that it had therefore been committed within the parameters of the employee’s duties, fixing the defendant with liability.

Rejecting the appeal, the Court of Appeal held that the judge had correctly focused his attention on the test set out in Lister v Hesley Hall Ltd (2001). The question was whether the connection between the assault and the employment was sufficiently close to make it fair and just to hold the defendant vicariously liable.

Each case turned on its own facts, and the authorities from Lister onwards made it clear that careful attention had to be given 73

by reference to factors such as the granting of authority, the furtherance of an employer’s aims, the inherent possibility of friction or confrontation in the employment, and the additional risk of the kind of wrong occurring. Those approaches represented different ways of answering the question, and they were illustrative of the necessary focus. It was important to recognise that, on the judge’s findings, the employee had no responsibility for keeping order and he had committed the assault purely for reasons of his own. He had not been given duties which involved the clear possibility of confrontation and the use of force, nor had he been placed in a situation where an outbreak of violence was likely. Rather, his duties were circumscribed and he had been instructed not to engage in any confrontation with a customer.

There was nothing to bring the case within the close connection test so as to enable a finding of vicarious liability. The law was not yet at a stage where the mere fact of contact between a sales assistant and a customer, which was plainly authorised by an employer, was of itself sufficient to fix the employer with vicarious liability. Were the defendant to be held liable for the employee’s assault on the claimant, it would mean that in practically every case where an employee was required to engage with the public, his employer would be liable for any assault which followed on from such an engagement. That was a step too far.

Vicarious Liability Cox v Ministry of Justice (2014) EWCA Civ 132 From issue 008 We feature the case of Mohamud v Wm Morrison Supermarkets Plc as an example of a court limiting an employer’s vicarious liability for the actions of an employee. In Cox v Ministry of Justice (2014) EWCA Civ 132 the decision went the other way and, as in the case of Various Claimants v Institute of Brothers of the Christian Schools cited in the judgment, the concept of ‘employment’ was extended to establish liability.

The claimant/appellant appealed against a decision dismissing her personal injury claim against the defendant/ respondent.

She had worked as the catering manager at a prison. When unloading a consignment of food under her supervision, a prisoner had dropped a sack causing a food spillage. The claimant instructed all of the prisoners to stop working until the spillage had been cleared but, negligently and contrary to her instructions, another prisoner continued working and dropped a sack onto the claimant’s back while she was kneeling on the floor clearing the spillage. The judge concluded that, although the defendant’s relationship with the relevant prisoner exhibited some salient features of the employment relationship, including the fact that the prisoner was compensated for his kitchen work, an imposition of vicarious liability was not justified. In particular, he referenced the fact that employment was a voluntary, mutual relationship, unlike prisoners’ work, the prisoner’s work had not furthered the defendant’s business undertaking, and although there was a relationship of control, it arose from common sense and the fact that duties were owed by the ministry to its prisoners.

The judge also concluded that the defendant was not in breach of its direct personal duty to the claimant because it was not the prisoner’s lack of training in manual handling operations that had caused the accident but his disregard for the claimant’s instructions and the obvious risk of injury.

The claimant appealed. Allowing the appeal, the Court of Appeal held that adopting a principled, coherent and incremental approach, it was necessary to apply the features of the traditional relationship giving rise to vicarious liability, and to ask whether the features of the instant case fell within them so that it was fair and just to impose vicarious liability on the defendant. That

involved asking whether the relationship between the prisoner and the defendant was one akin to employment. When one carried out that task and applied the relevant features identified in Various Claimants v Institute of Brothers of the Christian Schools (2012), it was clear that those features distinctly applied in the instant case. In particular, the features which applied were the ability to compensate the prisoner for his work, the fact that his employment by the defendant had created the risk of the injury being caused to the claimant, and the fact that the prisoner would have been under the defendant’s control. The work carried out by the prisoner and the other kitchen workers was essential to the functioning of the prison and was different in nature from the activities of those prisoners engaged in education, training or on offending behaviour programmes. The work carried out by the prisoner relieved the defendant from engaging employees at market rates and with all the concomitants of an employment relationship, and it was clearly done on the defendant’s behalf and for its benefit. There was no reason that the defendant should not take on the burden of the prisoner’s work as well as the benefit. As in Various Claimants v Institute of Brothers of the Christian Schools, the differences between the prisoner’s relationship with the defendant and the normal employment relationship, including the fact that the prisoner was bound to the defendant by an imprisonment sentence and not a contract, and the fact that his wages were nominal, rendered the relationship between him and the defendant, if anything, closer to that of an employer and its employees: far from there being mutuality or consent, there was an element of compulsion in engaging in the activity directed by the ministry as the quasiemployer. The defendant was accordingly vicariously liable for the claimant’s injury.

The judge’s findings as to the likely content of any training and as to the consequences if such training had been provided were unassailable on both duty and causation. The judge was not obliged to draw any inferences against the defendant. He was entitled to conclude that the provision of training would not have caused the prisoner not to ignore both the obvious risk of injury and the claimant’s express instructions.

(Per Beatson, L.J.) It was understandable that considering whether a relationship was akin to employment could lead to a focus on whether the relationship was voluntary, but that focus 74

could mislead if it was taken as a bar to vicarious liability rather

it most likely that the lock had not been fully in position and that

than simply a factor to be taken into account. While the existence

the claimant had overreached himself, applying a degree of

of control was important, vicarious liability did not depend solely

force to a hatch door that was only partially supported. He

on it: what one was looking for was whether the person who

concluded that if the deceased had not involved himself in the

had committed the negligent act was so much part of the work,

work performed by the claimant, there would have been no basis

business or organisation of the person or entity who it was said

for a finding of negligence, but that he had brought himself

should be vicariously liable that it was just to make the latter

into close proximity with the claimant by virtue of his proposal.

answer for the negligence of the former.

Leaving his position to answer the phone, the deceased had failed to exercise his duty of care to the requisite standard and was liable to the extent of a third. The issues on appeal were

Occupiers’liability

(i) the cause of the claimant’s fall; (ii) the alleged duty of care by

Biddick (deceased) v Morcom (2014) EWCA Civ 182

the deceased; (iii) the extent of contributory negligence by the

From issue 009 Biddick (deceased) v Morcom (2014) EWCA Civ 182 is a case which deals with a householder’s liability towards a contractor, injured whilst working at his property. It illustrates the level of involvement required on the part of the householder to attract liability for the contractor’s injuries.

The appellant/defendant, t h e personal representatives of the deceased householder, appealed against a judgment that his estate was liable to the respondent/claimant in negligence. The claimant cross-appealed against a finding that he was two-thirds contributorily negligent.

claimant.

Rejecting both the appeal and cross-appeal, the Court of Appeal found on the evidence, it was impossible to say that the judge had arrived at a conclusion regarding the cause of the claimant’s fall which had not been open to him.

The deceased had assumed responsibility, not for bearing the claimant’s weight if he happened to fall on the hatch door, but for undertaking to ensure that the latch remained closed. In involving himself in a potentially hazardous activity, he put himself in a degree of proximity to the claimant such that it was foreseeable that if he neglected his task, the hatch might work itself open and cause the claimant to fall and suffer injury. It was fair and

The claimant, a multi-skilled tradesman, had been seriously

reasonable to find that a duty of care had arisen. Even though

injured while fitting insulation in the deceased’s loft. Entry to the

the deceased’s concern had been vibration, and vibration had not

loft was via a ladder through a hinged hatch door, which opened

been found to be the cause of the hatch opening, the deceased

by being pulled downwards with a long pole. A hook in the pole

had nevertheless chosen to abandon his post, which was a breach

could be used to lock the door. The deceased, who was 80 years

of his duty of care. While reliance was a prerequisite in economic

old, suggested that while the claimant was insulating the inside

loss cases, it did not matter that the claimant had not relied on

of the hatch door, he, the deceased, would stand underneath,

the deceased’s input. Once the deceased had undertaken to

keeping the door in the locked position with the pole to prevent

ensure that the hatch remained closed, he had a duty to perform

the mechanism working itself loose from the vibrations of

that task carefully even if the claimant did not see his role as an

the claimant’s drill. The claimant thought that was a fanciful

element in his own safety.

possibility, but agreed to the proposal. The claimant fell through the loft aperture when the deceased left his position to answer the phone.

The judge’s reasoning for the apportionment of liability was entirely sound: The deceased had been negligent in failing properly to perform the small task which he undertook, but the

The claimant’s primary case was that the hatch opened as a result

claimant was principally to blame for the unsafe method of work

of vibration. The judge rejected that claim. He also rejected the

which he chose to adopt.

possibility that the claimant had fallen on the door. He thought 75

Occupiers’ Liability Stagecoach South Western Trains Ltd v Hind and another (2014) EWHC 1891 (TCC) From Issue 23 Although no personal injury was involved, the case of Stagecoach South Western Trains Ltd v Hind and another (2014) EWHC 1891 (TCC) is relevant to such claims.

The claimant train operator claimed the cost of repairing damage to a train, and other consequential costs, against the first defendant landowner and the second defendant tree surgeon after a tree on the first defendant’s land fell onto a railway line.

The authorities indicated that an ordinary landowner, required to act reasonably and prudently, was obliged to carry out regular preliminary/informal inspections of the trees on his or her land, particularly where those trees bordered a highway, a railway or the property of another. The first defendant was capable of carrying out a meaningful 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

The tree was at the end of the first defendant’s garden in an area

reasonable and prudent landowner was not obliged to inspect the

that was uncultivated and covered with ivy, brambles and nettles.

trunk of an apparently healthy tree which was difficult to access

The tree was an ash and about 150 years old. It was originally

and covered in ivy.

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 tree and would

There was nothing that should have alerted the first defendant, or put her on notice, that the tree was anything 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.

have discovered the crack and the decay.

Finding in favour of the defendants, the High Court judge held that

Occupiers’ liability

a reasonable and prudent landowner was not obliged, as a matter

Butcher v Southend-on-Sea Borough Council [Lawtel 3/11/2014]

of course and without any trigger or warning sign, to pay for an arboriculturalist to carry out periodic inspections of the trees on

From Issue 039

his land. A closer inspection by an expert was only required where

In Butcher v Southend-on-Sea Borough Council [Lawtel

something was revealed by an informal or preliminary inspection

3/11/2014] the claimant had been visiting her parents who

which gave rise to a cause for concern.

76

had lived for some years in sheltered housing owned by

lay down any general principle. Each case turned on its own facts.

the defendant local authority. The parents’ accommodation

It was a point in favour of the local authority that there had been

overlooked the back entrance to the property and she used that

no previous accident, but on the other hand the hazard had been

entrance. When leaving she had walked along a tarmac path which

rectified after the accident without difficulty or expense. The

ran diagonally from the entrance. Beside the path was an area of

question for the judge was whether before the accident it was

patchy grass. There was a difference in level between the path and

foreseeable that someone would inadvertently step off the path

the earth of just over two-and-a-half inches. The judge found that

and lose their balance because of the drop. It could not possibly

the edge of the path was clear and did not need to be marked. He

be said that the judge was wrong to find that that was foreseeable

found that the claimant had stepped half on and half off the path

and to go on to find that the local authority had not taken such

and fallen. Shortly after the accident the local authority inspected

care as was reasonable in all the circumstances to see that visitors

the area, concluded that dry weather had caused the earth to

were reasonably safe. There was no error of law.

shrink from the edge of the path and instructed contractors to fill in the dip with topsoil to bring the surrounding aea up to the level of the path. The judge held that the defendant was in breach of its

Employers’ Liability

duty as an occupier, it was foreseeable that someone might lose

Sloan v Rastrick High School Governors (2014) EWCA Civ 1063

their footing at the edge of the path, as had happened, because of the change of levels. The defect was obvious and easily remedied.

From issue 029

The hazard would have been seen by the claimant if she had been

The case of Sloan v Rastrick High School Governors (2014) EWCA

paying attention. She was held 50% contributorily negligent.

Civ 1063 provides a very detailed analysis of a claim brought

The defendant appealed and argued that the judge had given insufficient weight to the fact that the manager and caretaker of the accommodation had a system of inspection and relied on

under Regulation 4(1) Manual Handling Operations Regulations 1992. Cases of this nature are often difficult to defend but here the defendant was successful.

Clerk and Lindsell on Torts where it was said that an occupier who

The appellant/claimant had been employed by the respondent/

reasonably acted on rofessional or semi-professional advice was

defendant as a learning support assistant. Her work involved

likely to escape liability, whereas failure to perform an adequate

pushing pupils between classrooms in their wheelchairs. She

risk assessment might well tip the balance in favour of liability.

began work on 1 September 2008 and spent her first five days

Dismissing the appeal, the Court of Appeal held that the issue of a system of inspection was relevant where a hazard suddenly developed, such as a spillage of oil on the path. The hazard at the edge of the path had not developed within minutes or hours or even days. Nor was it the kind of hazard, such as the risk of branches dropping from trees, which required a professional risk assessment. The drop at the edge of the path was obvious and had not been detected by the manager of the accommodation or the caretaker. The defendant relied on what was said in Clerk and Lindsell and on a disability discrimination audit which had not found anything wrong with the path. However, Clerk and Lindsell was not a checklist and no one knew what the state of the path and surrounding area had been when the audit was carried out.

The local authority said that the judge had not carried out the balancing exercise required by Beaton (2002), but that case did not 77

training and shadowing. On 17 September, she experienced pain after pushing a pupil in her wheelchair on a flat surface. She saw her GP and was prescribed pain relief. She left the defendant’s employment some weeks later. She claimed that she had suffered a soft tissue injury to her neck and shoulder, that she had ongoing pain, and that the injury was the cumulative result of her work up until 17 September. She claimed that the defendant had not complied with its duties under Regulation 4(1) Manual Handling Operations Regulations 1992. The recorder found that the claimant had suffered a strain injury on 17 September, resulting in symptoms over the next couple of weeks, and that any further symptoms arose from unconnected degenerative changes. She found no breach of the Regulations and ordered the claimant to pay the defendant’s costs.

The claimant appealed and submitted that the recorder had

assessments to be suitable. The claimant’s complaint that she had

misdirected herself on the burden of proof; she had failed to make

not also said they were “sufficient” was nit-picking. It was clear that

a clear finding about whether the defendant could have provided

she considered, and was entitled to consider, that they satisfied

pupils with powered wheelchairs and thus avoided the need for

the requirements of Regulation 4. Clearly, risk assessments

her to undertake manual handling operations involving a risk

had to be prepared by somebody with the necessary training

of injury; she failed to make a clear finding that the defendant

and experience. Although the employee who prepared the

had carried out a suitable and sufficient risk assessment; she

assessments for the defendant was not a health and safety officer,

had failed to make a clear finding that the defendant had proved

she was experienced and properly trained.

that it had taken steps to reduce the risk of injury to the lowest level reasonably practicable; she had failed to find that the defendant had provided information on the combined weight of each wheelchair and student; she had erred in disregarding evidence about the school’s layout and gradients; she had erred in preferring the evidence of the defendant’s medical expert; she should have awarded the defendants its costs only from the date it disclosed its risk assessment.

Rejecting the appeal, the Court of Appeal held that under Regulation 4(1), the employer had to prove that it had taken appropriate steps to reduce the risk of injury to the lowest level reasonably practicable, and that the employee’s injury had not been caused by any failure to do so. The recorder had misdirected herself by saying that the claimant had to prove that the defendant

The defendant had sought to reduce the risk of injury by training, regularly rotating staff and keeping slopes to acceptable gradients.

The training, which the recorder found to be full and adequate, covered the practicalities of safe moving and handling in some detail. The safe pushing of wheelchairs was neither difficult nor complex, and the evidence justified the recorder’s conclusion that the defendant had not breached its Regulation 4(1)(b)(ii) duty.

It was neither necessary nor appropriate for the defendant to provide the combined weight of each student and his wheelchair.

In any event, their failure to do so was not causative of the injury.

The recorder had correctly disregarded the evidence about the school’s layout and gradients. Once she rejected the claimant’s case that the injury was a cumulative one, that evidence was

had breached their Regulation 4 duties. However, that was not a

irrelevant.

basis for setting aside her order. She had reached her conclusions

The recorder was fully justified in her findings as to the nature and

on the evidence, without any reliance on the burden of proof. She found that while the claimant was selective in her memory and prone to exaggeration, the defendant’s witnesses were impressive and credible. With that in mind, she made firm findings of fact and reached firm conclusions, correctly applying the burden of proof at that stage.

Pupils used their own wheelchairs in school, and their choice of wheelchair was based on medical and therapeutic considerations.

extent of the claimant’s injury.

The claimant’s challenge to the costs order amounted to a claim that the only reasonable order was one which penalised the defendant for its late disclosure of the risk assessment. While the court could make a costs order to mark its displeasure at a party’s conduct, that was not the only reasonable response in the instant case.

There was no evidence about the cost to the defendant of providing powered wheelchairs. However, there was evidence that requiring manual-wheelchair users to use powered wheelchairs would be contrary to their interests. The recorder addressed that,

Employers’ liability Humphrey v Aegis Defence Services Ltd [Lawtel 05/03/2014]

correctly finding that it was not reasonably practicable to avoid the

From issue 009

use of manual wheelchairs.

In the case of Humphrey v Aegis Defence Services Ltd [Lawtel

The defendant prepared an annual risk assessment for each

05/03/2014] the claimant, a former marine, had worked as a close

pupil who used a wheelchair, and the recorder found those

protection escort for military personnel in Iraq under contract to

78

the defendant in teams which included Iraqi interpreters. Physical

factor. The injury was plainly caused by the interpreter’s unfitness

fitness was a condition of his contract and he was regularly

and decision to stop. The protocol was to replace a team member

tested. Interpreters were also tested but were less motivated

who showed signs of injury or high fatigue, but a fitness test had

to be physically fit as they were in short supply and were likely

to simulate actual conditions, so prematurely removing someone

to be employed even if they failed. During a test, held in the

who was out of breath would have rendered the test worthless.

afternoon, a team of four men, including an interpreter, carried

The interpreter showed signs of strain but the claimant and the

a man on a stretcher by one handle each. The team was briefed

supervisor had had the opportunity to observe him and neither

by an instructor, a medic was present, participants were asked if

considered him to be a risk to their safety. The supervisor had

they had any injuries before and after the test and a supervisor

the primary responsibility, but the team members knew their

ran alongside the teams during the exercise. Participants had

responsibility to each other and there was no evidence that

been given a week’s notice. The claimant had read the standard

they mentioned anything among themselves or halted to give

operating procedure instructions which stated that it was the

the interpreter a rest. They did not believe that he represented

responsibility of individuals to bring safety hazards to the attention

a hazard and it was thought that the team was within safe

of team leaders. He told the court that he had had reservations

parameters.

about the interpreter’s capacity from an early stage as he had looked uncomfortable wearing the heavy, specified kit. During the test and without warning the interpreter let go of his handle, causing the claimant’s arm to be wrenched downwards, injuring his shoulder. The defendant had been in control of the fitness test and accepted that they had owed the claimant a duty of care.

The defendant’s work in Iraq was a desirable activity within the meaning of the S1 Compensation Act 2006. Interpreters were essential and it was reasonable to apply more lenient fitness standards to them because of their scarcity. If the purpose or social value of an activity was sufficiently important, it justified an increased assumption of risk. It was reasonable of the defendant

Rejecting the claimant’s claim, the deputy High Court judge held

to require interpreters to take part in the test even if they were

that interpreters were usually civilians rather than ex- military and

not at the minimum standard of fitness, which introduced extra

fitness was not such an important part of their lives. It was sensible

danger, but if that risk was not taken important work would have

for the defendant, who had made real efforts to increase the

been prevented. The court was not persuaded that the defendant

interpreters’ fitness levels, to include them in training exercises,

had not monitored the exercise carefully and was not satisfied

but they had previously lost their grip on stretchers and dropped

that there had been a failure of duty of care.

out of exercises. The claimant and other contractors grumbled about them and their different treatment, but had made no formal complaints about their impact on safety even though individuals

Employers’ liability

were responsible for bringing safety hazards to the defendant’s

McCade v Critchlow and others [Lawtel 04/03/2014]

attention. The claimant was a former soldier who took his duty, to himself and his colleagues, seriously. It was foreseeable that an

From issue 009

unfit interpreter would drop a stretcher, but foreseeable only that

McCade v Critchlow and others [Lawtel 04/03/2014] includes a

it would cause minor soft tissue injury rather than serious injury.

brief review of the threshold that a claimant must establish to

The defendant had carried out a risk assessment and reviewed

found a claim for work related stress.

it immediately before the test. The interpreter had not indicated

The claimant was employed by the fourth defendant firm of

that he would give up and no concern had been voiced by the

solicitors as a paralegal. The first and second defendants were

claimant or other team members to the supervisor. The weight

partners in the firm and the third defendant was the managing

being carried on the stretcher was not excessive and, while the

partner. The claimant’s employment was lawfully terminated

test was conducted in the afternoon, there was no evidence that

for gross misconduct, after which she brought employment

it was excessively hot or that heat exhaustion was a causative

tribunal proceedings for sex discrimination which were dismissed.

79

Following the termination of her employment, she was diagnosed

no proven breach of duty arising under contract or at common

with paranoid schizophrenia. She alleged that, whilst employed by

law. The threshold that the claimant had to establish order to

the fourth defendant, she had not received the training, support

trigger a duty on the defendants to take steps to prevent injury in

and feedback that she would expect as a paralegal. She considered

the workplace, namely that the indications of impending harm to

that she had been doing work for which she had not been employed,

health arising from stress at work had to be plain enough for them

namely secretarial work, which demotion to administrative status

to realise that they should do something about it, was not made

she perceived as sex discrimination. The claimant made allegations

out. There was no evidence that the claimant had demonstrated

of professional misconduct against the second defendant claiming

signs of stress at work or that she had provided indications of

she had received incomplete instructions from him and that he

impending harm to health that would properly allow the court to

had failed to provide any helpful guidance and support, in breach

find a causal connection between the development of her paranoid

of the implied duty of mutual trust and confidence. The claimant

schizophrenia and her employment. It was possible for stress to

also alleged that that had caused her distress and that, in failing

be caused by an employer’s conduct whereby an employee was

to see the second defendant as a problem, the fourth defendant

starved of duties he had been employed to undertake, however

had been negligent. She further alleged that she had caught the

there was no factual basis to support such a conclusion. The

first defendant “backstabbing” her and that he had neglected her.

claimant had failed to establish any injury sounding in damages

The claimant contended that the third defendant had been aware

attributable to her complaints about her workplace experiences.

that she had been sidelined from paralegal work and of the stress

The claim was hopeless.

caused to her as a result of the conduct of and issues experienced with the first three defendants.

The claimant conceded in the witness box that the evidence

Employers’ Liability

showed that not only had the second defendant’s instructions

Johnson v Warburtons Ltd (2014) EWCA Civ 258

been appropriately formulated, but that her response to them

From issue 011

had been inadequate or incorrect.

Dismissing the claim, the deputy High Court judge held that the claimant was an unreliable witness, as was evident from the inconsistency of her complaints, her concessions on important matters and her assertions about the second defendant. Her criticisms of all four defendants were rejected; they had been unwarranted and unfair. Conversely, the testimony of the first three defendants was accepted.

The first and second defendants had done their best in a competent manner consistent with the implied duty of mutual trust and confidence. The claimant had been provided with work within the ambit of her employment contract; the tasks given to her had fallen within work properly given to a paralegal without a hint of unequal treatment or discrimination. The defendants had not (a) intended to demote, ostracise or leave the claimant lacking in support; (b) failed to provide adequate guidance; (c) engaged in sexual discrimination or other unequal treatment. The factual basis relied upon had simply not been made out. There had been

The absence of a risk assessment has often proved problematic when defending an EL claim but it is not always so as can be seen from Johnson v Warburtons Ltd (2014) EWCA Civ 258.

The appellant/claimant had driven an articulated lorry for four years. On the date of the incident, he had been required to drive a rigid lorry of the kind used for delivery to retailers. He had rarely driven such a lorry. Whilst driving, he heard something in the load topple over. He pulled over and used the side door to access the cargo area. There were two steps inside the lorry coming down from the floor. The top step had a hinged flap: when it was flush to the floor it covered the step. In order to enter via the stairs, the flap had to be lifted towards the rear of the lorry and fixed vertically by means of a catch. The top of the flap could then be used as a handhold, but it was not constructed for that purpose. It was not like a purpose-built hand “grab-point” such as those fitted for entering the driver’s cab. The steps were uneven vertically and quite steep. They were deep horizontally so most of the foot could be put on them. The claimant raised and fixed 80

the flap and entered the lorry. When he left the lorry, he came

contention that no training was needed because the need to take

down the stairs facing forwards. He did not hold the handhold.

care was obvious, and that no risk assessment was necessary.

His foot slipped off the bottom step and he fell from the lorry and into a gully, breaking his ankle. The trial was confined to issues of negligence/breach of duty, and causation. The judge held that

Employers’ Liability

there was no liability.

McGregor v Genco (FC) Ltd (2014) EWHC 1376 (QB)

Dismissing the claimant’s appeal, the Court of Appeal held that

From Issue 18

the defendant/respondent had operated a fleet of 760 rigid lorries for over 20 years. Regular delivery drivers used the side door approximately 15 times a day. No accident by way of falling had ever happened, nor was there any evidence that any driver

The case of McGregor v Genco (FC) Ltd (2014) EWHC 1376 (QB) related to a claim by a retail assistant for mesothelioma contracted during the course of her employment in the defendant’s shop.

had ever expressed any concern about the safety of the steps.

In the mid-1970s, old escalators around 10 feet from the shoe

Changes had been instigated in 2007 after a transport manager

department where she worked were removed and replaced.

had spent the day with a delivery driver and found that going

It was the claimant’s case that that work had lasted from four

up and down the stairs repeatedly had hurt his knees. Future

to six weeks, if not longer, and had been carried out while the

lorries were installed with three steps rather than two. The

department store was still open to the public. She estimated that

existing fleet was not modified. However, that was not evidence

she had cleaned a fine white dust from the shoes on display three

of inherent danger. The transport manager was not a regular user

to four times a day. The workmen replacing the escalators had

of the steps and it was not proved that he thought the steps

worn protective dust masks, some sort of inner floor-to-ceiling

were inherently dangerous, merely that he thought three steps

barrier had been used and a joint expert statement agreed that

would be more comfortable to use. There was evidence that the

it was likely that asbestos insulating boards had been used in the

Health and Safety Executive had positively approved the steps.

construction of both the old and new escalators. On the evidence,

They had been introduced because delivery drivers had been

a question arose as to whether the claimant might have been

jumping on and off partially deployed tail lifts. The side door and

exposed to asbestos dust through her father’s work clothes. Her

steps had made things safer. That change was described in the

family also had a history of mesothelioma. Subject to liability,

2007 HSE information sheet under the heading “making it safe

damages had been agreed. The issues were (i) whether the

and easy”. The evidence was not such that the judge should

claimant was exposed to asbestos dust through her father or

have found that the steps were inherently dangerous.

during her employment with the defendant and the extent of any

A salesman’s working guide had been published in October 2008. It stated that “when exiting... through the side door, a

exposure; (ii) whether that exposure caused her mesothelioma; (iii) whether the exposure was negligent.

suitable handhold is available by means of the top edge of the

Dismissing the claim, the High Court judge held that on the

stair/flap. If the flap is to be used as a handhold, it is important that

balance of probabilities, the claimant had had no exposure to

it is secured in an upright position”. It was unclear how the guide

asbestos dust in her family home through her father. She had,

helped the claimant’s case. The advice was not that the handhold

however, been subjected to exposure of asbestos dust during her

had to be used for safety purposes, it was that if it was going to be

employment with the defendant at the department store in 1976;

used, then it should be properly fixed. The authors of the report

her evidence and that of her witnesses, was consistent with the

had clearly regarded the handhold as optional and did not regard

use of asbestos insulation board during the course of the works.

walking down the stairs without holding on as dangerous. The

There was no evidence to establish that that activity occurred

judge had been entitled to reach the conclusion that the guide

every day but it was clear that a regular dust nuisance had been

merely advised that someone might wish to grasp the handhold in

created and maintained for most of the time that the works

order to descend. It had been open to him to accept defendant’s

were taking place despite there being some sort of inner floor-

81

to-ceiling barrier.

Although the claimant’s asbestos exposure was modest, in that it

to a sufficient extent to give rise to a duty of care to the claimant.

was for a period of no more than several months during 1976, the

The Court of Appeal was required to determine (i) whether a

likelihood was that it had caused her mesothelioma. While she had

parent company assumed a duty of care to employees of its

a family history of mesothelioma, that did not invalidate the

subsidiary in health and safety matters by virtue of appointing an

conclusion that the relevant exposure materially increased her

individual as director of its subsidiary company with responsibility

risk of developing the disease.

for health and safety matters; (ii) if not, whether the evidence was

On the issue of causation, the question was whether the carrying out of the escalator works should have alerted the defendant to the fact that the claimant might be at risk of injury when she

sufficient to justify the imposition of a duty of care on the parent company to protect the subsidiary company’s employees from the risk of injury arising out of exposure to asbestos at work.

worked for them in 1976. On the balance of probabilities, there

The claimant submitted that after the defendant acquired the

had been a floor-to-ceiling enclosure which would have been

subsidiary, paperwork and lorries bore the defendant’s logo, and

considered as adequate protection at the time: the question then

the subsidiaries shared resources with its other businesses.

became whether there was any further duty to make enquiries as the works progressed. There was nothing that indicated that there should have been an understanding of the risk which was caused by the operations or anything to alert the defendant that the precautions that it adopted were inadequate and required alteration; the fact that some workmen wore masks was insufficient to put the defendant on notice. Accordingly, the court did not accept that during 1976 when the escalator work was being carried out the defendant should have appreciated that the claimant was at risk of an asbestos- related injury or that its failure to appreciate and take what would now be regarded as appropriate precautions or to make enquiries about the nature of the dust had been negligent.

Allowing the defendant’s appeal, the Court of Appeal held that the answer to the first question was no. In running the day-today operation of the subsidiary the new director was not acting on behalf of the parent group. He was acting pursuant to his fiduciary duty owed to the subsidiary and pursuant to no other duty. It followed that the basis upon which the judge determined that the defendant owed a duty of care to the claimant was unsupportable. There was no evidence of any relationship between the new director and the defendant beyond his inferred nomination by it as director of the subsidiary.

A duty of care would only be imposed if the threefold test enunciated in Caparo Industries Plc v Dickman (1990) was satisfied, namely the test of foreseeability of damage and proximity where it was fair, just and reasonable to impose a duty of a given scope

Thompson v Renwick Group Plc (2014) EWCA Civ 635

upon the one party for the benefit of another.

In Thompson v Renwick Group Plc (2014) EWCA Civ 635 the

In Chandler v Cape it was stressed that the critical question was

claimant had been employed by two companies between 1969

“whether what the parent company did amounted to taking on

and 1978. The companies were acquired by a subsidiary of the

a direct duty to the subsidiary’s employees”. The factors relied

defendant in 1975. Shortly after that, a new director took over

upon by the claimant were far removed from Chandler. Taken

the running of the depot where the claimant worked. It was likely

individually, the points did not withstand scrutiny. Coordination

that the new director had been nominated by the defendant. The

of operations between subsidiaries was just that, unless it was

claimant’s work involved handling raw asbestos. He developed

demonstrated that the group holding company assumed control

pleural thickening as a result of his exposure to asbestos dust.

in such a manner as to demonstrate an assumption of duty

His employers did not have liability insurance and would not

to the employees of the subsidiaries. There was no evidence

be able to meet any award for damages. He therefore brought

that the defendant carried on any business apart from that

proceedings against the defendant, their parent company. At first

of holding shares in other companies. The court was looking

instance the judge held that the defendant, through the new

for a situation in which the parent company was better placed,

director, had taken control of the daily operation of the business

because of its superior knowledge or expertise, to protect the 82

employees of subsidiary companies against the risk of injury and,

Dismissing the claim, the deputy High Court judge held that

moreover, where because of that feature it was fair to infer that

the deceased had worked at the cemetery sometime between

the subsidiary would rely upon the parent deploying its superior

1972 and 1977, and probably in 1976 or 1977, when he had

knowledge in order to protect its employees. There was no basis

applied some paste or decorative finish to the ceiling of one of

upon which it could be asserted that the defendant had, or should

the buildings there. The court was unable to determine what

have had, any knowledge of the hazards of handling raw asbestos

product he had used on the ceiling. It was satisfied that the note

superior to that which the subsidiaries could be expected to have.

the claimant took down was the deceased’s best recollection of

The judge’s findings on the intermingling of the businesses, the

what had occurred and there was no doubt that he had genuinely

interchangeable use of depots and the shared use of resources

believed that he had worked with asbestos whilst at the cemetery.

amounted to no more than a finding that the companies were

The court was also satisfied that the ceiling the deceased worked

operating as a division of the group carrying on a single business.

on had not been altered or replaced since that time and that there

That did not mean that the legal personality of the subsidiaries

were three separate asbestos surveys which had found no relevant

separate from that of their ultimate parent was not retained and

asbestos. That evidence tended to suggest that no asbestos was

respected. The evidence fell far short of what was required for the

present. In the circumstances, the court was driven to conclude

imposition of a duty of care on the defendant.

that, whatever the deceased had genuinely believed, the claimant had not discharged the burden of showing that he had used any form of plaster or decorative covering which contained asbestos

Employers’ Liability

whilst working at the cemetery.

Abbott v Cannock Chase District Council [Lawtel 16/05/2014] From Issue 19

Employers’ Liability/Stress at work

The case of Abbott v Cannock Chase District Council [Lawtel

Olulana v London Borough of Southwark [Lawtel 23/06/2014]

16/05/2014] is a reminder that the burden of proving negligence is on the claimant.

The claimant’s deceased husband had been employed by the defendant as a bricklayer during the 1970s. In January 2014 he died from mesothelioma. Before his death, the claimant took down a written note of her husband’s allegation that he had been exposed to asbestos fibres and/or dust during his employment with the defendant. The particulars of that note formed the basis of the claim: that the deceased had been exposed to asbestos when, over the course of about a week, he had carried out work on the ceiling of a bricked construction in a cemetery. His account was that he had had to mix asbestos fibres with water to form a paste, which he then applied to the ceiling. The court heard evidence from those who had worked at and were familiar with the cemetery, and it had the benefit of a joint expert report and asbestos surveys carried out at the cemetery. The issue was whether the deceased had been exposed to asbestos fibres and/ or dust while working at the cemetery.

From Issue 24 In Olulana v London Borough of Southwark [Lawtel23/06/2014] the claimant had been a finance officer at the defendant for over a decade. She was seen as a hard worker, although with some deficiencies as a senior account manager, and in 2003 was suspended for incorrect working. In that year she began to suffer from delusions that included that she had a reputation as a whistleblower and was suffering from victimisation. There was nothing in her employment records to indicate that she was suffering from psychiatric injury. Her job had imposed stresses and from 2007-2009 there were a number of meetings with management to discuss the situation. A temporary member of staff had been employed to alleviate the pressure on the claimant. A few months later she was referred to occupational health for hypertension, but said she was all right otherwise. Her employer took her at her word. From the beginning of the next year the claimant complained that stress at work was the worst of the previous two years. She was diagnosed with psychiatric illness and by late 2011 was saying that management were hacking into

83

her computer and following her in a car. Her delusions continued

Nine months after the claimant had bought the bike, he lost

and increased, and she was diagnosed with schizophrenia. She

control while riding the bike on a tarmac cycle path. He fell and

alleged that as a result of the local authority’s actions some time

suffered very serious head and facial injuries, including the loss of

after 2003 and lasting until 2011 she suffered psychiatric injury,

an eye. The steerer tube which connected the front wheel forks to

namely the acceleration of schizophrenia. She brought actions

the handlebars had fractured.

at common law for breach of contract and tort and under the Equality Act 2010. The claimant’s expert witness reported that the illness was likely to be of genetic origin but that its onset was accelerated by five to seven years of work-related stresses starting from 2003 and was triggered by stressful events at work in June 2009. The local authority’s expert witness took the view that 2003 saw the first manifestations of schizophrenia, and that the illness developed insidiously and inevitably from then. He stated that a triggering event was rare, but she had undergone a fertility procedure and divorce, which could have been a factor.

The claimant did not give oral evidence.

Dismissing the claim the High Court judge held that the test to be applied was that of a reasonable and prudent employer, taking positive thought for his workers in the light of what he knew or ought to have known. The defendant had treated the claimant in an exemplary way once it knew of her illness and had been far from negligent. There had been nothing in the claimant’s records to show that she had suffered from psychiatric injury and the local authority had been entitled to take what she said about her health at face value. She had been in denial about her psychiatric condition until after she had left her job. The evidence of the local authority’s expert was to be preferred; the claimant had a neurobiological condition that had developed insidiously and inevitably. She had not proved any causative factor.

Product Liability Love v Halfords Ltd (2014) EWHC 1057 (QB).

From Issue 15 Cases under this heading are relatively rare and so, although it is on its own facts, we report Love v Halfords Ltd (2014) EWHC 1057 (QB).

The claimant cyclist alleged that his injuries had been caused by a defect in a mountain bike which he had bought from the defendant supplier.

It was the claimant’s case that, from the moment of supply, there had been a defect that had materially contributed to the fracture, which in turn had caused his loss of control. The defendant maintained that the fracture had not caused the accident, but had been caused by it, the tube having previously been weakened when it was bent in a prior incident and then incompetently re-straightened. The claimant denied there had been any prior incident or re- straightening.

Finding in favour of the defendant, the High Court judge held that on the basis of the scientific evidence, the clear balance of probability was that there had to have been a prior event where the tube was damaged by being bent and further damaged by being subjected to a crude and amateur attempt at repair by re-straightening. The tube had therefore been shown by the defendant, on a clear balance of probability, not to have been defective at the relevant time, namely on the date of supply. There was nothing defective about its design, assembly or the steel from which it was made. The probable cause of the final fracture was the second accident, involving considerable speed and force. A collision with one of the row of fixed metal stanchions which the claimant was riding past was likely to have been the violent event that caused the fracture of the tube by ductile overload, which occurred as a result of the accident and was not the cause of it.

Public liability/highways McCabe v Cheshire West and Chester Council and another [Lawtel 24/07/2014] From issue 028 The case of McCabe v Cheshire West and Chester Council and another [Lawtel 24/07/2014] draws the distinction between the power of a local authority to do something and its duty to do so.

The following extract from S97 Highways Act 1980 is relevant to this report: 84

(1) The Minister and every local highway authority may provide

The inherent danger was present as soon as the footpath was

lighting for the purposes of any highway or proposed highway for

dedicated to the public when it involved a sudden drop in level.

which they are or will be the highway authority, and may for that

To the extent that the first defendant provided, adapted or

purposes —

maintained the steps, those did nothing to add to the danger;

(a) contract with any persons for the supply of gas, electricity or other means of lighting; and (b) construct and maintain such lamps, posts and other works as they consider necessary.

(2) A highway authority shall pay compensation to any person who sustains damage by reason of the execution of works under this section.

The claimant had fallen down a flight of steps at a point where a public footpath negotiated a steep drop in level. The accident occurred at 23.00 and he claimed that it was caused by the fact that a streetlight intended to illuminate the steps had not been working at the time. The first defendant local authority was responsible for the footpath and its lighting and the second

indeed they reduced it significantly, as did provision of the light.

The presence of the streetlight, if lit, reduced the danger and, if unlit, did nothing to increase it. There was no parallel with Bird v Pearce (1979) because the presence of the lamp, if unlit, would not cause anyone to rely on it. It would be perfectly obvious that it was not lit and that it was not possible to see what was ahead. There could be no doubt that had the local authority taken a conscious decision to switch the light off or even to remove it, it would not have been liable. It would merely have been exercising its discretion under the statutory power. What was done was a failure to maintain the lamp, not an active step.

Thatwas nonfeasance, not misfeasance. No duty of care was owed by the first defendant local authority or the second defendant contractor.

defendant had contracted with the local authority to maintain the streetlights. It was accepted that the streetlight had not been working. The issue was whether the defendants owed a duty of

Highways

care to the claimant.

Curtis v Hertfordshire Council [Lawtel 21/03/2014]

The claimant submitted that S97(3) Highways Act 1980 expressly

From issue 012

provided for compensation to be paid to anyone who suffered damage by reason of the execution of works under that section.

The defendants submitted that they owed no duty of care to the claimant because the first defendant provided street lighting pursuant to a power contained in s97 of the Act, and its failure to repair the streetlight was therefore a failure to exercise a power rather than breach of a duty.

The case of Curtis v Hertfordshire Council [Lawtel 21/03/2014] has already received widespread coverage in the media. The claimant, who was training for a cycling event, was cycling on a suburban, residential road when he suddenly swerved, lost control of his bicycle and sustained fractures to his skull and arm. He had no memory of the incident or why he had swerved. His friend, who was cycling behind him before the incident took place, inspected

Finding in favour of the defendants the County Court judge held

the road immediately after the accident and discovered a long,

that it was obvious that S97(3) was designed to protect those

linear defect in the road. The defect was 40mm deep, adjacent

who were directly affected by the carrying out of works to provide

to the centre of the carriageway and at the point at which the

streetlights. It was not intended to create liability for nonfeasance

friend believed that the claimant had swerved. The friend gave

in circumstances such as the instant case.

evidence that he did not see the claimant’s bike judder, which he

Liability could be established against the first defendant only if it performed some positive act that created a danger, but it would

accepted would have occurred if the front wheel had gone into the defect.

not be regarded as having performed a positive act where it

Evidence was adduced that the claimant and his friends, all

undertook work to remove a hazard but failed to do so completely.

competent cyclists, would cycle towards the centre of the

The circumstances of the instant case amounted to nonfeasance.

carriageway where there were parked cars, though there was

85

no evidence as to whether there were parked cars on the road at the time of the accident. An image of the road, taken at an unknown time, showed cars parked on the side of the road. The local authority’s road inspector, who had inspected the road six months previously, accepted that, had he seen the defect, it would have been recorded as a category one defect, which would require repair within seven days. He further stated that, as the defect was

visited the site on a number of occasions and formed the view that the works were being carried out in a dangerous fashion. It therefore issued prohibition notices under the Health and Safety at Work etc. Act 1974 in respect of various activities under the appellants’ control which the inspectors considered involved a risk of serious personal injury. An employment tribunal affirmed the notices.

on the offside of his vehicle, it would not have been visible to

The appellants appealed and submitted that S2 and S3 of the 1974

him and, as a linear defect, would have been less obvious than a

Act imposed duties on a single person with unified control of the

depression in the carriageway.

premises while S4 imposed them on various persons with divided

A neuro-psychiatrist’s report stated that the accident had caused damage to the claimant’s ability to process information and to his verbal and visual memory. He had also suffered loss of hearing.

control, and although S2 and S3 were referred to specifically in each prohibition notice while S4 was not, the tribunal had focused on whether they had divided control.

The claimant gave evidence that on his return to work he had

Allowing the appeal in part, the High Court judge held that the

been unable to deal with high level tasks, was subsequently

tribunal had undoubtedly focused on whether the appellants

dismissed without reason and had to take a lower paid, and less

each had some measure of control over the works, rather than

demanding job. The parties were agreed as to the quantum of

whether both of them had joint sole control of what happened

damages, save as to any sum recoverable for the claimant’s

on site. The difference in practical terms might be slight, but

continued disadvantages in the labour market.

there was a difference. Given that that was not the basis upon

It was not appropriate to say that the claimant bore any responsibility. He was cycling at 18-20 miles per hour, which was not excessive on a road with a speed limit of 30 miles per hour.

Although the claimant was able to perform his job adequately, he had been required to develop numerous coping strategies.

The permanent nature of his injuries put him at a significant disadvantage, which made him vulnerable to periods of unemployment. That loss could be represented by an additional award of £20,000.

which each notice was formulated, the basis being the sole control to be found in S2 and S3, that had been a misdirection on the issue the tribunal had to determine. It had had to decide whether the appellants each were in sole control of the site, which would require a finding of joint sole control rather than a finding that each had some degree of control over the operations being carried out there. However, the tribunal would have still reached the same conclusion concerning the husband if it had not misdirected itself. Had it asked itself whether the totality of the findings of fact justified the conclusion that he was in sole control of the site, the answer would plainly have been “yes”. There was

Health & Safety/control of building site

no evidence that any other party seen present on the site was exercising any degree of control over the operations as a whole.

Eze and another v Health & Safety Executive (2014) EWHC 3474

The husband’s appeal was therefore dismissed. In contrast, the

(Admin)

findings of fact did not support the conclusion that the wife had

From issue 40

any control over the operations on site. There was no finding that

Civil liability for personal injury resulting from work on a building site is invariably determined by the degree of control exercised by one or more parties. The case of Eze and another v Health & Safety Executive (2014) EWHC 3474 (Admin) is therefore of interest.

The appellant husband and wife owned a property which was

she was ever at the site at any material time nor that she ever issued a direction, whether written or otherwise, in relation to the works being carried out. There was no evidential basis at all for concluding that she was in joint sole control of the site nor that she had some degree of control. Her appeal was therefore allowed.

being converted from offices to flats. The respondent’s inspectors 86

4. Limitation

Further, the question of whether a claimant failed to act

Hall v Ministry of Defence (2013) EWHC 4092 (QB)

different from the question of whether the claimant was guilty of

From issue 001 The case of Hall v Ministry of Defence (2013) EWHC 4092 (QB) looks at the factors to be taken into account by the court when considering the discretion under S33 Limitation Act 1980 to

promptly and fairly towards the defendant was significantly inordinate and inexcusable delay. Accordingly, the matter would be considered afresh on the basis of whether the claimant had been guilty of inordinate and inexcusable conduct so as to have abused the process of the court.

disapply the three year limitation period for bringing a personal

Looked at in isolation, the second claim was not open to serious

injury action.

criticism. It had plainly been brought outside the limitation period,

The claimant had issued a claim alleging negligence in the medical treatment he had received in respect of injuries suffered in the army. The claim form had been issued in August

but the reasons for that delay could be subject to consideration in a S33 application. Given that there was nothing abusive about the claim itself, the question had to be whether the conduct of the first claim had been so wrongfully delayed that the issue of

2010 but had not been served by April 2011, which was when

the second claim was in itself an abuse. The defendant’s primary

the defendant had agreed to extend time for service to. The

complaint as to delay related to the 15-month period from the

claimant had applied for an extension of time on that date, but

issue of the extension of time application to its determination.

did not inform the defendant of the application until April 2012.

However, the application would have taken months to

Due to oversights on the court’s part, the application was not

determine even if progressed promptly, and the delay in listing

heard until July 2012. The application was refused and the claim

the hearing had been due to court administration in any event.

struck out. The claimant was ordered to pay £3,000 on account of

The defendant also relied on the four-and-a-half months between

the defendant’s costs. In December 2012 he issued a second claim.

the striking- out of the first claim and the issue of the second,

He accepted that the second claim had been brought outside the

but that period could not be said to be an abuse in relation

three-year limitation period, so that he would have to apply

to the conduct of the first claim, and could not be regarded as

under S33 to disapply the limitation period. A deputy master

abusive delay going beyond what would be considered in a

struck out the second claim, stating that the claimant’s failure

S33 application in relation to the second claim. Accordingly, the

to make payment on account and failure to conduct himself

delays could not be said to be inordinate and inexcusable such

promptly and fairly towards the defendant rendered his action

that the second claim should be struck out.

an abuse of process.

The claimant’s failure to make payment on account was not,

Allowing the claimant’s appeal, the High Court judge held that

either by itself or in combination with the delays, sufficient to

a long delay for which the claimant could be held responsible

make the second claim an abuse of process. The defendant had a

was not in itself sufficient to amount to an inordinate and

remedy in relation to the claimant’s failure, being entitled to apply

inexcusable delay justifying a strike-out for abuse of process: there

for a stay of the second claim pending payment or to take steps to

had to be something transforming the delay into an abuse such

enforce the order. Even had the court considered that the second

as evidence that the claimant had lost interest in the proceedings.

claim was an abuse of process, the question would still have

It was difficult to ascertain that the deputy master’s conclusions

arisen of whether it was appropriate to strike out the claim as a

had addressed the right question. Regarding the failure to make

matter of discretion. Had the court arrived at that point, it would

the payment on account, he had not considered whether the

have directed that the issue be determined in the context of an

breach was such that it could be described as intentional and

overall consideration of S33, the question of abuse of process

contumelious, or otherwise a wholesale disregard of the rules. It

being one factor in all the circumstances.

could not amount to either.

87

Francisquini v London Borough of Southwark and another

Allowing the application, the deputy High Court judge held that it

[Lawtel 31/03/2014]

was inherently unlikely that the claimant had been advised that

From issue 013 The case of Francisquini v London Borough of Southwark and another [Lawtel 31/03/2014] is an example of a judge weighing the prejudice to each party when considering whether or not to disapply the three-year limitation period for a personal injury claim. The claimant/applicant applied to add a personal injury claim, outside of the limitation period, to other claims against the defendant/respondents.

The claimant had brought proceedings against the defendants under the Fatal Accidents Act 1976 and the Law Reform (Miscellaneous Provisions) Act 1934 following a fire in which his daughter and grandchildren had died. He gave evidence at an inquiry into the fire. His solicitor had advised that he did not

he had a cause of action in personal injury which he would not have pursued, despite being prepared to pursue the other claims.

Nor was it likely that, if he had not suffered personal injury, he would suddenly claim that he had suffered such injury so late in the proceedings.

The defendants had not sought to put the claimant’s presence at the fire into issue in their defences and, more significantly, he had given evidence at the inquest. Any forensic disadvantage on the defendants’ part was minor at best.

The claim for loss of earnings was relatively modest and the claimant alleged that his job paid £15,000 per annum. There was no real evidence that the available information was less cogent than if the claim had been brought within the limitation period.

have a cause of action in personal injury in his own right against

Although it might be a fair criticism that the claimant was in

the defendants. The claimant instructed each of the solicitors’

breach of orders, that did not amount to prejudice. If he

firms that his solicitor subsequently moved to. The last firm was

pursued the personal injury claim and the defendants wished to

concerned as to the solicitor’s handling of the case and took steps

put him to the cost and expense of obtaining relief from sanctions

to discover whether the claimant had suffered psychological

then the court would make a decision on that application. It was

injuries following the fire. It emerged that he had been unable

appropriate to add the personal injury claim. There was at most a

to work following his return to Brazil, where he was resident.

relatively minor prejudice to the defendants. The claimant would

After taking further legal advice, he gave instructions to pursue

otherwise be significantly prejudiced. Although he might have a

a personal injury claim some time after the original proceedings

claim for professional negligence against his previous solicitors he

had been issued.

would face several difficulties, such as his residence in Brazil, the

The defendants argued that the claim should not be added as: The claimant’s delay was either because he had previously decided not to pursue the claim or had not suffered from psychological symptoms They were disadvantaged by the inability to investigate the claimant’s presence during the fire and its aftermath, and the difficulty in tracing witnesses arising from his delay The cogency of the loss of earnings evidence was significantly reduced as a result of the delay

fact that there were two previous firms of solicitors, and that his claim would be limited to the loss of a chance, which would be difficult to quantify.

Comment It is interesting to contrast this judge’s comments with those of the Court of Appeal in Davidson v Aegis Defence Services (BVI) Ltd and another when supporting a decision not to exercise the S33 discretion: ‘The judge was fully aware that a claim against the claimant’s former solicitors would be based on a loss of chance of success

The claimant should not be able to pursue his claims until he had

in the original proceedings. Litigation against a claimant’s former

applied for relief from sanctions as he was in breach of orders

solicitors was second best but it was something which a judge

relating to disclosure and exchange of witness statements

could, and usually should, take into account as best he could…’

The prejudice to the defendants of permitting the claim outweighed any prejudice to the claimant in refusing permission 88

Collins v Secretary of State for Business Innovation & Skills From Issue 20 In Greenwoods’ Alert 351 we reported the decision at first instance in Collins v Secretary of State for Business Innovation & Skills. The Court of Appeal has now rejected the claimant’s appeal and the case is reported at (2014) EWCA Civ 717. The case discusses how the factors set out in S33 Limitation Act 1980 should be weighed.

relied on the judge’s finding that when he had asked about the cause of his lung cancer in 2008 the doctor had said that he did not know. However, the claimant was being discharged in 2008 and the doctor’s response at that time did not assist in determining what he would have said if asked in 2002-03. The doctor would have known that asbestos exposure was one of the possible causes of lung cancer and it was inevitable that he would have mentioned that if asked in 2002-03. The judge was right to find that the

The appellant/claimant had been a dockworker between 1947 and

claimant had constructive knowledge by mid-2003.

1967 for the predecessors to the respondent/defendants, where

None of the relevant authorities discussed the issue of pre-

he had unloaded asbestos. He was diagnosed with inoperable lung cancer in 2002. However, radiotherapy treatment was successful.

His doctor examined him numerous times between 2002 and 2008. The claimant instructed solicitors in July 2009 after seeing a newspaper advertisement. His claim form was issued in May 2012.

The judge found that he did not have actual knowledge of the possible link between the cancer and his exposure to asbestos until July 2009. However, he found that, under S14(3) Limitation Act 1980, he had constructive knowledge in mid-2003 as, although it had been reasonable for the claimant not to make inquiries about the cause of his cancer in the period immediately after diagnosis, it would have been reasonable to expect him to ask by mid2003. If asked, it was inconceivable that the claimant’s doctor would not have mentioned asbestos exposure as a possible cause.

Therefore, under S11, the limitation period expired in mid-2006 and, applying the criteria set out in S33, it was not equitable to disapply S11. The date of actual knowledge was not disputed. The main issue on appeal was in relation to the judge’s approach to the delay between 1947 and mid-2003. He held that he could take into account prejudice caused to the respondents by the passage of time.

Upholding the decision, the appellate court held that applying the objective test under S14(3), the judge was right that a reasonable person in the claimant’s position would have asked about the possible causes of his lung cancer by mid-2003. His medical records revealed that during 2002 he had been questioned about his lifestyle and former employment. Those questions were obviously asked for a purpose. Any reasonable person in the claimant’s position would have been prompted to inquire what light that shed on the possible causes of his cancer. The fact that he delayed for six years before asking did not assist his case. He 89

limitation period of passage of time at any length. The problem was that S33(3)(b) required the court to focus specifically on the extent to which the evidence had become less cogent during the delay. The time which elapsed between a tortfeasor’s breach of duty and the commencement of the limitation period had to be part of “the circumstances of the case” within the meaning of S33(3). The primary factors the court had to have regard to were those set out in S33(3)(a) to (f). Parliament had singled those factors out for special mention. Therefore, although the court would have regard to time elapsed before the claimant’s date of knowledge, it would accord less weight to that factor. It would treat pre- limitation period of passage of time as merely one of the relevant factors to take into account. Both parties could rely upon that factor for different purposes. A claimant could rely on the passage of time to buttress his case under S33(3) (b). He could argue that recent delay had had little or no impact on the cogency of the evidence, that the damage was done before he started being dilatory. The defendant could rely on the passage of time to show that it already faced massive difficulties in defending the action and that any additional problems caused by the claimant’s recent delay were therefore a serious matter. It was for the court to assess those and similar considerations before deciding on which side of the scales to place that particular factor. In the instant case, the judge had treated the criteria set out in S33(3)(a) to (f) as the factors of primary importance. He treated the lengthy period of historic delay as a factor in making it less equitable to extend time under S33(1), but did not attach undue weight to that consideration. He was entitled to take that period into account as he had. The judge had carefully evaluated all the relevant factors and come to a correct conclusion under S33.

Product liability Unwalla v Spire Healthcare Ltd [Lawtel 22/10/2014] From Issue 37 In Unwalla v Spire Healthcare Ltd [Lawtel 22/10/2014] the claimant claimed damages for personal injury and other losses arising from alleged breach of contract in relation to the supply of a hip implant using the Birmingham Hip Resurfacing System (BHRS). The hip replacement surgery had been carried out in 2001. The claimant had suffered an adverse reaction to metal debris (ARMD) and had to have revision surgery in 2007. It was the claimant’s case that the implant was in breach of the statutory implied terms of satisfactory quality and fitness for

satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances”. It was said that relevant circumstances could include the defendant’s knowledge. Its case was that its defence sufficiently raised the issue as to whether the implant was appropriate for the claimant and that it was inevitable that expert evidence would be required on that and other issues. The claimant had not produced any incontrovertible evidence on what were described as the core issues. Permission was given to amend the defence, and on the defence as amended, which put the claimant to proof on the key issues, it could not be said that there were no reasonable grounds of defence or that the defence had no real prospect of success.

purpose under the Supply of Goods and Services Act 1982 and that the services and/or advice given by the defendant were not supplied with reasonable skill and care. The defendant served a defence denying liability, but admitting the contract for supply of the implant and the implied terms. It denied that it was vicariously liable for the actions of the consultant and argued that the contract claim was statute- barred under S5 Limitation Act 1980 since proceedings had not been brought until 2013.

The claimant applied to strike out the defence or for summary judgment on the basis that the vicarious liability issue was irrelevant, as was S5 which was disapplied by S11 of the 1980 Act in a personal injury claim. The claimant argued that the defence failed to deal with the core allegations in the particulars of claim, namely that BHRS was not fit for purpose, in particular because the claimant had hip dysplasia and that the claimant was not warned that BHRS had an unacceptably high risk of revision surgery within 10 years. The defendant applied for permission to amend its defence substantially.

The High Court judge held that the original defence was clearly defective, but the court, before striking it out, had to consider whether it could be amended. The claimant accepted that there was a triable issue on limitation under S11 and S14 of the 1980 Act, leading to the court being asked to exercise its discretion under S33 to exclude the limitation period. There were also triable issues of causation and the assessment of damages.

The defendant relied on the terms of S4(2A) of the 1982 Act which provided that “goods are of satisfactory quality if they meet the standard that a reasonable person would regard as

Platt v BRB (Residuary) Ltd (2014) EWCA Civ 1401 From Issue 039 At a time when deafness claims are one again on the increase, the case of Platt v BRB (Residuary) Ltd (2014) EWCA Civ 1401 is a useful one for defendants.

The respondent/claimant had worked for the appellant/ defendant for 35 years between 1953 and 1988 in a very noisy environment. He first consulted his doctor about hearing problems in 1982. He made further visits in the 1980s and 1990s. In 1997, he complained to his GP of tinnitus and hearing reduction. He was referred to an ear, nose and throat specialist who asked whether he had worked in a noisy environment and the claimant replied that he had. He did not go on to ask and was not told that he was suffering from noise-induced hearing loss. In 2010, the claimant read an article about industrial hearing loss which led him to contact solicitors, to consult an ENT surgeon and to make a claim in 2011. The judge found that the claimant was not affected in 1997 by constructive knowledge of the fact that his tinnitus and hearing loss were attributable in part to acts or omissions alleged to amount to the defendant’s negligence. He held that, applying an objective test, it was not reasonable to have expected the claimant specifically to ask the original ENT consultant about the cause of his hearing loss in 1997. He found that the claimant had actual knowledge after reading the article which was less than three years before he issued proceedings.

90

Allowing the defendant’s appeal, the Court of Appeal held that the judge had not paid enough regard to the words of S14(3) Limitation Act 1980 and to the test in Whiston (2010). The court had to consider what knowledge the claimant might reasonably have been expected to acquire from the medical advice which it was reasonable for him to seek. The proviso to S14(3) made clear that a person was not to be fixed with knowledge of something only ascertainable with expert advice so long as he had taken all reasonable steps to obtain and, where appropriate, to act on that advice. The claimant had taken all reasonable steps to obtain advice about his hearing loss. It was reasonable to expect a reasonable person in his position to ask the original ENT consultant whether the history of noise exposure which they had discussed had caused or contributed to his symptoms. It was a natural and appropriate question to ask. The test imposed a demanding standard.

Applying the appropriate test in S14(3) and the guidance from Whiston, it was reasonable to expect the claimant to ask the consultant what had caused his hearing loss in all the circumstances of the case. It was not disputed that, had he done so, he would have been likely to have been informed that his tinnitus and hearing loss were noise-related.

Judgment was given for the defendant on the limitation issue on the basis that the claimant had constructive knowledge more than three years before the issue of his claim form.

91

5. Fraud

Rejecting the application, the High Court judge held that for the

AXA Insurance Plc v Rossiter (2013) EWHC 3805 (QB)

reasonable doubt (a) the falsity of the respondent’s statements;

From issue 001 Despite some success in prosecuting claimants for contempt of court, as the result of fraudulent claims, defendants still face an uphill struggle. In AXA Insurance Plc v Rossiter (2013) EWHC 3805 (QB) the applicant insurer applied to commit the respondent to prison for contempt of court.

applicant to establish the contempt alleged it had to prove beyond (b) that those statements had or would have materially interfered with the course of justice; (c) that she had no honest belief in the statements and had known of their likelihood to interfere with the course of justice. On the evidence, the respondent had not been dishonest. Her statements were false in that they did not deal with what she could do, as shown on the surveillance evidence, on good days, but the applicant had not satisfied the

The applicant had been the insurer of the tortfeasor who had

court beyond reasonable doubt that she could do more than was

injured the respondent in a road traffic accident. Liability was

shown on the surveillance evidence. She had not generally made

admitted and, in February 2011, the claimant issued a claim.

false statements to her doctors or in her schedule of loss. The

Judgment was entered in her favour and she served medical

surveillance evidence of April 2012 supported her case that there

reports, a witness statement and an updated schedule of loss

were days when she was unfit to leave the house. There was a line

asserting that she was suffering from permanent, severe,

between exaggeration and dishonesty. Discrepancies between

continuous disability such that she rarely left her house or bed.

witness statements and video evidence would not automatically

The applicant disclosed to video surveillance evidence to the

amount to a contempt of court: ultimately, that was a matter of

respondent of 13 days of filming between November 2011 and

fact and degree, and some exaggeration might be natural, even

January 2012 showing her leaving home unaccompanied,

understandable. The respondent’s evidence raised considerable

shopping, driving, walking her dogs, collecting her son from

doubt as to whether she was lying, and the applicant had fallen

school, and walking up and down steps carrying heavy and bulky

short of proving dishonesty. Accordingly, whilst the respondent

objects. There was also filming from two days in April 2012 in

had made a number of false or inaccurate statements, in the

which she was not seen to have left her house. The claim was

absence of dishonesty there was no contempt.

formally compromised in September 2012.

The applicant argued that the respondent was in contempt of court by having fraudulently exaggerated her claim for gain in

Committal for contempt

her statements in the medical reports, witness statement and

Tinkler and another v Elliott (2014) EWCA Civ 564

schedule of loss. It submitted that the surveillance evidence

From Issue 17

demolished her claim by showing a starkly different picture of her injury from that which she suggested. The respondent asserted that the symptoms described and the picture presented in the reports and her statement were accurate, save that there were periods when she had not suffered quite as much, and where the restrictions on her lifestyle were not as great. She denied

Although it is not a personal injury case, Tinkler and another v Elliott (2014) EWCA Civ 564 is a useful reminder of the threshold that needs to be passed if permission is to be secured to bring committal proceedings for contempt of court. This is relevant to cases where a claimant in a personal injury claim is alleged to

any dishonesty but accepted that she should have pointed

have been fraudulent.

out the variability in her symptoms. The applicant alleged that

The parties were embroiled in wide-ranging litigation. The

the respondent had tailored her evidence after seeing the

respondent had been engaged by a company connected to

surveillance evidence, and that it was inconceivable that 13

the Stobart Group as a helicopter pilot and aviation consultant.

days of random filming should by chance have occurred on her

The relationship broke down and the respondent complained to

“relatively good days”.

the Civil Aviation Authority that the company was committing 92

aviation offences. The CAA conducted a detailed investigation and

was in an equally good position to make that evaluation. Further,

interviewed a large number of witnesses, including the appellant

the exercise of the judge’s discretion when he considered what

– the chief executive of the Stobart Group, but decided not to

he referred to as “public interest, proportionality and other

prosecute because of insufficient evidence. The respondent was

discretionary factors” was fatally flawed. Whilst there was a

also involved in a property dispute with the appellant. The claim

strong public interest in ensuring that knowingly false statements

settled but the respondent started defamation proceedings against

made by parties in court proceedings should not go unpunished,

the appellant. Those were struck out as an abuse of process. In

this was not such a case. The judge failed to stand back and look

the meantime, the appellant and the company obtained interim

at the overall reality of the litigation. He failed to take account

injunctions against the respondent which restricted his freedom

of the fact that the incorrect, or allegedly untrue, statements

of expression. He breached those injunctions on a number of

of the appellant had all been canvassed as issues in the relevant

occasions. He sought to bring contempt proceedings on the

proceedings and that, where appropriate, injunctions had

basis that the appellant had made false assertions about him in

nonetheless been made, or not granted in the light of such

witness statements during the various litigations. The respondent

statements. He had also failed to take any account of the fact

made 58 allegations of contempt but was permitted to bring

that, on the history of the matter, the respondent had clearly

committal proceedings in respect of only seven allegations. Those

demonstrated that he was a vexatious litigant with an agenda to

included that the appellant had told a deliberate and fraudulent

pursue in relation to his past relationship with the Stobart parties

lie in claiming that he had been interviewed under caution by the

and he was not an appropriate guardian of the public interest. He

CAA and that he had untruthfully asserted that the respondent

was wrong to conclude that it was in the public interest that such

was making wholly unfounded allegations against him and his

allegations should proceed to a full committal hearing.

business activities.

Against the background of the full history of the matter

Allowing the appeal, the Court of Appeal held that the correct legal

such a result was disproportionate. The judge should not have

approach to be adopted on applications for permission to bring

permitted any of the allegations to go forward to a committal

committal proceedings was not in dispute and the judge had

hearing.

correctly summarised the relevant and well-known principles.

In respect of each allegation the starting point was whether a sufficiently strong prima facie case had been established that the

Aziz v Ali and related claims (2014) EWHC 1846 (QB)

statement relied upon was either untrue or had been made

From issue 024

recklessly as to whether it was true or false and was known to be likely to interfere with the course of justice.

Once a sufficiently strong prima facie case was demonstrated, it was then necessary to consider proportionality and public interest issues. However, the judge had not applied those principles correctly. He was wrong to conclude in relation to each allegation that there was a strong prima facie case on the evidence demonstrating that the appellant had knowingly made false statements.

The instant case was not one where the judge was making primary findings of fact based on the conduct of witnesses; rather he was evaluating whether a particular evidential threshold had been reached on the materials before him. The appellate court 93

Although they are cases on their own facts Aziz v Ali and related claims (2014) EWHC 1846 (QB) are of interest in the context of the courts’ increasing attention to stamping out fraudulent claims.

In the first claim, the claimant alleged that he had been driving his car when a second car had come out of a road to his left; that he had not been able to brake or stop until after the second car had collided with his own and that the driver of the second vehicle had admitted fault and given his details. The claimant gave three different versions of how he had made his claim for damages and what had happened to his car after the accident. The expert evidence stated that the damage to the car was incompatible with contact by a car in the circumstances alleged. There was further evidence that insurance claims, one of which involved the same

claimant, had been made in relation to five alleged accidents

not happened. The other passenger’s evidence was rejected; it

involving five different vehicles and that insurance policies had

was contradicted by the evidence of the claimant who said the

been taken out in the name of five different individuals said to

accident had not occurred and the expert evidence.

have caused the accidents very shortly beforehand. The same bank details had been used at the inception of each of the policies.

The judgment is silent as to any further steps that may be taken by the insurers in each case.

In the second, third and fourth claims, the claimants alleged that one of the claimants had been driving along a street when another car had failed to give way and had collided with them. They each

Liverpool Victoria v Thumber [Lawtel 16/07/2014]

claimed to have suffered injuries. One of these claimants later

From issue 027

gave evidence that the accident had not happened and that the claim had been planned as a way of obtaining money. The expert evidence stated that the car in which the claimants had allegedly been injured had been stationary when struck, which

Liverpool Victoria v Thumber [Lawtel 16/07/2014] sees another successful application by an insurer to commit a fraudulent claimant for contempt of court.

was incompatible with the circumstances alleged. The vehicles’

The claimant had alleged that, while driving his Audi, valued at

insurers, who had been joined as second defendants in each

£6,000, he had been hit by a BMW; that his car was written off; that

claim, contended that the two accidents had not happened and

he had suffered whiplash and had incurred car hire fees of over

that the claims were fraudulent.

£130,000. The driver of the BMW took no part in the claim but

Rejecting all of the claims, the High Court judge held that there was no doubt, on the evidence, that the accident described by the claimant in the first claim had not taken place and that the alleged negligence had not occurred. The expert’s evidence alone satisfied the court that the accident had not occurred as claimed. However, that conclusion was reinforced by the insurance evidence and the claimant’s different accounts of the aftermath of the accident. It was not credible that the same bank account had been used to pay for five different people. The inference to be drawn was that the policies had not genuinely been taken out by the individuals named as policyholder and that it was unlikely that there had been a genuine accident whereby a vehicle said to belong to the defendant had struck the claimant’s vehicle. The claimant’s account of the immediate aftermath of the accident had been

his insurer, the applicant, was joined as a second defendant and served a defence alleging fraud. On the trial date the claimant discontinued his claim and was ordered to pay costs on an indemnity basis. The second defendant insurer applied for the claimant’s committal but he obtained an adjournment on the basis that he had only had one week’s notice of the hearing and wanted to instruct legal representatives. He was told that the committal hearing would only be further adjourned if the court was provided with proper medical evidence of him being seriously ill. A doctor’s certificate was sent to the court ten days before the instant hearing stating that the claimant was suffering from a depressive episode and was unfit for work. His brother told the court that the claimant’s mental health had seriously deteriorated and that he might be hospitalised.

changeable, inconsistent and not credible. The inference to be

The High Court judge hearing the application held that if the

drawn was that he had not been telling the truth because the

claimant was unfit to attend court then his doctor should have

accident had not happened in the way he had alleged.

stated that on the certificate. The claimant might have been

There was no doubt, on the evidence, that the second accident described by the other claimants had not taken place and they

depressed, but that was not a reason for not attending court and no further adjournment would be granted.

had failed to establish that the alleged negligence had occurred.

The second defendant’s evidence showed that the damage to

The expert’s evidence alone satisfied the court that the accident

the cars was incompatible with the collision as alleged and that

had not occurred as alleged. That conclusion was reinforced

the claimant and the BMW driver were linked by a third-party.

by evidence by one of those claimants that the accident had

There was powerful evidence of fraud and dishonesty and the 94

excessive amount claimed for car hire had been the claimant’s

The High Court judge held that a person was only guilty of

undoing. It was plainly a fraudulent claim involving false witness

contempt if a statement was false and he knew it to be so.

statements and if the claimant had proceeded to trial he would

Bringing proceedings had to be in the public interest, taking into

have sought to gain money by perjury. Giving evidence dishonestly

account whether there was a strong case, whether the alleged

was plainly a contempt of court and the seriousness of insurance

false statements made were significant in the proceedings,

fraudhad been emphasised in previous cases. Twelve months’

whether the person understood the likely effect of the statements

imprisonment was the appropriate sanction.

and considering the deterrent effect of contempt proceedings.

Only limited weight should be attached to the likely penalty

Royal & Sun Alliance Plc v Fahad [Lawtel 21/10/2014] From issue 37 The case of Royal & Sun Alliance Plc v Fahad [Lawtel 21/10/2014] sets out in some detail the grounds on which a court will allow an application for permission to bring contempt proceedings.

and contempt had to be proved to the criminal standard. The respondent’s arguments went to the merits of the application rather than whether permission should be granted. There was a strong prima facie case but it was not the job of the instant court to make findings. It was important to deter false claims.

The public interest not only justified granting permission, but demanded it. There were different types of fraudulent claims;

The applicant insurance company applied for permission to bring

one where an accident had occurred but it had been exaggerated

committal proceedings against the respondent for contempt of

and one where there had been no accident at all. That latter

court. The respondent applied for relief from sanctions.

category was far more serious. Permission to bring the committal

The respondent had brought a damages claim after an alleged

application was granted.

road accident. The court found that the accident had been

Given that outcome and that the respondent’s submissions had

contrived and that the respondent had made false statements by

been considered, it made no practical difference if he was

asserting that the accident had been caused by another driver’s

granted relief from sanctions, but it was relevant to costs.

negligence and by stating that he did not know the other

The breach had been serious. The respondent’s medical notes

driver, when the evidence was that they were in a relationship.

showed that he was no longer unwell. He had been in the UK

The respondent’s evidence that there had been no collusion

shortly before the deadline and in any event he could have

was rejected. He failed to give seven days’ notice in writing of

emailed or telephoned from Iraq. The breach had not been an

his intention to attend the instant hearing, or provide a written

isolated occurrence. Relief from sanctions was refused.

summary of his submissions as required by CPR 81.14(5). He thus lost his right to be heard. Nevertheless the court allowed him to make submissions. The day before the hearing the respondent

Bate V Aviva Insurance UK Ltd

applied for relief from sanctions.

From issue 42

The applicant submitted that there was ample evidence from

The number of cases in which insurers seek to penalise claimants

which permission should be granted and that the false statements had been proved to be false at trial. It submitted that it was in the public interest to bring contempt proceedings as it was not a case of an exaggerated claim, but one that had been entirely fabricated, and that the respondent had also failed to pay costs orders made against him. The respondent submitted that he had faced language problems at trial, as English was not his first language. With regard to relief from sanctions, he submitted that he had not given seven days notice for good reason as he had been in Iraq and suffering from ill health.

95

for pursuing fraudulent claims is steadily increasing. The latest is Bate v Aviva Insurance UK Ltd [Lawtel 20/11/2014].

The claimant/respondent had brought proceedings against the defendant/applicant for an indemnity and damages after an accidental fire at his property. His claim was dismissed and he was found to have been actively dishonest in various ways when presenting his claim. The Court of Appeal upheld that decision.

The defendant sought to commit the claimant on the basis of the

trial judge’s findings of dishonesty. In particular, it alleged that

to its allegation that the claimant had created or colluded in the

he had created or colluded in the creation of false documents in

creation of false documents in support of his claim. However, it

support of his claim, which were prepared after the event as part

had failed to prove beyond reasonable doubt that he had wilfully

of a dishonest scheme. It also alleged that the claimant had acted

and deliberately interfered with witness evidence, or that he had

in contempt in relation to his disclosure obligations and that he

acted in contempt in relation to his disclosure obligations.

had wilfully and deliberately interfered with witness evidence to increase his prospects of success. The defendant did not call any witnesses to give evidence in support of its application.

The claimant gave live evidence to resist the application. In his evidence, he advanced a revised version of events which had not been raised either at trial or on appeal. At the time of this hearing,

But for the claimant’s personal circumstances, namely his age, poor health and previous good character, an immediate custodial sentence would have been inevitable. However, in all the circumstances, the appropriate sentence was one of nine months’ imprisonment, suspended for two years.

which was before the trial judge, he was 71 and in poor health.

The claimant denied the allegations made against him. He

Committal proceedings following a fraudulent claim

contended that it did not follow from the findings at trial that

From within Greenwoods

the defendant did not need to call witnesses to give evidence in support of its application, because such a course deprived him of a chance to cross-examine important witnesses, contrary to Article 6 European Convention on Human Rights 1950.

From Issue 35 Background The claim arose from an accident which was alleged to have

The deputy High Court judge held that the claimant’s arguments

occurred on 9 January 2012. The claimant alleged that our client’s

were misconceived: it would be absurd for the court to have to

insured had driven into the rear of her car, and then drove away.

revisit witness evidence it had already heard in order to arrive at the facts on which the instant application was based. The application for contempt formed part of the underlying civil action and so the instant court should start with those findings. It was for the court to reconsider the previous findings of dishonesty, which

The claimant issued proceedings in November 2012, claiming damages for whiplash and vehicle damage. The claim was defended on the basis that the insured was not involved in the crash.

were made on the basis of the civil standard of proof and ask itself

The claimant had also reported the incident to the police and

whether, after hearing the claimant’s evidence and submissions

our client’s insured was prosecuted for failing to stop following

in the present application, it was sure beyond reasonable doubt

the accident. He was acquitted of that offence.

that those findings were indeed correct. If it considered that what

In June 2013 the claimant served her witness evidence, in which

the claimant said might be true, he had to be given the benefit of the doubt and contempt could not be proved. It was clear that the allegations made in his live evidence were new allegations which gained no support from the documentary evidence. His evidence depended solely on an assertion which he had not made at trial. There was nothing in his further evidence which could affect the views set out in the trial judgment. In order to resist the committal application, he had changed his claims. Those changes did not overcome at least some of the difficulties raised previously and they were quite different in substance from what he had said throughout the proceedings and in evidence at trial. In the circumstances, the defendant had proved contempt in relation

she alleged that the accident had been witnessed by a passerby. It was alleged that this was an independent witness; but our enquiries revealed that the two women were well known to each other. This evidence was served on the claimant. In response she served a statement in which she admitted that she knew the witness but that she had lied to avoid the witness being disbelieved.

We applied to the court to strike out the claim, on the basis that it was an abuse of the court’s process. That application was refused by the court, but the claimant was ordered to serve another statement, setting out details of other accidents in which she had been involved.

96

The claimant served that further statement, alleging she had

Mr Justice Cooke awarded our client costs. He was alive to

only made a claim following an accident in 1999. We applied to

the fact that the claimant has little money available to her

strike out the claim again, as Cache records revealed she had been

and that she has had to take a loan to pay her own solicitors’

in accidents in 2006, 2007 and 2010. She discontinued her claim,

fees. After her bills are paid, but before food and shopping, she

on the understanding that each party would bear its own costs.

has only £130 per month available. The judge therefore ordered

Committal proceedings Proceedings were begun for permission to issue a claim for

she pay £7,500 towards our client’s costs, to be repaid in monthly instalments of £312.50, over a period of two years.

contempt of court against the claimant and her witness. The witness produced evidence to show she had withdrawn her statement many months before it was served; and we therefore agreed to withdraw the case against her. In March 2014 the

Court Ruling On “Fundamental Dishonesty” Gosling v Screwfix and Anor, (Cambridge County Court)

High Court granted permission to bring an action for contempt

From Issue 019

of court against the claimant, in respect of her lies regarding the

One of the exceptions to Qualified One Way Costs Shifting (QOCS)

witness’ independence and her subsequent failure to report her other accidents.

The claimant admitted the lies regarding the witness, but alleged

is where the court makes a finding of “fundamental dishonesty” on the part of the claimant and an order for costs may then be made in favour of the defendant to be enforced against the

that she had genuinely forgotten about her other accidents. We

claimant’s assets.

agreed with her that she would be sentenced for the former and

The first report of such an order has arisen from the case of

we would withdraw the latter allegation, in order to save costs and bring the case to a swift conclusion.

Gosling v Screwfix and Anor, (Cambridge County Court), in which the judge found the claimant had significantly exaggerated the

Sentence

extent of his injuries following a fall from a ladder.

At the High Court on 3 October 2014, Mr Justice Cooke sentenced

The defendants had adduced surveillance evidence which showed

the claimant. He found that the custody threshold had been passed and noted that she was already in significant financial difficulties, so a fine would not be appropriate.

Cooke J noted that the claimant had admitted her lie swiftly, albeit that she had little choice once she had been found out. He noted evidence from our insurer client that fraudulent claims are a real burden on the insurance industry. He observed that independent witnesses carry a lot of weight, particularly in low-value claims, where economics militate against detailed investigations.

He accepted that the claimant was of previous good character and the main breadwinner in her family. She cares for her mother, who is unwell, and she has two young children. As such, an immediate custodial sentence would be inappropriate; instead, her punishment is a six-week sentence of imprisonment, suspended for nine months.

the court that the claimant had exaggerated his injuries. The County Court judge ordered the claimant to pay the defendants’ costs on an indemnity basis. He held that in significantly exaggerating the extent of ongoing symptoms the claimant’s conduct was dishonest and designed both to deceive and give a false impression. He also held that the dishonesty, which impacted on about half the value of the claim was “on any view” sufficient to be characterised as fundamental. As a result, he was satisfied on the balance of probabilities that the claim was fundamentally dishonest.

Comment As we begin to see the demise of cases funded under old style CFAs, the relevance of QOCS will increase and so will the need for defendants to take steps to mitigate its impact. Effective and early Part 36 offers will be the principle tool but costs orders obtained against the claimant during the course of the proceedings will also be important. A finding of fundamental dishonesty will be relatively rare, but as this case illustrates, defendants must be vigilant for cases where it is relevant.

97

6. Credit hire

because he did not have the money to hire on the ordinary market,

Zurich Insurance Plc v Umerji (2014) EWCA Civ 357

little practical sense to debar the claimant from relying on his

From issue 012 Credit hire claims are often linked with those for personal injury. In Zurich Insurance Plc v Umerji (2014) EWCA Civ 357 the respondent/claimant had claimed against another driver after his car was damaged in an accident. The appellant was the other driver’s insurer. A liability judgment in default had been entered and the insurer was subsequently joined as a defendant. The claimant’s car had been worth about £8,000 and had been written off. Following the accident, he entered into a series of credit hire agreements to rent replacement cars, incurring rental fees of some £95,000 over a year-and-a-half. He claimed that he had been unable to afford to buy a replacement vehicle until the insurer paid him the pre-accident value of his old car. The claimant also incurred charges for recovery and storage of his old car for four months. The judge made directions for trial of the quantum issue and set a deadline by which the claimant had to confirm whether he intended to allege that he was impecunious at the time of the hire. He did not do so and an order at the next hearing contained a recital recording that he was debarred from relying on impecuniosity. At trial, the claimant indicated that he had not

and it operated in the same way as a matter of law. It would make impecuniosity for the purpose of claiming credit hire rates while allowing him to do so for the purpose of justifying the duration of the hire, which would require him providing full disclosure about his means, when the primary purpose of a debarring order was to establish whether the parties had to spend time and money going down that route. It did not follow from the fact that the order was discussed in the context of the claim for credit hire rates that there was a clear common understanding that that was the only intended impact of the order. Impecuniosity relating to rate and means was the same concept, and in both cases the burden was on the claimant to plead and prove his case. The claimant was therefore debarred from asserting that he could not afford to buy a replacement vehicle. It followed that he should only have been entitled to recover hire charges up to the date when he should reasonably have done so. It had been reasonable for him to wait until his car had eventually been disposed of for scrap before buying a replacement. He could have bought a replacement within a fortnight. Damages in respect of hire charges would therefore be awarded in respect of the period ending two weeks after disposal of the car.

had the means to buy a replacement as soon as he knew that

In relation to storage of the car, claimants’ advisers in similar

the damaged car was a write-off and the insurer asserted that

situations were encouraged to put the defendant’s insurers on

he was debarred from relying on impecuniosity. The trial judge

notice promptly that storage charges were being incurred and to

concluded that impecuniosity went to the question of credit hire,

impose a clear deadline after which the vehicle would be disposed

not duration of hire, and awarded damages for the entire period

of. However, in the instant case, the trial judge had not been wrong

of hire. He also held that the claimant had acted reasonably in

to hold that the claimant’s solicitors had done enough. Although

storing the car for four months because he would have been

they had not imposed an explicit deadline, they had made it clear

criticised if he had disposed of it before the insurer had a chance

that storage charges were accruing, and had received no reply

to inspect it. The disputed elements of the award were £92,387 in

of any kind, despite sending two chasing letters. The appeal in

respect of hire charges and £2,540 in respect of storage charges.

relation to storage charges would be dismissed.

Allowing the insurer’s appeal in part, the High Court judge held

Comment

that the trial judge had been wrong. The starting point had

It can be seen that this case provides clarification of a number of

to be the language of the debarring order, which purported straightforwardly to prevent the claimant from relying on his impecuniosity, without qualification. An averment by a claimant that he had to hire a replacement car for as long as he did because he did not have the money to buy one was a claim of impecuniosity, just as much as a claim that he had to pay credit hire rates

points that arise in credit hire cases.

First, impecuniosity is the same concept whether looking at the need for a claimant to use credit hire rates or when considering the period of hire claimed because the claimant did not have the means to buy a replacement car.

98

Secondly, the case confirms that the burden of proof in both

Allowing the appeal only in part, the High Court judge held that

instances is on the claimant to plead and prove his claim.

the evidence of the claimant’s means was unclear. He stated that

Thirdly, insurers must take notice when they are advised that storage charges are accruing and do everything possible to communicate to a claimant either that they wish to inspect the vehicle or confirm that it may be disposed of. Otherwise it may be difficult later to challenge the fact that storage was allowed to continue.

he could not, in all the circumstances, have afforded to pay for a hire car, but gave no indication of what those circumstances were, nor did he elaborate upon the nature and extent of his funds or available means. His bank statements showed little activity and could not have reflected his total economic activity. The judge based his conclusion on the continuous healthy balance in the claimant’s account, and he was entitled to do so, particularly as liability was not disputed and therefore the recoverability

Stevens v Equity Syndicate Management Ltd (2014) EWHC 689 (QB) From issue 013 Credit hire continues to be a fertile ground for disputes as illustrated by Stevens v Equity Syndicate Management Ltd (2014) EWHC 689 (QB). The driver of a car insured by the respondent insurer had collided with the appellant claimant’s car. Liability was not in issue. The claimant’s insurers referred him to a credit hire company who made arrangements for the repairs to his car, agreed the costs and funded them pending reimbursement from the respondent insurer. The credit hire company hired an alternative car for the claimant for 28 days whilst his car was at the garage. The repairs only started nine days after the commencement of the hire.

The hiring arrangement included excess waiver fees to extinguish any liability for an excess arising in the event of any damage to the hire car. The daily rate amounted to £198.60 inclusive of VAT. The judge found that the claimant was not impecunious in that he would not have been exposed to an unreasonable burden had he hired a car directly. He determined a daily basic hire rate of £75.62 inclusive of VAT by averaging the rates charged by four hire companies at different locations local to the claimant. He also determined the reasonable period of hire at 19 days.

The claimant appealed arguing that the judge: Should have concluded that he was impecunious

of reasonable hire charges was not an issue. When the bank statements were examined in some detail, the finding of lack of impecuniosity became all the more compelling.

To establish a basic hire rate the court had to search for the figure which a claimant was willing to pay on the basis that he had, in fact, looked at the ordinary car hire market for a temporary replacement. In doing that, a claimant’s evidence that he was disinclined to spend more than necessary was relevant, as was evidence of how a claimant had sourced cars in different contexts. Although under a duty to mitigate his loss, a claimant was not expected to seek details of possible deals available from every car hire provider in a particular locality. However, almost everyone seeking to hire a vehicle would investigate the market by a comparative search on the internet. A claimant could reasonably choose to hire from a company that was not the cheapest. Questions on that issue should be directed at exploring what he would have been willing to pay on the hypothesis that he would have looked into the car hire market. The judge considered the extensive data provided and focused on companies which provided vehicles in the appropriate group, in the locality in which the claimant lived, and with a nil excess. It was appropriate to consider nil excess rates as the claimant had tried to ensure that he would not have any liability in that regard. The judge did not rely upon the lowest rates available because the evidence did not provide any details concerning the additional cost of reduced or nil excesses. He concentrated upon four national organisations

Alternatively, should have identified a single basic hire rate rather

whose rates were readily accessible to someone seeking to hire

than averaging rates

a car. It was agreed that the judge erred in averaging the rates

Was wrong in determining the reasonable hire period at 19 days

available from those four companies. Whilst able to hire a car,

because the car had to be stripped first to determine the parts required, which then had to be ordered 99

the claimant was not especially affluent and had demonstrated his disinclination to spend more than was necessary. He would

have hired with a nil excess from a reputable company with a local presence. The correct approach to reflect the factors disclosed by the evidence would have led the judge to a figure only slightly less than the actual figure selected. The error had not resulted in any detriment to the claimant.

The car was not simply left at the garage which then did nothing for a protracted period. There was no evidence that having stripped the car, it could have been reassembled for the claimant to have continued driving it until the parts arrived. There was no failure to mitigate on the part of the claimant or the credit hire company, who for those purposes were his agents. Therefore the claimant was entitled to a further nine days hire at the rate identified by the judge.

Comment This is yet another case which illustrates that the burden of proving impecuniosity is on the claimant.

100

7. Periodical payments

there could be a total suspension of an order, as opposed to

AA (Protected Party) v BB and another (2013) EWHC 3679 (QB)

those reasons, the court was not satisfied that it had the power

a reduction or an increase, as referred to in CPR 41.8(3). For all of

From issue 001

to order periodical payments in the form suggested.

The Greenwoods’ case of AA (Protected Party) v BB and another

The 2005 order gave the court power to provide, in an order, for

(2013) EWHC 3679 (QB) is an illustration of how periodical

periodical payments to be varied where there was a chance that at

payment orders made by agreement between the parties may

some definite or indefinite time in the future the claimant would,

be used to settle claims, even where the court could not impose

as a result of the act/omission giving rise to the cause of action,

an order in the same terms.

suffer some serious deterioration or enjoy some significant

The claimant was aged 28 and lacked capacity. A deputy was due to be appointed by the Court of Protection to manage his affairs. The court had approved settlement of his claim which comprised payment of a substantial lump sum together with periodical payments. One aspect of the settlement remained outstanding, namely a proposal that the second defendant pay periodical payments of £11,500 per annum in respect of the future deputyship costs, including those relating to the Court of Protection. The parties had agreed that if the claimant regained capacity to control his own finances those payments would cease, but the payments would re-start if he subsequently lost capacity at a future date.

In seeking the court’s approval of the terms of a consent order, the claimant’s counsel submitted that when construing the requirement in CPR 41.8(a) to specify the annual amount of a periodical payment and at what intervals it would be paid, the word “intervals” did not merely mean the frequency of payments but could be construed as meaning an interval during which a claimant lacked capacity; the proposed order was within the damages (Variation of Periodical Payments) order 2005 The High Court judge held that read within the context of CPR41.8(1) (a) the word “intervals” was plainly referring to the intervals of time within the period of a year at which each periodical payment would be made. The reference in that subparagraph was to the annual amount awarded, how each payment was to be made and at what intervals. The drafter was not there referring to intervals of years or intervals between changes in the amount of the payments to be made. The provisions of CPR 41 did not enable the court to make orders starting and ending on a date which was uncertain. The court was also sceptical of a suggestion by the claimant’s counsel that under CPR 41.8 101

improvement in his condition. The circumstance for which it was intended to cater was a case where there was to be a reduction of or increase in the amount of periodical payments rather than a “stop/start” change. It was intended for the sort of case where it was necessary for there to be re- assessment of damages in the future. Article 7 of the order presented a further problem since it provided that a party could make only one application to vary in respect of each specified disease or type of deterioration or improvement. It was therefore not appropriate to make such an order.

8. Part 36

claimant to refuse the April 2007 and November 2007 offers; (2)

Rehill v Rider Holdings Ltd [Lawtel 16/01/2014]

conduct.

erred in not imposing a costs penalty for the claimant’s dishonest

From issue 003

Allowing the appeal, the Court of Appeal held that the question for

The case of Rehill v Rider Holdings Ltd [Lawtel 16/01/2014] is

the recorder was whether the claimant had been reasonable in

further evidence of the value of effective Part 36 offers, made at

not accepting the offers. By virtue of CPR

an early stage.

36.14(4)(c) the court had to have regard to the information

The claimant had crossed the road when the pedestrian crossing

available when an offer was made. The recorder had considered

light was red and was hit by one of the defendant’s buses. The

the medical evidence available at the time of the offers and noted

bus driver had not applied the brakes quickly enough. The

that in retrospect it had been prudent and reasonable to await

claimant sustained injuries that impaired his mobility. Liability

the claimant’s medical progress and that there had been issues of

was apportioned equally between both parties. In April 2007,

contributory negligence that had yet to be raised. If the claimant

the defendant offered to settle the matter for £75,000 but the

had indeed misled the lawyers, what was reasonable had to be

claimant refused. In November 2007, the defendant made a

based on what the claimant knew, and not on what the lawyers

Part 36 offer. The claimant again refused and the offer was

knew. He had reached the end of his recovery period when the

withdrawn in January 2008. By the time of that offer the claimant

November 2007 offer was made; he was discharged from hospital

had reached the end of his recovery period. His schedule of loss

in December 2007, and he knew in 2007 that he did not have

claimed over £71,000 to adapt his home as a result of his impaired

a genuine claim for adapting his home. The reality was that

mobility. In June 2009, the defendant made a further Part 36 offer

there was no significant uncertainty concerning the claimant’s

of just under £40,000 which remained opened for 21 days; the

orthopaedic injuries when the November 2007 offer was made,

claimant refused. Just before the quantum trial in April 2013, the

and those injuries formed the bulk of his financial claim. The

claimant accepted the defendant’s offer of £17,500. The parties

only uncertainty surrounding the injuries at that time were his

could not agree costs, and the recorder held that the June 2009

abdominal injuries, which formed a minimal part of his financial

offer had not been beaten and ordered the defendant to pay the

claim. It was clear that the recorder had overlooked the medical

claimant’s costs up until July 2009 and for the claimant to pay

evidence and his findings about the claimant’s mobility. The

the defendant’s costs from July 2009 on the standard basis. The

recorder had failed to evaluate the consequences of those findings

recorder also noted that the claimant had dishonestly inflated his

in financial terms which in turn vitiated his conclusions. It had

case, that he had exaggerated his injuries and lied about where

been unreasonable for the claimant not to accept the November

he had stepped into the road so as to minimise his culpability,

2007 offer; however the same could not be said of the April 2007

that he had disputed the expert evidence concerning his recovery,

offer as there was still uncertainty surrounding his orthopaedic

had embellished his claim for building work to his home and that

injuries at that time. Accordingly, the claimant was ordered to pay

he should have accepted the November 2007 offer. The recorder

the defendant’s costs from

did not order the claimant to pay the defendant’s costs before

21 days after the date of the November 2007 offer.

July 2009 as when the April 2007 offer was made there was uncertainty as to the claimant’s prognosis which continued until July 2008, and stated that although the claimant’s conduct had been reprehensible, it was not so egregious as to warrant a penal

If the overall effect of the recorder’s decision had been that the claimant received his costs for being dishonest then that would have been wrong; however that was not its effect. The recorder

costs order.

held that the costs incurred in promoting a dishonest case could

The defendant appealed submitting that the recorder had (1)

on the claimant’s conduct did not bind the costs judge. Very little

been wrong to conclude that it had been reasonable for the

not be reasonably incurred. Further, the recorder’s observations remained given that the claimant had been ordered to pay the 102

defendant’s costs from November 2007 and that the litigation

had been held liable to pay. However, the claimant had succeeded

had commenced in July 2008. Although the recorder had been

in its claim and the issues raised by that claim occupied a much

generous in not imposing a penalty for dishonesty and other

greater amount of time at the trial, and must have accounted

judges might have taken a stricter stance, that decision was

for a correspondingly larger proportion of the preparation. Having

within the ambit of the recorder’s discretion.

regard to those factors, in the absence of the claimant’s offer, a just order would have been for the claimant to pay 50% of the

Newland Shipping & Forwarding Ltd v Toba Trading FZC (2014) EWHC 864 (Comm) From issue 013 A commercial case of wider interest is Newland Shipping & Forwarding Ltd v Toba Trading FZC (2014) EWHC 864 (Comm).

The claimant had sued the defendant on two contracts. The matters were initially conjoined. On 8 May 2013 the claimant made a Part 36 offer to settle both claims for $2.9 million including interest but excluding costs. The defendant did not accept the offer and it expired on 29 May 2013. The claimant’s claims were then separated into two actions. The defendant failed to comply with case management directions and the claimant obtained default judgment against it for $6.6 million on the first contract. A default judgment on the second contract was later set aside. In the second action the claimant obtained judgment for approximately $335,000. The defendant obtained judgment on its counterclaim for approximately $2.5 million. The instant hearing concerned the costs arising out of the trial of the claimant’s claim on the second contract and the defendant’s counterclaim.

defendant’s costs of the action.

It was impossible to say that the judgment against the defendant in the second claim was “at least as advantageous” to the claimant as the Part 36 offer. The judgment was for $334,967 whereas the settlement proposal was for the defendant to pay $2.9 million.

Alternatively, the proper analysis might be that the two sums were incommensurable, as the judgment against the defendant related only to the second contract, whereas the proposed payment would have related to all claims and counterclaims in both actions.

On either view, the requirement of CPR 36.14(1) was not satisfied.

Part 36.14(1) was not apt to cover a situation where two different judgments were given at different times in two separate actions to enable the judgments to be aggregated and treated as if they were one. It would be unjust as it would mean that once the claimant had obtained a default judgment against the defendant on terms more advantageous than the Part 36 offer, the claimant would enjoy a “free ride” since interest would be accruing on its claim at a rate far higher than that required to compensate it for the loss of use of the money. The claimant would be able to resist the defendant’s counterclaim without being at any risk as to costs and the longer it took the defendant to obtain judgment,

The defendant submitted that Part 36 did not apply to the offer

the more interest the claimant would receive. Such a result

after the actions were separated. The claimant argued that the

would be completely contrary to the purpose of Part 36, which

judgments in each action should be added together for the

was to encourage the parties to reach reasonable settlements.

purpose of determining whether it had bettered the Part 36 offer.

Accordingly, once the two actions became decoupled, the

The High Court judge held that the general approach to costs where the claimant succeeded in its claim and the defendant succeeded in its counterclaim, used to be to make separate orders whereby the claimant would be awarded its costs of the claim and the defendant would be awarded its costs of the counterclaim.

claimant’s offer ceased to be effective. The offer was nevertheless a relevant consideration in deciding what order to make for costs.

If the defendant had accepted the claimant’s offer it would have achieved a more favourable overall result in the two actions.

Accordingly, the court made the following orders for costs:

However, the modern approach was to look at the proceedings

(a) the claimant was to pay 50% of the defendant’s costs of the

as a whole and start by identifying which party was overall the

action on the standard basis for the period 29 May

successful party. Applying that approach, it was clear that the defendant was the successful party as it had obtained judgment for a sum of money which very substantially exceeded the sum it 103

2013 (the date the offer expired) to 15 November 2013 (the date of the default judgment)

(b) the defendant was to pay the claimant’s costs on the indemnity

The claimant appealed and submitted that the judge had wrongly

basis from 29 May to 15 November. In the absence of any special

understood the defendant’s offer to be a Part 36 offer.

circumstances, an appropriate commercial rate of interest on sums for which judgment was given in US dollars was 6-month LIBOR plus 2.25%. Interest was to run from the date when liability to pay the sums arose until judgment was entered.

Comment As the judge in this case indicated, the old approach of ‘costs following the event’ has now gone. The courts will look at cases in the round and make costs orders which reflect more accurately the true success of failure of each party on the various issues in a claim, even where it splits into separate actions.

Allowing the appeal, the Court of Appeal held that it was clear that the judge had misunderstood the nature of the offer. It was not apparent from the transcript that he had read the offer in detail or to any extent at all. On being told of the offer, he had promptly informed the claimant of the “normal consequence” of failure to accept. In the closing exchange with the defendant, the judge had asked whether the claimant should pay the costs from 14 or 21 days after the offer. The defendant’s counsel stated that with a Part 36 offer it was “usually 21 days” before going on to say that “although [the defendant’s] offer -”, at which point the judge cut him off. The inference to be made from the exchange was that the judge regarded the offer as a Part 36 offer.

Saigol v Thorney Ltd (2014) EWCA Civ 556

If he had been aware that it was not, he would have known that

From Issue 018

the omission to accept the offer carried no “normal consequence”

The case of Saigol v Thorney Ltd (2014) EWCA Civ 556 confirms that a court should not consider an offer to have the status of a Part 36 offer unless it is intended to be made under that rule and is fully compliant.

and that there was no usual period of days after which costs fell to be paid. In such circumstances, he would have known that the making of the offer, and the claimant’s omission to accept it, was merely a factor to take into account in deciding the fair order as to costs. Nothing that the judge said in the course

The defendant/respondent specialised in tuning cars and

of the relevant exchange indicated that he understood that.

preparing them for races. The claimant/appellant took his vehicle

In considering that the offer was a Part 36 offer, his decision as

to the defendant to have it converted to a car fit for racing. The

to costs was materially flawed. Paragraph 4 of the costs order

defendant, having completed the work, refused to return the

was made in error and was set aside. The court substituted a

vehicle unless the claimant paid a sum in excess of what had been

new paragraph 4 which provided that “save as provided for in

agreed. The claimant did not pay and the defendant advertised the

paragraph 3 there is no order as to costs”.

car for sale. The claimant brought proceedings claiming the return of the car and damages for breach of contract. The defendant counterclaimed for payment of the sum that it claimed was still

Supergroup Plc v Justenough Software Corp Inc [Lawtel

due. At 1.48 pm on 8 March 2012, following an unsuccessful

30/06/2014]

mediation, the defendant made an offer to settle for £2,000. The

From issue 026

offer was to remain open until 12.00 noon on 9 March following which “it will lapse without further notice”. The offer was not accepted and lapsed; the case proceeded to trial. The judge found for the claimant for £745 on his claim and for the defendant for

As can be seen from the case of Supergroup Plc v Justenough Software Corp Inc [Lawtel 30/06/2014] Part 36 is still the subject of varying interpretations.

£375 on its counterclaim: the defendant would therefore pay a

The claimant/applicant had brought a claim against the defendant/

balance of £370 to the claimant. At the costs hearing, the judge

respondent and the defendant had counterclaimed for repudiatory

noted that the outcome was substantially a draw. He noted that

breach of an agreement. The defendant believed the claimant’s

as the claimant had refused the defendant’s offer, the “normal

claim to be spurious and weak. In November 2013 it served a

consequence” was that the claimant should pay the defendant’s

Part 36 offer of an amount that it was prepared to accept in full

reasonable costs from the offer date.

104

and final settlement of its counterclaim. In response to a without

an injunction restraining the defendant from joining another

prejudice letter from the claimant in April 2014, the defendant

company prior to the expiration of the twelve-month notice

stated that it had made an effort to settle the matter, that all offers

period in his contract of employment in April 2015. The claimant

were withdrawn and that it would only settle if the claimant paid

had issued its claim on 4 June 2014 and made a Part 36 offer

damages for breach of contract and the defendant’s costs. In May

five days later in which it would allow the defendant to join

2014, the defendant sent another letter proposing to settle for

another company in January 2015. The offer expired on 30 June

a higher sum. The claimant served a notice of discontinuance of

2014. The trial commenced nine days later and lasted for a week.

its claim in May and then wrote to the defendant purporting to

The judge ruled that the claimant was entitled to restrain the

accept the Part 36 offer. The defendant replied that that offer had

defendant from joining another company until April 2015. As the

been withdrawn by its April letter.

judgment was at least as advantageous to the claimant as the

In its application the claimant submitted that the defendant’s April letter was ambiguous. The reference in it to the withdrawal of offers related to costs, not the Part 36 offer, the defendant’s

Part 36 offer it fell within CPR 36.14(1)(b). The claimant made the instant application on the basis that the defendant had refused the Part 36 offer and the claim had not been a money claim.

reference to the Part 36 offer in its May letter meant that that

The defendant argued that the claimant was not entitled

offer was still on the table; and the counterclaim was not subject

to the order sought as his pleaded claim included a claim for

to the notice of discontinuance.

damages and therefore CPR 36.14(3)(d)(i), rather than 36.14(3)(d)

Refusing the application, the High Court judge held that a Part 36 offer was available for acceptance until it was withdrawn by serving written notice of withdrawal. There was no such thing as implied withdrawal. No specific form of written notice was required. An offeror just had to serve something in writing which stated in terms that its offer was withdrawn. The defendant’s Part

(ii), applied, and that no additional amount could be recovered with reference to costs. Also, that making such an order would be unjust as the proximity of the offer to trial meant that there was little time for negotiation, he had not received the claimant’s witness statements until the final day for accepting the offer, and an order would have a disproportionate effect.

36 offer was clearly withdrawn by its April letter. Its reference to

Refusing the claimant’s application, the High Court judge

the withdrawal of offers related to its offers to settle the matter,

held that the damages claim was only ever contingent, to be

not to its offers as to costs. Any reasonable solicitor would have

pursued if injunctive relief was not granted until 10 April 2015.

understood that the April letter withdrew the Part 36 offer. The

The particulars of claim made that clear. Since injunctive relief

defendant’s reference to the Part 36 offer in its May letter did

had been granted, the claim did not include a money claim. The

not mean that the offer was still on the table, it just emphasised

language of CPR 36.14(3)(d) directed attention to the time at

that it had acted reasonably in trying to settle in relation to

which the court was deciding whether to order payment of an

costs. It was not possible to revive a Part 36 offer by subsequent

additional amount; “the claim” as set out in CPR 36.14(3)(d)(i)

correspondence. There had to be a fresh Part 36 offer.

and CPR 36.14(3)(d) (ii) referred to the claim in respect of which

The Part 36 offer was an offer to settle the claim and counterclaim

the court had given a judgment which was more advantageous than the offer. If the defendant’s submission had been correct,

on the basis that those claims remained extant. After the notice of discontinuance, only the counterclaim was extant so it was not open to the claimant to accept the offer in any event.

Elsevier Ltd v Munro (2014) EWHC 2728 (QB)

then in any case where the principal claim was for an injunction but there was an alternative claim for damages, a defendant who had been enjoined after refusing a reasonable offer under Part 36 would have no exposure to any additional liability. That could

From issue 31

not have been the intention.

The application of Part 36 continues to exercise the courts. In

It might have been just to impose an additional amount if a

Elsevier Ltd v Munro (2014) EWHC 2728 (QB) the claimant obtained 105

claimant made a Part.36 offer which ought to have been seen

immediately as at least equal to the best outcome that the

In 1992 the claimant and his former wife had started a

defendant could reasonably expect. However, the defendant

quantitative trading business. The business was carried on in the

had a legitimate argument for a shorter period of restraint.

following years through a number of partnerships and companies,

Further, it was unduly harsh to criticise him for not accepting the

including the defendants. The claimant resigned from the business

offer promptly given the pace at which the proceedings were

in 2009 and set up a competing business. Each side alleged that

advancing, the resulting pressures of that pace and the late stage

the other was using software in which it owned the copyright.

at which he received the claimant’s statements. Imposing an

The defendants were substantially the successful party at trial. In

additional amount would involve an unjust element of penalty.

July 2013, the judge ordered the claimant to pay the defendants’ costs but made a deduction of 15% to reflect an aspect of their

Burrett v Mencap Ltd [Lawtel 08/09/2014] From issue 32 Subject to the outcome of any appeal, the case of Burrett v Mencap Ltd [Lawtel 08/09/2014] could have far reaching consequences. The defendant made a Part 36 offer in July 2013 in the sum of £15,000. In January 2014, following surveillance, the offer was varied under CPR 36.3(6) to £2,500.

The varied, reduced offer was accepted by the claimant within 16 days of service. However, the District Judge dealing with the costs consequences of the offer and acceptance found that CPR 36.3(7) provided no renewed period for consideration but related back to the ‘relevant period’ for acceptance of the original offer.

If this decision stands, insurers who receive evidence that a claim is fraudulent or exaggerated, but who have previously made a Part 36 offer may reduce the sum on offer by way of variation but without losing costs protection from the date the earlier offer expired.

counterclaim that was not pursued. In July 2012, the claimant had made a Calderbank offer. However, the judge exercised her discretion against awarding him his costs from that date, rejecting his submission that the Calderbank offer gave him substantially all that they had recovered at trial.

The claimant appealed and argued, among other things, that the judge had been wrong not to order either that the defendants pay his costs from the date of the Calderbank offer or at least that from that date each side should bear its own costs. The defendants argued that the effect of a Calderbank offer was to be assessed by analogy with the terms of CPR 36.14(1A), which defined a “more advantageous” judgment as one that was “better in money terms by any amount” than the relevant offer.

Rejecting the claimant’s appeal the Court of Appeal held that the judge had rightly identified three aspects of the final order which represented substantial improvements on the claimant’s Calderbank offer. For example, his offer did not include an injunction or an undertaking; whereas he had gone on to give an undertaking. The judge had carefully considered the offer but, by reason of the differences identified, she concluded that

Coward v Phaestos and others (2014) EWCA Civ 1256

it would not justify a departure from the usual rule that, if there was to be any order as to costs, the costs should be paid by the

From Issue 35

unsuccessful party. The exercise of the discretion vested in her

A number of cases have suggested that the value and status of

could not be faulted.

Calderbank offers has been increasing in recent years. A Part 36

The defendants’ submission could not be accepted, although

offer provides the best form of costs protection but a Calderbank offer may still have significant costs consequences for the offeree.

Although in Coward v Phaestos and others (2014) EWCA Civ 1256

that did not affect the outcome of the appeal. The starting point was to recognise that CPR 36 and CPR 44 were separate regimes with separate purposes. Part 36 was a self-contained

the offeror was not successful, the Court of Appeal considered

code dealing with offers of settlement made in accordance with

the relative values of each form of offer.

and subject to the terms of CPR 36, which specified particular consequences in the event that such offers were not accepted.

106

That those consequences included features which went far

the amount of the offer: they had neglected to include one of the

beyond that which might be ordered by way of costs under

heads of loss in their calculation. The issue before the court was

CPR 44 only served to underline that it was a separate regime

whether such a mistake would justify withdrawing the offer after

from Part 44. While Part 36 was highly prescriptive in its terms

it had been accepted.

and highly restrictive of the exercise of any discretion by the court in any particular case, Part 44 conferred on the court a discretion in almost the widest possible terms. CPR 44 contained no rules as to the way in which the court was to have regard to offers. In particular, and most obviously, even in the case of a money claim, there was no provision equivalent to CPR 36,14(1A). There was no warrant in the terms of CPR 44 for applying, by analogy or otherwise, a similarly rigid test. The task of the judge in any particular case was to exercise his or her discretion as to the just order for costs, having regard to all the circumstances of the case, including those specified in CPR 44.2(4). Clearly a payment into court or an admissible offer to settle was unlikely in normal circumstances to be of much if any relevance if the offeree had achieved significantly more at trial. The broad terms in which the discretion conferred by Part 44 was expressed came at the price of some uncertainty and some scope for argument as to costs.

It was in the nature of a discretionary remedy dependent on the particular circumstances of the case that there was more

The claimant argued that the test for withdrawing a Part 36 offer within the relevant period is taken from Cumper v Pothecary (1941) 2 KB 59, as adopted in Flynn v Scougall (2004)EWCA Civ 983, and extends to “matters such as fraud or mistake…” Clearly the claimant’s solicitors had made a mistake – therefore they should be allowed to withdraw the offer.

On behalf of our client, it was argued that “mistake” is a specific legal concept. It does not extend to simple miscalculation or misjudgement. The claimant’s solicitors had not made a mistake in law, nor would it be just to allow them to withdraw their offer on the basis of a simple error of judgment. Our client relied on the case of Hilton International v Smith (2000) in which the applicants sought to amend a notice of payment into court: they had made an error of calculation and had offered £46,000 rather than £6,000. Pitchford J in Hilton commented that, “(it) does not follow that, because one party makes an error of judgment in the course of litigation, it is just to permit that party

uncertainty than existed where there was a rigid rule. But the

to escape its consequences.”

courts were well accustomed to dealing with those cases where

Furthermore, Part 36 was designed with certainty in mind. It

it was arguable that the just result was not simply that the unsuccessful party paid the costs of the successful party in full.

would be counter to the purpose of Part 36 to allow the claimant to withdraw its offer in the circumstances. It would also run counter to the overriding objective – specifically as regards saving

Opposing an application to withdraw a Part 36 Offer From within Greenwoods From issue 024 Opposing an application to withdraw a Part 36 Offer Does a simple mistake in calculation provide grounds for withdrawing a Part 36 offer within the relevant period?

In a recent case, the claimant had applied to withdraw a Part 36 offer after notice of acceptance had been served. Greenwoods, acting on behalf of the defendant, successfully resisted the application.

The claimant’s solicitors stated that they had wrongly calculated 107

expense, and proportionality.

The District Judge accepted these arguments. Hilton was directly relevant. Mere miscalculation was not sufficient grounds for withdrawal. Granting the application would revive the litigation and lead to further expense, and would run counter to the overriding objective and to the clear purpose of Part 36. The application was therefore refused, with an order that the claimant pay our client’s costs.

We are grateful to Ezra MacDonald of Pump Court Chambers for preparing this article.

9. Damages

their loss by having the repairs done at a lower cost. That was

Coles and others v Hetherton and others (2013) EWCA Civ 1704.

Accordingly, the claimants’ loss was taken as the reasonable cost

From Issue 001 Although it is not a personal injury case, many readers will be interested in the decision in Coles and others v Hetherton and others (2013) EWCA Civ 1704.

The claimants’ vehicles had been damaged by the defendants’ negligence. Insurance policies provided by the claimants’ insurer provided for policyholders to choose its system for repairing cars, entitling the policyholder to a courtesy car, or to choose another repairer. The claimants all chose the insurer’s system, which involved the repairs being undertaken by a company within the insurer’s group of companies. The repair company sub-contracted the work to repairers. The defendants alleged that the insurer’s system inflated claims and challenged the sums claimed. The preliminary issues were whether (i) where a vehicle was negligently damaged and reasonably repaired, rather than written off, the measure of the claimant’s loss was the reasonable cost of repair; (ii) if the insurer arranged repair, the reasonableness of the repair charge was to be judged by reference to what the claimants could obtain on the open market or to what the insurer could obtain; (iii) if the insurer arranged repair, and where the amount claimed was no more than the reasonable cost of repair, that amount was recoverable.

wrong mitigation was not relevant in respect of that direct loss. of repair: that was taken, as a rule of thumb, as representing the diminution in value, although it might not always represent the full amount of the diminution.

There was no difference between the cases of uninsured and insured chattels. Even where the insurer’s rights became subrogated to those of the insured, the cause of action against the tortfeasor remained the claimants’, unless it was assigned.

Further, the benefits obtained under the insurance were irrelevant in assessing damages. The defendants had argued that the instant case was outside those general rules because the insurer had acted as the claimants’ agent when arranging repairs so that the contract between the repair company and the repair sub-contractor was relevant for ascertaining repair costs. That argument was unsupported by the facts. The policies did not provide that the insurer would be the insureds’ agent and the claimants had not given the insurer authority to enter repair contracts on their behalf. Thus the repairer could not recover repair costs from the insured. Further, the defendants could not rely on Copley v Lawn (2009): that case recognised that where a claimant received an offer to make amends, in deciding whether the claimant acted reasonably, the advice he could reasonably have been expected to obtain from other professionals was to be taken into account, but it went no further than that, and did not

Upholding the decision at first instance, the Court of Appeal held

undermine the general rules. If the claimants’ insurer arranged

that where a chattel was damaged by negligence, direct loss was

repair, the reasonableness of the repair cost was to be judged

suffered as soon as the chattel was damaged. The measure of

by reference to what the claimant could obtain on the open

that loss was the chattel’s diminution in value. Events occurring

market.

after the damage were irrelevant to calculating diminution in value. Subsequent destruction, a decision to delay repairs, or an ability to have the repairs done at less than cost would not prevent recovery of the diminution. Generally, the courts calculated that diminution by considering the reasonable cost of repair so as to put the chattel back in the state it had been. In general, that was a convenient practice which courts should continue to follow. A claim for diminution in value was one for general damages. The cost of the repairs was not itself the loss suffered.

The defendants had argued that the claimants could not recover the full cost of repair to the insurer because they had to mitigate

If the insurer paid for repairs and the claimant sued for the diminution in value, the court only had to consider whether the sum claimed was equal to or less than the notional sum the claimant would have paid, as a reasonable cost of repair, on the open market. The court would examine the components of the notional overall figure and would then compare that figure with the total actual sum. Accordingly, the court would not have to examine the administrative charges included in the total repair cost paid by the insurer to the repair company. The question was not whether each item was reasonable, but whether the overall cost was reasonable. Courtesy car costs could not be part of the 108

repair costs. However, the right to a replacement car was set out

recoverable under S3(5) of the 1976 Act, it was not appropriate

in the policy and was therefore a contractual benefit; provided

to make such an award in the instant case because of the

that the benefit was at a reasonable rate and was reasonably

acceleration of symptoms associated with a pre-existing condition

incurred, it was recoverable. There was no question of mitigation.

by a relatively short period.

The claimant exercised rights contracted for before the tort had occurred; that was not mitigating the loss of use of the vehicle.

Comment Notwithstanding the favourable outcome of this decision from the claimants’ point of view, the Competition Committee has expressed concern about the way in which non-fault drivers’

An award for loss of earnings based on a period of five years and four months was made in the sum of £2,000 and loss of DIY skills led to an award of £2,500. No award was made in respect of care, medical fees, accommodation or travel as there was no evidence that these had been increased as a result of the defendant’s negligence.

insurers are able to seize control of the repair and claims

Although the principle of loss of special consortium had been

processes with neither the at fault insurer or the claimant having

recognised in a husband and wife relationship, there was a distinct

any means of exercising any control. We may well see controls

overlap with the award of damages for bereavement. Moreover,

being introduced to prevent these practices.

the case law demonstrated substantially longer periods over which such a loss had taken place. In the circumstances, it was

Fatal Accident Brown (deceased) v Hamid (2013) EWHC 4067 (QB) Humphrey v Aegis Defence Services Ltd [Lawtel 15/01/2014] From issue 002 The case of Brown (deceased) v Hamid (2013) EWHC 4067 (QB) will be of interest to those dealing with fatal accident cases.

The deceased had died in 2012. He had been ill for many years but it was admitted that his death had been accelerated as a result of the defendant’s clinical negligence. On the evidence the judge found that the defendant’s failure properly to diagnose the deceased’s condition had accelerated the onset of more severe symptoms associated with his pre-existing condition by a period of about 12 months.

not appropriate to found a separate head of damages on that basis in the instant case.

A second case under this heading is Humphrey v Aegis Defence Services Ltd [Lawtel 15/01/2014]. It is very much a case on its own facts but shows how insurance payments from third parties may complicate the assessment of damages in a personal injury case.

The claimant had been a member of the Royal Marines and undertook close protection work in Iraq. He sustained permanent shoulder injuries during a stretcher-carrying training exercise after a team member dropped the stretcher. He contended that the defendant should not have allowed the team member to take part as he was unfit. The defendant denied liability. The claimant had the benefit of UK insurance payments which amounted to £31,000 and was also entitled to insurance payments under US law, receiving $1,200 a week. The claimant and the US insurer

Although damages for loss of expectation of life were not

were negotiating a lump sum to replace the weekly payments.

recoverable, in assessing damages for pain and suffering the court

He had made it clear that he would give credit for any insurance

was entitled to take into account any suffering likely to have been

payments made if he succeeded at trial.

caused to the deceased by his awareness that his expectation of life had been reduced. He had suffered significant distress and anxiety as a result of the impact of the delayed diagnosis on his health. The appropriate award of general damages was £8,500.

In this application for a split trial of the issue of liability the claimant submitted that if he succeeded at the forthcoming trial then the judge would be placed in the impossible situation of determining quantum before a lump sum was agreed in respect

An award of £11,800 was made for bereavement under the Fatal

of the $1,200 a week. The judge would then have to offset the

Accidents Act 1976. Although funeral expenses were usually

weekly payments against any damages awarded, and would be forced to make an order that would leave the claimant significantly

109

short of the amount that he would have recovered if a lump sum

the claimant, whom the defendant had never employed, was

had been agreed instead. The defendant submitted that it would

also diagnosed with mesothelioma; as she had come into contact

not be proportionate to order a split trial as it was not known when

with asbestos when she washed the deceased’s work clothing.

the lump sum might be agreed and the issue of quantum might be

Proceedings in the claimant’s capacity as widow and administratrix

pushed off to an unknown date in the future.

of her husband’s estate under the Law Reform (Miscellaneous

Allowing the application the deputy High Court judge held that the claimant’s submission that his damages would be significantly and unfairly reduced if the court had to quantify them without knowing what lump sum he would receive from the insurer was

Provisions) Act 1934, and also as a dependant under the Fatal Accidents Act 1976 were settled by consent, and damages for loss of dependency were based on the claimant’s remaining life expectancy being 0.7 years due to the mesothelioma.

a strong one. Further, it was possible and likely that if he was

The claimant had also issued proceedings in her own right for

successful at a trial of liability, that quantum could be agreed and

damages for negligence and breach of statutory duty. Liability

a further trial would be avoided, along with the associated costs.

was again conceded and damages agreed at £310,000, but

It might also force the parties to come to an agreement on the

recovery of a further £200,000 was denied in relation to her

lump sum prior to the trial of quantum. If the defendant were to

future dependency claim. The claimant argued that but for the

succeed at the liability trial, then there would be no need for the

defendant’s negligence, her life would not have been cut short

quantum trial. On balance, any duplication of work with regard to a

and the assessment of her dependency claim in the first action

second trial was small compared to the advantages of a split trial.

would have been significantly greater. The issue was whether the

The claimant had also argued that there was a risk that under US

claimant’s common law dependency claim in her own right was a

law the insurer would seek reimbursement of damages recovered

recoverable head of damage. The claimant was dismissed at the

in the action. However, as the claim was against the employer

first instance.

rather than a third party, there was only a very small possibility of a “double deduction”. If that had been the claimant’s only submission then it would not have been sufficient to justify a split trial. However, the difficulty of quantifying damages in the absence of a lump sum meant that the application should succeed.

In her appeal, the claimant submitted that it was in principle legitimate to allow as a head of damage a diminution in value of a chose in action resulting from a negligent act. Allowing the appeal, the Court of Appeal held that there was no reason of principle or policy which deprived the claimant from recovering damages which represented the loss she had in fact suffered as a result of

Fatal Accident Haxton v Philips Electronics Plc (2014) EWCA Civ 4 From issue 004 Cases relating to damages in fatal accident cases are relatively rare and the case of Haxton v Philips Electronics Plc (2014) EWCA Civ 4 is therefore of particular interest, although, as the court made clear, the point in issue was one of some novelty. The claimant had suffered a reduction in her damages because of the operation of the Fatal Accidents Act. Could she recover the shortfall as a head of damage in her own claim?

the curtailment of her life by the defendant’s admittedly negligent action. The 1976 Act conferred a statutory right to recover for the loss of dependency and in the claimant’s claim under that Act she could not recover more than her actual loss; but there was no reason why the diminution in the value of that right resulting from the defendant’s negligence could not be recovered as a head of loss in her personal action. That did not interfere with the principles governing the payment of compensation under the legislation; they were left wholly unaffected. The claimant’s claim was a common law claim for damages for loss of dependency; it was one for diminution in the value of a valuable chose in action, a statutory right. There was nothing in the language of the 1976

The claimant’s husband had died as a result of contracting

Act or the authorities which suggested that there was any special

mesothelioma through exposure to asbestos during his

attribute distinguishing that particular chose in action from any

employment with the defendant for over 40 years. Subsequently

other. That head of loss was recoverable in law. Moreover, in the 110

same way that a loss or diminution of a contractual right might

The appellant/claimant, as personal representative of the

be recoverable even though it was not directly suffered by a

deceased’s estate, appealed against a decision awarding no

claimant, a fortiori that should be the case where, as in the instant

damages for pain, suffering and loss of amenity, or for mental

case, the reduction in the dependency compensation was a loss

anguish, arising from the admitted negligent failure of the

actually suffered by the claimant when her dependency claim

respondent/defendant general practitioners to diagnose his late

under the Fatal Accidents Act was settled. The fact that the source

wife with stomach cancer as early as they should have done.

of that right was statutory and not contractual was not a material distinction.

For several months the deceased had been visiting the defendants complaining of various stomach-related symptoms until, in March

The claimant’s personal dependency claim was not too remote: it

2008, she was diagnosed with stomach cancer. She was advised

was reasonably foreseeable that a curtailment of life might lead to

that the cancer was too advanced to treat and thereafter she

a diminution in the value of a litigation claim and if a claimant had

received only palliative care until she died in August 2008. She

such a claim, a wrongdoer must take the victim as he finds him. It

was 32 and had four small children. The claimant claimed against

had to have been foreseeable to the defendant that the claimant

the defendant on behalf of himself and the children under the

would have dependency rights which would be diminished as a

Fatal Accidents Act 1976 and on behalf of the deceased’s estate

result of its negligence. The claimant was entitled to an additional

under the Law Reform (Miscellaneous Provisions) Act 1934. The

£200,000.

defendants admitted liability for the delay in the diagnosis and the consequent delay in treatment.

Fatal Accident Kadir v Mistry and others [Lawtel 27/03/2014] From issue 013 Outside of mesothelioma claims, there are few cases reporting the basis of awards for pain, suffering and loss of amenity for the period between a negligent act and the death of the victim.

The case of Kadir v Mistry and others [Lawtel 27/03/2014] is therefore of interest, particularly as it is an even rarer example of an award being made under S1(1)(b) Administration of Justice Act 1982. That section states:

The claimant gave evidence that in March 2008 the family was told by doctors that the deceased might have survived if she had been diagnosed sooner, and that during a home visit in May 2008 she asked her GP why she was not diagnosed earlier and whether she would have survived if she had been. The trial judge found that if the defendants had not been negligent the deceased would have been diagnosed in June or July 2007 and would probably have lived until July or August 2010. He found that if the deceased had been diagnosed earlier she would have suffered the same symptoms as she did, albeit later, and would have had to endure intensive and gruelling treatments, so he awarded no damages for pain, suffering and loss of amenity. He also rejected the claim

In an action under the law of England and Wales or the law of

under S1(1)(b) Administration of Justice Act 1982 for damages in

Northern Ireland for damages for personal injuries

respect of mental anguish caused or likely to be caused by the

no damages shall be recoverable in respect of any loss of

deceased’s awareness that her life expectation had been reduced.

expectation of life caused to the injured person by the injuries;

Allowing the claimant’s appeal, the Court of Appeal held that it

but

was important to bear in mind that there were no special rules

(b) if the injured person’s expectation of life has been reduced by the injuries, the court, in assessing damages in respect of pain and suffering caused by the injuries, shall take account of any suffering caused or likely to be caused to him by awareness that his expectation of life has been so reduced.

111

for the assessment of damages in cases under the 1934 Act: the court was required to undertake the conventional exercise, namely decide what pain was occasioned by the negligence. If the court was looking at a living claimant facing an early death, like the deceased, the court inevitably had to compare the facts as they occurred with the likely facts if there had been no negligence.

On that basis, the fact that the deceased would have had the

insurance company. The claimant brought proceedings against the

same symptoms two years later was relevant, as was the pain of

defendant in England, by virtue of Regulation 44/2001. She later

treatment. The judge had been correct on the evidence to refuse

had two children with a new partner. The court was required to

the claim for pain, suffering and loss of amenity.

determine whether the Fatal Accidents Act 1976 or the German

“Awareness” in S1(1)(b) of the 1982 Act did not mean strictly certain knowledge. As a matter of ordinary humanity, if there was good

Burgerliches Gezetzbuch (BGB) governed the damages that could be recovered.

reason for the anguish, then it could be inferred that the sufferer

The Supreme Court held that the 1976 Act provided for a measure

would have suffered some. The claimant had given evidence that

of damages substantially more favourable to the claimant than the

the deceased had believed that the delay had caused the cancer

corresponding provisions of the BGB. In particular, damages under

to spread. The issue of why she was not diagnosed earlier was a

the BGB took account of rights to maintenance from subsequent

live question during her last months. There was plainly material

relationships, whereas S3(3) of the 1976 Act excluded remarriage

that gave rise to the proper inference that she feared on good

as a relevant consideration. In addition, the 1976 Act awarded a

objective grounds that her life expectancy had been reduced by

solatium for bereavement but the BGB did not, although a widow

the delayed diagnosis. It was necessary to prove that she knew

might be entitled to compensation for her own pain and suffering

that it was reduced.

if it went beyond normal grief and amounted to a psychological

No cases had been found that were relevant to the assessment

disturbance comparable to physical injury.

of damages under S1(1)(b) of the 1982 Act for the deceased’s

The deceased’s death occurred before Regulation 864/2007

suffering occasioned by her awareness of her reduced life

(Rome II) came into force and any cause of action arising out

expectation. On the evidence, her mental anguish was proved for

of it was governed by the Ss 9 – 15 Private International Law

the three-month period from May 2008 until her death. It was

(Miscellaneous Provisions) Act 1995 which partially codified the

important to recognise that there was no psychiatric injury, but

choice of law in tort. The combined effect of those sections was

there were other important elements: she was a young woman

that issues in respect of personal injury were to be determined

with four small children. Her anguish must have been exacerbated

according to the law of the place where the victim suffered the

by her knowledge that they would be left without her and that she

injury, unless that law was displaced on t he ground that the tort

would not see them grow up. It was proper to take those factors

had substantially more significant connection with England. Those

into account. Adopting a broad-brush approach, £3,500 would

rules were subject to the proviso in S14(3)(b) which preserved

do justice.

the distinction between substance and procedure. Questions of procedure were governed by the law of the forum and questions

Fatal Accident Cox v Ergo Verisherung AG (2014) UKSC 22 From issue 014 In Greenwoods’ Alert 316 we reported the decision of the Court of Appeal in Cox v Ergo Verisherung AG. The case has now been to the Supreme Court on appeal and is reported at (2014) UKSC 22.

of substance were governed by the lex causae.

The relevant German damages rules were substantive because they determined the scope of the liability. English law would regard it in the same light; questions of causation were substantive.

Such questions included questions of mitigation because they determined the extent of the loss for which the defendant ought to be held liable. It was not necessary to decide whether the rules under 1976 Act were procedural or substantive as they did

The claimant/appellant’s deceased husband had been an officer

not apply under their own terms. They did not lay down general

serving in the British army in Germany. He was killed when he

rules of English law on the assessment of damages, but only rules

was hit by a car driven by a German national. The driver accepted

applicable to actions under the Act itself. Therefore, an action to

liability. He was insured by the defendant/respondent, a German

enforce a liability whose applicable substantive law was German, 112

was not an action under the Act to which the Act could apply.

The deceased died from malignant mesothelioma in August 2009

The German rules on damages applied. The claimant was entitled

at the age of 46. She had contracted the disease through exposure

to damages for the loss of her legal right of maintenance from

to asbestos while working as an administrator for the defendant

the deceased. Credit had to be given for maintenance from her

between 1997 and 2007. She was diagnosed in March 2009,

subsequent partner since the birth of their child, but credit did

when she developed a hydro-pneumothorax and had to have a

not have to be given for maintenance received from her partner

chest drain inserted. As she deteriorated she developed pleuritic

before they had a child, when he was under no legal obligation to

aching, underwent an incomplete left pleurectomy and lung

maintain her.

decortications, and was treated in hospital for vomiting, sickness

It was also necessary to determine whether the choice of law arrived at, in accordance with S11 of the 1995 Act, was displaced by some mandatory rule of the forum. There was nothing in the language of the 1976 Act to suggest that its provisions were intended to apply irrespective of the choice of law derived from ordinary principles of private international law. It was possible for

and pain. The claimant claimed as the deceased’s widower and as the administrator of her estate. During the course of the marriage the deceased had managed the household and had been responsible for cleaning, cooking, laundry, ironing, shopping, walking the dogs, gardening and decorating. Liability was not in issue.

such an intention to be implied if the purpose of the legislation

The High Court judge assessed general damages for pain, suffering

could not be achieved unless it had extra-territorial effect, or if the

and loss of amenity at £80,000. The J C Guidelines gave a bracket

legislation gave effect to a policy so significant that parliament had

of £51,500 to £92,500. Although there were no appellate decisions

to be assumed to have intended it to apply to anyone resorting

on quantum, two broadly comparable first instance decisions were

to an English court. However, the question of extra-territorial

taken into consideration.

application could not have been an issue at the time the 1976 Act was passed. Further, the whole purpose of S1 of the 1976 Act was to correct an anomaly in the English law of tort. Foreign laws were unlikely to exhibit the same anomaly. There was no reason why parliament should have intended the 1976 Act to apply to foreign fatal accidents with no connection to England or English law. It did not have extra-territorial effect.

(Per Lord Mance) It made no difference to the outcome of the appeal whether the provisions of Ss 3 and 4 of the 1976 Act were substantive or procedural. If substantive, they were irrelevant to a tort subject to German substantive law. If procedural, they could not expand a defendant’s liability under the substantive principles of the relevant governing law.

The cost of the deceased’s care was agreed at £11,520, disbursements at £3,587.91, and loss of her income during her illness at £2,313. £5,749.60 was awarded for the loss of the deceased’s services during her illness. That was broken down into £4,669.60 for general household tasks, £780 for gardening and £300 for decorating.

There were agreed awards of £11,800 for bereavement and £2,283 for funeral expenses. There would be no award in respect of a wake (£725). Had she not died, the deceased would have worked for many more years. The claimant therefore claimed for income dependency and for loss of domestic services. He urged a departure from the conventional method of calculating the multiplier. He submitted that losses up to the date of trial should

Fatal Accident Knauer v Ministry of Justice (2014) EWHC 2553 (QB) From Issue 030 In Knauer v Ministry of Justice (2014) EWHC 2553 (QB) we have a relatively rare but helpful report of the assessment of damages in a fatal accident case.

113

be treated as special damages, with a small discount for the uncertainties of life but none for accelerated receipt and that the multiplier for future loss should be calculated from the date of judgment. The court would have followed that route had it been able to do so. However, it was bound by Cookson v Knowles (1979) and Graham v Dodds (1983) to adopt the conventional approach.

For income dependency from 2009 to trial, there was an award of

£23,182. A dependency ratio of 75% was be applied to past loss of income, and one of 66% to future loss, to reflect the fact that the youngest of three sons was 21 and was at university. Allowing a three-month deduction for uncertainties, the deceased’s income up to trial would have been £59,522. The claimant’s would have been £85,837. Between 2007 and 2009, they had run a public house together, planning to sell it in 2011 whereupon the deceased would have returned to paid administrative work without much difficulty. In fact, they disposed of it when the deceased became ill.

Comment From a defendant perspective the most significant aspect of this judgment was the judge’s flat refusal to take into account that in the five years since the deceased’s death the claimant had not engaged any of the services for which he claimed. While the judge acknowledged that he could have taken into account the claimant’s death prior to the assessment of damages he was otherwise bound by Hay v Hughes and the claimant was entitled to the value of what he had lost.

For future income dependency there was an award of £82,136.

Up to the deceased’s retirement age there was an annual loss of £5,835 with a multiplier of 10.93; from the deceased’s retirement age to the claimant’s retirement age there was an annual loss of £7,026 with a multiplier of 1.34; and from the claimant’s retirement age onwards there was an annual loss of £1,521 with a multiplier of 5.88.

For past services dependency there was an award of £88,160 calculated using a multiplier of 4.86 and a multiplicand of £18,140. The deceased had spent 20 hours per week on household tasks (for which the judge allowed £8.98 ph), excluding gardening and decorating (£12 ph each). In calculating the multiplicand for future services dependency, the claimant sought an amount equivalent to the annual cost of engaging a resident housekeeper.

However, it would not be reasonable to require the deceased to meet such a cost if broadly similar services could be obtained by other means. Such continuity of services could be provided by an agency for £16,640 per annum. Gardening and decorating services would cost a further £1,500 per annum (£900 for gardening and £600 for decorating). There would be no award for travel costs or online shopping delivery charges. It was irrelevant that since the deceased’s death the claimant had not engaged a housekeeper, gardener or decorator; he was entitled to the value of what he had lost (Hay v Hughes (1975)).

For future services dependency there was an award of £329,241, calculated using the same multiplicand with a multiplier of 18.15. The appropriate award for loss of intangible benefits was £3,000, Fleet v Fleet (2009). The total award excluding interest was therefore £642,972.51.

Interim Payments Smith v Bailey (2014) EWHC 2569 (QB) From Issue 31 It has been some time since there has been a case report relating to an interim payment application and Smith v Bailey (2014) EWHC 2569 (QB) will be of concern to defendants.

The

claimant/respondent

and

defendant/appellant

had

been in a road traffic accident, which caused the claimant to be wheelchair dependant for life. He moved into rented accommodation as his previous property, which he had owned, was unsuitable for a wheelchair user. He later identified a new property which he considered to be more suitable. The claimant brought proceedings against the defendant, who denied liability and pleaded contributory negligence. The Master awarded the claimant an interim payment for accommodation costs and, applying the first stage of the test in Eeles v Cobham (2009), awarded that which he considered to be a conservative estimate of what the claimant would be awarded as a capital sum after trial. The Master stated that the burden of proving contributory negligence was on the defendant and that there was no evidence to support that finding. The claimant used the interim payment to purchase the new property.

The defendant appealed and argued that on an interim payment application, the burden was not on him to establish contributory negligence but on the claimant to establish the amount he was likely to recover after trial. Taking into account:

114

• The possibility of a finding of contributory negligence

There were compelling reasons for permitting the claimant

• That there was a real prospect of a reduction for contributory

to buy; he had owned his own house, he wanted to provide

negligence as the claimant could have taken avoiding action • That the Master erred in treating the accommodation costs as falling within stage one of the Eeles test as he could not be confident that the trial judge would decide that the claimant’s needs were better met by buying rather than renting a property • That the Master’s order awarding interim payment risked fettering the trial judge’s discretion; and • That allowing the claimant to purchase the property created an unlevel playing field Dismissing the appeal the High Court judge held that on an interim payment application there was an evidential burden on the defendant to put before the court evidence of contributory negligence. The instant case was not one where such material could not reasonably be expected to have been available to the defendant at the time of the application, as he had had ample opportunity to adduce evidence to the court. The Master had to decide the likely award of damages by reference to the allegations of contributory negligence on the evidence before him. On the evidence he was correct to reject the possibility of a finding of contributory negligence.

The defendant had not provided evidence that he had driven in

security for his wife and he did not have a long tenancy of his rented accommodation. If a defendant wished to argue that accommodation costs should not be dealt with, as was usual in stage one of Eeles, it was necessary for him to adduce evidence to support that submission and to satisfy the court that there would be an issue to that effect at trial. However, the defendant had failed to adduce evidence of the availability of suitable rental properties and had not suggested that the claimant’s accommodation needs could be reasonably met by renting rather than buying.

If the interim payment was no more than the capital sum which the trial judge would award for accommodation there was no question of it fettering his discretion in relation to other heads of future loss.

There was no real prospect of the trial judge feeling inhibited in concluding that the property was unsuitable. The risk of prejudicing the trial process by creating an uneven playing field was not a bar to awarding an interim payment and only a factor to be considered. The interim payment represented the minimum amount to which the claimant was entitled. When awarded damages at trial he would be free to spend them as he wished and similar freedom should be attached to the interim payment.

a manner which should have made the claimant take avoiding

Comment

action. In the absence of evidence of contributory negligence the

This case highlights at least two problems that defendants face

Master was justified in treating the likely award of damages to be on the basis of full liability.

The Master could not be faulted for dealing with accommodation costs within stage one of the Eeles test. The Master and the instant court could have a high degree of confidence that the trial judge would award a capital sum in respect of accommodation needs. Whenever there was a serious injury it would very rarely be reasonable to require a claimant to rent rather than buy a property.

Where a claimant wished to buy a property it would only be appropriate in exceptional circumstances to deal with accommodation costs by way of a periodical payment order.

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when confronted with an interim payment application linked to the purchase of a property. The first is the need to address in detail any arguments in relation to liability on the basis that the burden of proving contributory negligence lies with the defendant.

The second is the age old concern that the defendant only has a chance of displacing the claimant’s accommodation claim if it identifies and offers the claimant a viable alternative. This case illustrates that on both issues the defendant must be gathering the necessary evidence at a very early stage.

Interim payments Barrett v East Herfordshire NHS Trust [Lawtel 13/11/2014] From issue 40 Since the case of Eeles v Cobham (2009) reports relating to interim payment applications have been less frequent in high value personal injury cases where periodical payments are likely to be awarded. However, in Barrett v East Herfordshire NHS Trust [Lawtel 13/11/2014] the issue once again came before the court.

The defendant trust had admitted liability for claimant’s injuries caused by a failed tracheostomy. The procedure had left him

to live informally and with freedom, to be able to have friends and family to visit, and to get about in the community. He was 56 years old; he should not have to wait longer to do that. In terms of the claimant living further away from his wife, her health was deteriorating and the he found it hard to see her. The size of the interim payment relative to the likely damages would not fetter any future periodical payments; nor would the trial judge be inhibited from taking a different decision. By then, probably a year and a half away, he would be able to tell if the move to the bungalow had been successful. The interim payment would constitute a reasonable proportion of the damages.

with brain damage, physical and neurological problems, and very limited eyesight. As a result he was not able to return to his home and had been living in a care home. His wife also lived in the care home because of a terminal degenerative illness. The claimant did not have capacity to make decisions about his claim. A case manager was appointed. She assessed that the couple’s former home would never be suitable for them again, and that a different house should be purchased. The trust made an interim payment of £350,000 and a bungalow two miles from the care home was purchased. Thereafter planning permission was obtained to adapt it to suit their needs. However, the claimant’s wife’s deteriorating condition by then meant that she could not leave the care home, so the plan was for the claimant to move there without her, which he wished to do. He asked the trust for a further payment of £450,000 for the adaptations to the bungalow. It refused, and the claimant made the instant application.

The claimant argued that he had a real need for a capital payment, as although his experience in the care home had been positive, he wanted to resume a life in which he was free to do as he chose.

The defendant submitted that the application was premature, and that the claimant was better off at the care home with his wife.

‘The size of the interim payment relative to the likely damages would not fetter any future periodical payments…’

Causation Billett v Ministry of Defence [Lawtel 11/09/2014] From Issue 33 In the case of Billett v Ministry of Defence [Lawtel 11/09/2014] the court was required to determine damages after the defendant ministry admitted liability to pay 75% of the damages caused by a non-freezing cold injury to the claimant (age 29).

The defendant had employed the claimant as an acting lance corporal in the British army. He had suffered the injury in February 2009 when engaging in physical exercises in cold weather. He was medically downgraded and although he was later upgraded, he left the army in October 2011. He claimed that he had left partly because of his injury as he considered that his career prospects had been damaged and he was unhappy about the way he had been treated. He arranged new employment as an HGV driver at about the same time as he left the army. The claimant described his injury as a minor injury to his feet with less severe symptoms in his hands. His expert medical witness produced a report in March 2012 which, although it accepted that the claimant’s feet had been injured, only said that it was possible that he had sustained a hand injury. The issues were (i) whether

Allowing the application, the High Court judge held that there

the claimant had sustained any injury to his hands; (ii) whether

was a need for the capital sum at this point. The claimant had

he had left the army because of his injury or for other reasons;

been independent at the time of the negligently-conducted

(iii) the appropriate amount of general damages for pain, suffering

procedure. He had been at the care home for three years. It was

and loss of amenity, and for loss of congenial employment; (iv)

not clear how well he would manage in the community, but it

whether future loss of earning capacity should be valued by

was what he wanted. His wish was to eat when he wanted to,

reference to Ogden tables.

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The claimant submitted that the appropriate level of general

Ogden tables A and B with adjustments in light of the particular

damages for pain, suffering and loss of amenity was £17,500,

circumstances.

and that his future loss of earnings should be assessed in the sum of £427,151 on the basis that he would have stayed in the army and been promoted but for his injury. Alternatively, he argued that his future loss of earnings should be assessed on an Ogden tables A and B reduction factor basis, using the uninjured and injured multipliers, to reflect the impact of his disability on his earning capacity in the civilian labour market.

It was not appropriate to make a traditional lump sum award. Such awards were appropriate where there was great uncertainty about what the claimant would have done if uninjured. Since there was no doubt that the claimant would have left the army regardless of his injury, for as much of his future career as he could arrange, he would have been earning exactly the same as if he had been uninjured. The only difference was that if he had to

The deputy High Court judge held that the injury did not

change jobs, he would have had more difficulty finding alternative

extend to the claimant’s hands. The diagnosis of the injury to

work than he would otherwise have done. The claimant was

his feet was based on objective findings and medical records. In

“disabled” by reference to the Ogden test. Given that a lump

the absence of such evidence in respect of the hands, the

sum award was inappropriate, the Ogden tables A and B were

claimant’s expert was right to express his conclusions tentatively.

to be used to assess damages. However, given that there were

The claimant had not mentioned any problem with his hands at

few who could be classified as “disabled” and yet remain as fit

time of injury or years afterwards. Accordingly, the court could

and able as the claimant, it would have been wrong to apply the

not accept that he had sustained any injury to them.

reduction factors without deduction. Accordingly, the multiplier

When the claimant applied for early release from service, he had not mentioned his injury despite the fact that he could have done. It was accordingly hard to accept that his injury was a real motivating factor in causing him to leave the army. It was not true that, but for his injury, the claimant would have stayed in the army beyond October 2011. The real reasons for his leaving were his family commitments and plans for civilian life. He would have left the army when he had, even if he had not suffered his injury.

was substantially reduced for contingencies other than mortality to reflect the minor nature of the claimant’s disability. Considering also his likely retirement age, the court determined that he was entitled to £99,062 for future loss of earnings. He was also entitled to other identified future losses.

Comment The judge’s approach to the calculation of future loss of earnings was unusual. He found that the multiplicand for future loss of earnings was £21,442 but he declined to make a Smith v

Having considered authorities on much more serious cases of non-

Manchester award of three times that figure: £64,326. He found

freezing cold injury, the appropriate figure for general damages in

that the multiplier for loss of earnings was (24.29 x 0.92): 22.35.

this case was £12,500.

The adjustment factor from Table B was 0.54 but the judge took

The claimant’s claim for loss of congenial employment failed because of the finding that he had given up his career for reasons other than the injury. He was also entitled to damages in respect of other identified items of past loss, including additional heating costs and additional clothing.

Since the claimant would have left the army regardless of his injury, future loss of earnings could not be assessed on the basis that he would have stayed but for his injury. The court had three options for calculating future loss of earnings: (a) a traditional Smith v Manchester lump sum award; (b) an award based on Ogden tables A and B without adjustment; (c) an award using 117

the view that it reflected far too high a level of disability for this claimant. He therefore took a mid point between 0.92 and 0.54: 0.73 to produce a multiplier for residual earnings of 17.73.

Normally that multiplier would be applied to a claimant’s current, reduced net earnings. However, in this case the claimant was found to be earning to his full potential and was disadvantaged only in that he might find it harder to secure fresh employment if he became unemployed. The judge therefore made the following calculation: (22.35 – 17.73): 4.62 x £21,442 = £99,062. Is this not simply a higher than usual Smith award, produced by a different method?

It does not seem to be an application of the second part of the

condition. He was of the view that the dissociative seizures

Ogden methodology. It is, however, another example of a judge

were part of, and an extension of, the flashbacks and the PTSD

re-adjusting the multiplier derived by using Table B to reflect

and that the claimant had a pre-existing vulnerability to such

more accurately the claimant’s level of disability in the context of

episodes. The claimant’s evidence was that the seizures began

employability.

soon after the onset of her PTSD symptoms. During questioning, she had a dissociative seizure resulting in her collapsing in her seat. The issues were whether there was a causative link between

Causation

the admitted negligence and the PTSD and/or the dissociative

Leigh v London Ambulance Service 2014) EWHC 286 (QB)

seizures.

From issue 010

Finding in favour of the claimant, the High Court judge held

The case of Leigh v London Ambulance Service (2014) EWHC 286 (QB) looks at causation in a case where the usual ‘but for’ test could not be applied but where the defendant’s negligence was found to have made a ‘material contribution’ to the claimant’s condition.

that the evidence of the claimant’s medical expert was to be preferred. There was no injury that was caused on the bus, merely circumstances that arose which later led to the onset of PTSD. There were innumerable variables in the circumstances that might give rise to the development of PTSD and in the people who were likely to suffer it. It was impossible to predict

The claimant dislocated her right kneecap as she went to sit

on any scientific or mathematical basis the moment after which

down on a bus. She was trapped between the seats, was

someone would go on to suffer it. The instant case was a

unable to move and in severe pain. An ambulance was called

“cumulative cause” type case. The court was unable to find on

but it did not arrive until 50 minutes after the injury. During

the balance of probabilities that the claimant’s PTSD would have

that time, passengers held the claimant down to stop her moving

occurred in any event before the negligent delay. The instant

as instructed by the emergency operators. She felt trapped

case was one where medical science could not establish the

and helpless to end the pain. The defendant admitted that

probability that “but for” the negligent delay the PTSD would not

there was a negligent delay of 17 minutes in the attendance

have happened, but it had been established that the contribution

of the ambulance amounting to one third of the total period

of the negligent failure was more than negligible. It made a

between the dislocation and the arrival of the ambulance.

material contribution to the development of the claimant’s

It was accepted that the claimant suffered consequential

PTSD and therefore the claimant succeeded in establishing the

psychiatric and psychological damage, namely post-traumatic

necessary causative link.

stress disorder (PTSD). It was also accepted that from a date that was in issue, the claimant had suffered dissociative seizures.

The defendant’s medical expert was of the opinion that the PTSD

The claimant’s seizure during questioning was undoubtedly genuine and a product of the pressure of the experience.

was probably caused within about the first 15 minutes on the bus and therefore that the negligent delay had no part to play in its development. His evidence was that the claimant’s dissociative seizures occurred much later than the onset of PTSD, were unconnected with it and were consequent upon other life stressors. The claimant’s medical expert stated that the PTSD developed as a consequence of one indivisible event on the bus where the whole 50 minutes was relevant and that there was no scientific method of splitting up the time to reach a conclusion as to how long would be needed to induce a PTSD

Causation/pre-existing condition Reaney v University Hospital of North Staffordshire NHS Trust and another (2014) EWHC 3016 (QB) From Issue 34 The case of Reaney v University Hospital of North Staffordshire NHS Trust and another (2014) EWHC 3016 (QB) deals with what is effectively an ‘eggshell skull’ case, where an already vulnerable claimant’s condition was made much worse by the defendants’ negligence.

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In 2008, when she was 61, the claimant contracted transverse

evidence, the trusts’ negligence had made the claimant’s position

myelitis, a very rare inflammatory condition causing damage to the

materially and significantly worse than it would have been but for

spinal cord. The condition left her paralysed below the mid- thoracic

that negligence. She would not have required the significant care

level and with no control over her bladder or bowels. During her

package (and the accommodation consequent upon it) that she

hospitalisation, she developed a number of deep pressure sores

now required but for the negligence. Compensation should be

with consequent osteomyelitis (infection of the bone marrow),

assessed, hopefully by agreement, on that basis. The appropriate

flexion contractures (abnormal shortening of the muscle tissue)

award for pain, suffering and loss of amenity was £115,000.

of her legs and a hip dislocation. The combined effect of those disabilities was that her lower limbs adopted a “windswept” configuration, causing her to fall from an upright sitting position

Damages

to the left. She was currently only able to sit out in her wheelchair

Yapp v Foreign & Commonwealth Office (2014) EWCA Civ 1512

for four hours at the most; otherwise she remained in bed. The defendants had admitted negligence in respect of the pressure sores and their consequences.

Finding in favour of the claimant the High Court judge held that it was apparent that the pressure sores and their consequences

From issue 42 In Yapp v Foreign & Commonwealth Office (2014) EWCA Civ 1512 we have a rare example of a case looking at remoteness of damage in a personal injury claim.

had made a significant and material difference to the claimant’s

The claimant/respondent had been appointed to the post of High

physical well-being and her care needs. Without them, she would

Commissioner in Belize by the defendant/appellant. Ten months

have had a much better quality of life, spending her waking hours

after commencing his post, the defendant received allegations

out of bed in a standard wheelchair (with the ability to maintain a

in confidence that the claimant had (i) sexually harassed women

good spinal posture and balance) which she would have been able

at social events and had behaved in a manner likely to damage

to self-propel. She could have undertaken a few basic household

the reputation of the United Kingdom; (ii) bullied and harassed

tasks and would have been able to get out and about much

staff members. It withdrew the claimant from his role on the

more than was possible in her present condition. While she was

basis of the first allegation. That allegation was later found to

inevitably going to be doubly incontinent, her bowel management

be unsubstantiated. The claimant received a written warning

would have been better and she would not have required the

in respect of the second allegation. He became depressed and

urethral catheter which she used now. But for the development of

remained unable to work for several years until his retirement.

the pressure sores in hospital and their consequences, she would

The judge concluded that the decision to withdraw the claimant

have required no more than roughly seven hours of professional

amounted to a breach of contract and a breach of the defendant’s

care each week until the age of 70; she now required two carers

duty of care and that those breaches had caused the claimant’s

on a 24/7 basis, a requirement that would continue for the rest of

depressive illness.

her life. Further, she and her husband would need to move to a larger property to accommodate the carers. They would also need a larger vehicle. While the court accepted the general thrust of the trusts’ submission that in law a defendant could only be liable to compensate a claimant for the damage it had caused him or to which it had materially contributed, this case should be seen

The defendant appealed and submitted that (1) the judge had applied the wrong test to the question of whether the claimant’s withdrawal was fair; (2) even if his illness was caused by the breach of contract or breach of duty of care, it was too remote to attract damages.

as a reflection of the principle that a tortfeasor had to take

Allowing the appeal in part, the Court of Appeal held that the judge

his victim as he found him. And, if that involved making the

had recognised that the defendant enjoyed a broad discretion

victim’s current damaged condition worse, then the tortfeasor had

whether to withdraw a post-holder for operational reasons and

to make full compensation for that worsened condition. On the

that sometimes speed would be important and preclude an

119

effective investigation. That was not inconsistent with his finding

about the instant case that was sufficiently egregious to render

that the way that that discretion was exercised in the claimant’s

it foreseeable that the withdrawal of the claimant from his post

case was unfair. It had been unnecessary for the defendant to act

would cause him a psychiatric injury. It was not tantamount to

as precipitately as it did, without making any further inquiries and

dismissal, and he was told that if exonerated by the investigation,

without even putting the allegations to the claimant. The judge

the defendant woul try to find him another posting. The defendant

had also been entitled to find that if the defendant was going to

was attempting to follow due process, despite the unfairness

take such a drastic step, it should have found a way of dealing with

of what had occurred. The losses attributable to the claimant’s

the issue of confidentiality. It could have disclosed the content of

depression were not reasonably foreseeable and could not found

the allegations without revealing their source, or it could have

a claim for breach of the common law duty of care. They were also

sought consent to disclosure.

too remote to be recoverable in his claim for breach of contract,

With regard to the issues of foreseeability and remoteness, the

where the test of remoteness was more favourable to defendants.

following propositions were established from case law: in considering, in the context of the common law duty of care, whether it was reasonably foreseeable that an employer’s acts or omissions could cause psychiatric injury, such an injury would not usually be foreseeable unless there were indications of some problem or psychological vulnerability on the part of the employee that approach extended to cases where the employer had committed a one-off act of unfairness, such as the imposition of a disciplinary sanction. However, that was not an absolute rule and each case turned on its own facts in claims for breach of the common law duty of care it was immaterial that the duty arose in contract as well as tort: they should be treated as covered by tortious rules. In order to establish that the duty was broken it was necessary to establish that psychiatric injury was reasonably foreseeable; if it was, no issue as to remoteness could arise (d) in claims for breach of the implied duty of mutual trust and confidence, or of any express contractual term, the contractual test of remoteness would be applicable. ‘..it would be exceptional for an apparently robust employee, with no history of psychiatric ill health, to develop a depressive illness as a result of even a very serious setback at work’ In principle, an employer’s conduct might be so devastating that it was foreseeable that a person of ordinary robustness might develop a depressive illness as a result. However, it would be exceptional for an apparently robust employee, with no history of psychiatric ill health, to develop a depressive illness as a result of even a very serious setback at work. There was nothing 120

10. Miscellaneous

The claimant had been living and working in Germany for

Jurisdiction/Rome II

considerable length of time. She lived there with her husband

Winrow v Hemphill and another (2014) EWHC 3164 (QB) From Issue 36

eight-and-a-half years by the time of the accident. That was a 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

In Winrow v Hemphill and another (2014) EWHC 3164 (QB) the

had a house in England. Her family’s intention to return to the

claimant tried to argue that although her accident had happened

UK at the end of her husband’s posting did not affect her status

in Germany and involved another party then habitually resident

at the time of the accident. The claimant’s habitual residence at

in that country, she should nevertheless be able to bring her

the time of the accident was Germany. The law of tort indicated

claim in England and under English substantive and not merely

by Article 4(1) had not been displaced by Article 4(2).

procedural law.

To bring herself within Article 4(3) the claimant had to show

The claimant was an English national. She had moved to Germany

that the tort was “manifestly” more closely connected with a

with her husband after he was posted there by the British army.

country other than that indicated by Articles 4(1) and 4(2). The

They had lived in Germany with their children for over eight years

circumstances to be taken into account under Article 4(3) did not

but intended to return to the UK at the end of his posting. The

vary depending upon the issues to be determined or the stage

claimant had been a rear-seat passenger in a car driven by the first

reached in proceedings. One system of law governed the entire

defendant, an English national, when it was involved in a collision

tortious claim. The “centre of gravity” was the centre of gravity of

with a car driven by a German national. The first defendant was

the tort, not of the damage caused by the tort. However, there

also living in Germany because of her husband’s army posting.

was no temporal limitation on the factors taken into account

The claimant suffered a prolapsed disc. She suffered depression

and a court would assess the factors as they stood at the date

and continuing pain in her right leg. She and her family returned

of the decision. If a claimant and a defendant were habitually

to the UK 18 months after the accident and she issued the instant

resident in country A at the time of the accident but in country

proceedings. The second defendant, the first defendant’s insurer,

B at the time Article 4(3) was applied, both circumstances could

conceded liability. It was a company incorporated in England and

be taken into account. There was a difference of opinion as

Wales.

to whether the factors to be taken into account under Article

The claimant submitted that German law, applicable under

4(3) were limited to those connected with the tort and excluded

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

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

in the UK.

factors connecting the tort with German law included:

Refusing the application the High Court judge held that Article

The accident took place in Germany

4(2) was an exception to the general rule that the law of the

The claimant sustained injury in Germany

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

The claimant and first defendant were habitually resident in Germany at the time of the accident

claimed to be liable had to be habitually resident in England at

The claimant had remained in Germany for a further 18 months

the time; that was the driver and not the insurer. The habitual

after the accident

residence of the second defendant was therefore immaterial.

She received a significant amount of treatment for her injuries in Germany

121

The following factors indicated a connection of the tort with

Canada. The defendant applied successfully for that to be set

English law: the claimant and first defendant were both resident in

aside and for a declaration that the court had no jurisdiction

England at the date of the instant hearing; the claimant attended

to try the claim. The master decided that it was clear that the

a pain clinic and received treatment for depression in the UK;

defendant did not own or operate hotels and in particular

she was allegedly suffering loss of earnings in England; she had

did not own the hotel in Egypt, and that the claimant had

pursued proceedings in the UK, although that was not a strong

contracted with the hotel not the defendant for the tour.

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.

Allowing the claimant’s appeal, the High Court judge held that it was not appropriate for the court, on an application for permission to serve out of the jurisdiction or to set aside permission when given, to try the merits of the claim; yet the master had made findings of fact on issues that would have to be

Jurisdiction Brownlie v Four Seasons Holdings Inc (2014) EWHC 273 (QB) From issue 008 The case of Brownlie v Four Seasons Holdings Inc (2014) EWHC 273 (QB) is the latest in a series in which the courts have shown a readiness to seise jurisdiction for an English national.

determined at any trial. Moreover, his findings as to the ownership and/or management of the hotel and as to the party with whom the claimant contracted for the tour were based on defective witness statements and/or were unsupported by evidence.

There was no evidence that any company had been established in Egypt for the purpose of managing the hotel. Contrary to the master’s findings, the claimant had a strongly arguable case that the other party to the contract for the tour was most probably an

The claimant and her late husband, who were British and

entity with whom the proprietor of the land and buildings had

resident in the United Kingdom, had been staying in Egypt at

entered into agreements; agreements which were likely to have

a hotel which formed part of the hotel group carrying the

provided for a licence to use intellectual property including the

defendant’s name. During a sightseeing tour, the car in which

defendant’s logo and its name and for management and advisory

they were travelling crashed, injuring the claimant and killing her

services.

husband and his daughter. The claimant had booked the tour by telephoning the hotel’s concierge before they left the UK, having referred to a brochure she had picked up on a previous stay at the hotel. She claimed that the defendant was liable for her personal injuries and under the Fatal Accidents Act 1976; she also claimed under the Law Reform (Miscellaneous Provisions) Act 1934 as the executrix of her late husband’s estate. In a letter before action to the defendant she sought pre-action disclosure of documents relating to the tour booking. The defendant passed the request to the hotel in Egypt. Egyptian lawyers responded, asserting that the accident was caused by the car company and the driver only, and that the driver was never employed by the hotel, whose role had been merely to relay the claimant’s request for a tour to the car company. The claimant failed in her further attempts to obtain clarification from the defendant as to what corporate entity or entities were involved. She issued proceedings and obtained permission to serve the defendant in

As to whether a contract was made by the claimant with the defendant, the brochure was the most important evidence, because it alone purported to identify the concierge’s principal.

It would lead a reasonable person to understand, as the claimant did, that she was contracting with an international company known to trade under the defendant’s name and logo. No specific company fitting that description was or could have been known to the claimant at the time, because those responsible for the hotel chain chose not to tell their guests who or which company was responsible for the management of the hotels, including, in particular, the guests’ safety. However, the defendant fitted that description. The claimant had a strongly arguable case that the defendant was the other contracting party. No other company had been identified as a possible defendant. The defendant could have no complaint if the court did not take into account points it might make or evidence it might call at any trial, but which it chose not to mention at this stage.

123

Contrary to the master’s view, the most probable analysis of the evidence regarding the claimant’s conversation with the concierge was that, after some discussion about the details of the tour she wanted, she told him that she wished to make a

Jurisdiction Allen and others v Depuy International Ltd (2014) EWHC 753 (QB)

firm booking, which comprised her offer, he then accepted the

From issue 012

booking, and therefore the claimant heard that acceptance

When can someone who is not a resident in England & Wales

in England, so the contract was made in England. However, it was hard to say that either party had much the better of the argument.

Although in light of the preceding findings it was unnecessary to decide, given the finding that the claimant had a good arguable case that the defendant was the party to the contract, the applicable law pursuant to Article 4(1)(b) Regulation 593/2008 (Rome I) was not that of England.

The claimant had a good arguable case that her claims in tort disclosed a serious issue to be tried and on which she had a real prospect of success.

As the most likely live issue at any trial was the amount of special damages, and because people with knowledge of the claimant’s late husband’s professional practice and his health were likely to be in England, it was clearly the most appropriate jurisdiction.

bring a claim in the English & Welsh courts?

In Allen and others v Depuy International Ltd (2014) EWHC 753 (QB) the defendant manufactured prosthetic implants in England.

The claimants represented a few hundred overseas residents who had been implanted with the devices. The first to fourth claimants had their implants in New Zealand or Australia, and remaining claimants had theirs in South Africa. After experiencing problems with the implants from an adverse reaction to metal debris, the claimants issued proceedings in England, as the defendant’s country of domicile, alleging that the devices were defective.

It was common ground that, for the purposes of determining the applicable law under S11(2)(a) Private International Law (Miscellaneous Provisions) Act 1995, the claimants had sustained injury in the country in which they first suffered the alleged symptoms. It fell to be determined whether (i) the event giving rise to damage (EGRD), for the purposes of Article 31 Regulation

Two witness statements made by solicitors in support of the

864/2007, was prior to 11 January 2009, by which time all the

defendant’s application were plainly not compliant with PD 32.

prostheses had been manufactured, distributed and implanted, or

They failed to say either that they were speaking from their own

after that date; (ii) if the EGRD was before January 2009, which law

knowledge or what the source of their information or belief was;

was applicable to the claims; (iii) if English law applied to any

and the substance of one was drafted as a submission rather than

of the claims, whether the Consumer Protection Act 1987 applied.

a statement of fact. It was unacceptable that solicitors should breach the rules in that way. If their instructions did not enable them to make a compliant witness statement, then it was their duty to the court to ask for permission under paragraph 25.2 of the Practice Direction to file a defective witness statement, or not to file a statement at all. In the instant case, it might have been better if the court had simply refused to admit the statements pursuant to the underused power in paragraph 25.1.

The High Court judge held that where a manufacturer faced a claim for liability for a defective product, the place of the EGRD was that where the product in question was manufactured.

The EGRD should therefore be the date of the manufacture or distribution of the defective prostheses or, if that was incorrect, the date of implantation. There was no other intervening or proximate cause of the claimants’ injuries. Any date other than that of the manufacture/supply (or implantation) would present substantial practical problems. It was undesirable for the EGRD to depend upon an individual’s reaction to an implant: that would be contrary to the desirability of legal certainty contained in the recitals to the Regulation.

Under the 1995 Act, the general rule was that the applicable law was the law of the country where the individual was when he

124

sustained the injury. There was no reason to displace that rule

be displaced under S12, because it was substantially more

under S12 of the Act. English law was not, therefore, applicable.

appropriate for German law to determine the relevant issues:

The applicable law for the first to fourth claimants was that of New

among other things, Germany was the normal residence of it and

Zealand, and the remaining claimants that of South Africa.

of the claimant, and the loss and the damage would be suffered in

Even if English law had been applicable to the claims, the 1987 Act would not apply to them. The Act had no territorial effect beyond the United Kingdom, European Union or European Economic Area. Consumers who suffered damage outside the EEA and who had no connection with it, and defective products whose marketing and supply was outside the EEA, were not within the scope of the Act.

Germany. The judge found that English law was the appropriate law. The tort was strongly connected to England, having regard to the location of the accident and the fact that the defendant was a company registered in England. The factors identified by the third party did not make it substantially more appropriate for any of the issues to be determined by German law.

The national court before which a claim was brought had to recognise the claim of a responsible institution in another member

Donkers and another v Storm Aviation Ltd and others (2014) EWHC 241 (QB) In Donkers and another v Storm Aviation Ltd and others (2014) EWHC 241 (QB) the first claimant was a German national in the employ of the third party German airline who had travelled to Manchester airport for the purpose of carrying out a maintenance check on an aircraft operated by the third party.

The defendant, an English company, provided ground-handling

state but the extent of the claim and the assessment of damages remained to be determined by the law of the national court.

The determination of the claim that passed from the benefits recipient to the responsible institution had to be determined in accordance with the law of the substantive claim. The second claimant’s claim was subject to German law only to the extent that any issue arose as to whether there had been a subrogation or as to the extent of the subrogation. The third party could not rely on exclusions and limitations governing employer’s liability in

services for the third party at the airport. It supplied the claimant

German social accident insurance law.

with a nitrogen gas rig so that he could inflate one of the aircraft’s

The law applicable to the ground-handling agreement was

tyres. The rig was faulty; it caused the tyre to explode, and the claimant sustained serious injuries. The second claimant was the social-insurance carrier for the transport sector in Germany; it had made payments to the claimant under German social-security law arising from the accident. The defendant and third party had entered into a ground- handling agreement under which the third party agreed to indemnify the defendant against legal liability for claims; the agreement did not contain an express choice-of-law clause. The first claimant claimed damages against the defendant for personal injury arising out of the accident. The second claimed the benefits which it had already paid to the first claimant and an estimated sum for the future benefits that it would pay to him.

The High Court judge was required to determine the applicable law. He held that it was to be determined by the Private International Law (Miscellaneous Provisions) Act 1995. Under S11(1), the general rule was that the applicable law was the law of the country in which the events constituting the tort occurred. The third party had argued that the general rule should

governed by the Article 4 Rome Convention 1980. It provided that the contract would be governed by the law of the country with which it was most closely connected, while providing for an exception in the case of “a severable part of the contract which ha[d] a closer connection with another country”. The applicable law was English law: the defendant was registered in England and the contract was to be performed in England. The object of the indemnity provision was not independent of the other provisions of the ground- handling agreement. The agreement made provision for the arrangements between the parties, and the agreement as to risk was an integral part of the agreement. If an indemnity clause was to be regarded as a simple independent obligation, severance would have to be granted in many situations and it would become the norm rather than the exception. In any event, the indemnity provision had a closer connection with England: the defendant was registered in England; further, the contract was governed by English law and was to be performed in England.

125

Medical panels for whiplash claims From issue 003 It appears that the government is pressing on with its proposal to establish panels to provide medical evidence in whiplash claims with a value of up to £5,000. The success of this reform must lie in ensuring that the accredited examiners are drawn from practitioners who are truly objective. The form of report is likely to

As with CIDA, the Bill provides for a variety of remedies depending on whether or not a ‘qualifying breach’ was deliberate or reckless. There are other provisions relating to fraudulent claims and the late payment of sums due in respect of claims.

The consultation is expressly limited to determining whether the current wording meets the policy objectives as set out in two earlier consultation papers.

be standardised but steps must be taken to ensure that this does not encourage a tick-box approach which allows for abuse.

It may be wishful thinking but the suggestion is that the new panels will be up and running by the new year.

The Discount Rate From issue 009 In response to a question put to the government in the House of Lords the following statement was made: “The discount rate is

Draft Insurance Contracts Bill From issue 005 Following the introduction (eventually) of the Consumer Insurance (Disclosure) Act 2012 (CIDA) the Draft Insurance Contracts Bill has

currently under review, and no decision has yet been taken on what the rate should be or how it should be set. This is a very complex issue, and the review is being taken forward on as timely a basis as possible.”

now been published for limited further consultation.

At the heart of the draft legislation, which relates to nonconsumer contracts, is a ‘duty of fair presentation’ when making a proposal for insurance. A fair presentation is defined as one:

Article 75 status Pinn and others v Guo and others – Swansea County Court In this case Plexus Law was instructed to act for the fourth

(a) which d iscloses every material circumstance which the

defendant, the insurers of the third defendant. The primary

proposer knows or ought to know, or (taking the information

issue was whether our client had Road Traffic Act (RTA) status

provided by the proposer in the round) gives the insurer sufficient

and would be required to deal with all of the claims arising out of

information, in relation to those material circumstances, to put a

the accident or Article 75 status, in which case it would share the

prudent insurer on notice that it needs to make further inquiries

claims with another Article 75 ‘insurer’.

as to circumstances which may prove material,

The claimants’ claims were for personal injuries and other losses

(b) which makes that disclosure in a manner which would be

arising out of an accident which occurred on 9 January 2011.

reasonably clear and accessible to a prudent insurer, and

The claimants attended an illegal car cruise/ car circus which

(c) in which every material representation as to something the proposer knows or ought to know is substantially correct; or, if as to something else (such as a matter of expectation or belief), is made in good faith.

A circumstance is material if it would influence the judgement of a prudent insurer. Examples are provided of ‘things which may be material’ and a material representation is substantially correct if a prudent insurer would not consider the difference between what is represented and what is actually correct to be material.

126

took place at Baglan Energy Park. They were injured when the first defendant and third defendant took part in a race during the event. The first defendant lost control of his vehicle and collided with the claimants. There was no contact between the first and third defendants’ vehicles or between the third defendant and the claimants.

The second defendant provided a policy of motor insurance for the first defendant and had already obtained a declaration from the court (in separate proceedings) dated 30 July 2012 that its policy was void from inception. It therefore held Article 75 status.

Following the second defendant’s declaration proceedings, the

Taylor Review of Costs in Scotland – The Scottish Government

second defendant tried to argue that the fourth defendant

Responds

should deal with the claimant’s claims in full as they were the insurance company with the greater level of interest (to a meaningful degree) and the second defendant had managed to reduce their status prior to this claim being issued.

Our client refused indemnity to the third defendant on the basis that the vehicle was being used for racing which was outside the scope of use of the vehicle as defined in the policy.

The hearing on the 11 April 2014 was to determine, as a preliminary issue, whether our insurer client was liable under the policy to indemnify the third defendant in respect of any liability he may have to the claimants. The second defendant challenged our client’s case on the basis that the reference to “racing” within the exclusion clause of our client’s policy, as a matter of construction, did not extend to the circumstances of the accident.

The District Judge found in our client’s favour, confirming that they had Article 75 status. He held that the use of the fourth defendant’s vehicle fell outside the scope of the policy and therefore that: i. Our client was not liable under the policy to indemnify the third defendant in respect of any liability which he may have to the claimants or either of them ii. Our client was not liable under S151 Road Traffic Act 1988 and iii. Our client was not liable to the third defendant, and therefore to the claimants or either of them under the European Communities (Rights Against Insurers) Regulations 2002.

It had already been agreed but the court also formally recorded: 1. The place where the accident happened was a road or other

From Issue 21 On Monday the Scottish Government responded to the report presented in September 2013 by Sheriff Principal Taylor. The intention is to implement the recommendations incrementally, with varying degrees of further consultation as required. At the centre of the process is a vision that: The Scottish justice system will be fair and accessible, cost-effective and efficient, and make proportionate use of resources.

Disputes and prosecutions will be resolved quickly and secure just outcomes.

Damages-Based Agreements/QOCS Under the banner of access to justice, damages-based agreements (DBAs) will be introduced and it will be interesting to see if they are any more popular in Scotland than in England and Wales. Speculative fee agreements (‘no win/no fee’) have been allowed for many years, but added protection will be offered to those taking up either of these agreements through qualified one-way costs shifting (QOCS).

Legal aid remains available for injury cases in Scotland.

There will be exceptions to QOCS where the pursuer is found to have acted unreasonably (‘unreasonably’ has not yet been defined). DBAs will be subject to regulation to provide protection for the public and there will also be a cap on the level of success fees under both DBAs and speculative fee agreements but with the solicitors entitled to retain judicial expenses (costs recovered) in addition to the success fee. It is not, however, proposed that members of the public should receive independent advice on such agreements.

Tenders (the equivalent of Part 36 offers in England & Wales) will still be effective with QOCS but it is proposed that the defender’s recoverable post-tender judicial expenses should be capped at

public place within the meaning of the Road Traffic Act 1988

75% of the damages recovered.

2. Appropriate notice has been given in accordance with clauses

Referral Fees

9 and 10 of the Uninsured Drivers Agreement 1999 and that

The government agrees with Taylor that referral fees should be

the claimants have otherwise complied in all respects with the provisions of that agreement The second defendant was ordered to pay our client’s costs.

permitted, subject to appropriate safeguards. Pending a review of whether claims management companies should be regulated, only solicitors will be able to pay referral fees. The government

Permission to appeal was refused.

127

proposes to consult with the Scottish Law Society over the

The recommendations aimed at ensuring the distinction between

changes that will be needed.

‘fact, not fault finding’ FAIs and criminal cases are felt to be matters

Counsel There will be controls over the levels of fees payable to counsel and also when counsel may be instructed. This is particularly relevant given the anticipated transfer of most personal injury cases to the sheriff court, where counsel are not mandatory. This is aimed at achieving ‘equality of arms’ between claimants and insurers.

Implementation It is recognised that the implementation of these proposals will require behavioural changes amongst the parties with the need to encourage good claims to be progressed quickly and for frivolous

for the Lord President (Scotland’s senior judge) and the Scottish Court Service (SCS) to take forward. These include FAIs being held without wigs, gowns and hostile questioning and not in criminal court rooms. It is noted to be current practice for a sheriff with appropriate skills to be assigned to a complex FAI. The Government proposes that all deaths resulting from an accident while working continue to be the subject of a mandatory FAI. They doubt the benefit of widening this to include deaths arising from industrial diseases and historic exposure and invite comment on whether this current category is sufficient. The proposed expanded list of circumstances in which an FAI will be mandatory includes where the deceased was arrested or detained

cases to be discouraged. Compulsory pre-action protocols, to

by police, or a child in ‘secure care’ of a public authority.

regulate pre-action behaviour are regarded as being an important

Unlike in England and Wales, there is currently no requirement for

part of the new landscape.

With increasing regulation of solicitors the government is taking the opportunity to review the extent to which claims

an FAI to be held where a person domiciled in Scotland dies abroad but the body is repatriated. The consultation invites comment on whether there are circumstances in which such a hearing should

management companies should also be regulated. This is seen as

be held and if so what parameters should be set.

a way of levelling the playing field between the two providers of

Unsurprisingly, given the publicity criticising delays in FAIs being

services and improving the protection of vulnerable clients from unacceptable practices.

Much of this will require primary legislation for which no timetable has been given, although the indications are that the necessary legislation will be taken forward as quickly as possible. We may see earlier developments where issues can be dealt with by the Scottish Civil Justice Council under secondary legislation.

heard, a focus of the proposals is speeding up the process.

Steps already taken in this regard include the Lord Advocate’s instruction that the request for an FAI be made within two months of the Procurator Fiscal receiving instructions to hold it. Further proposals include submission of written statements, pre-hearing expert meetings and that Edinburgh and Glasgow’s practice of holding preliminary hearings become standard. The consultation suggests that it is not practical to set a minimum timescale after the death within which the FAI should be opened

Proposals to reform fatal accident inquiries in Scotland From Issue 27 A Scottish Government consultation on proposals to reform and modernise the law on fatal accident inquiries (FAIs) has opened.

The proposals largely follow the recommendations in Lord Cullen’s 2009 report.

Many of Cullen’s recommendations have of course already been implemented by the Crown Office Procurator Fiscal Service (COPFS) such as the establishment of a central FAI team (SFIU).

128

because of the varying time that investigations take and invites comment on that.

There is considerable discussion about how FAIs should be accommodated to avoid delays due to the lack of availability of a court room and ensure the least connection with criminal proceedings. The options are to hold the hearings in an unlimited number of ‘ad hoc’ premises; or alternatively to establish three dedicated, regional centres.

It is proposed that a standard form of determination should be used by Sheriffs. Subject to redaction, these would all be

published on the SCS website. In relation to ensuring compliance,

The claimant had sustained serious injuries in a car accident caused

the Government agrees the Sheriff’s determinations should not

by the negligence of the driver. The claimant and defendant were

be legally binding. They propose a duty be placed on Sheriffs to

found to be in possession of a commercial quantity of cannabis

ensure recommendations are sent to any relevant body concerned

with intent to supply. The claimant commenced proceedings

with safety in the industry as well as the parties. The consultation

against the driver and the driver’s insurers who had avoided the

proposes that parties should be under a duty to respond to the

policy for misrepresentation and non-disclosure and therefore

recommendations, but doubts Government resources exist to

had Article 75 status. It accepted its liability to meet the claim

monitor compliance. This would bring the Scotland into line with

against the driver under the 1999 Agreement, but successfully

what happens after coroners’ inquests.

argued that liability was excluded under clause 6(1)(e)(iii) on the

Responses to the proposals are invited by Tuesday 9 September. If you would like any advice on a response please contact:

basis that the claimant had known that the vehicle was being used in the course or furtherance of a crime. The claimant’s appeal on that issue was dismissed. In the instant proceedings, the

Laurie Traynor

claimant argued that Article 1.4 of Directive 84/5, which set out the obligations of an insurer of last resort to pay compensation to third party victims, only permitted specified limited exceptions

Major reforms of the courts’ system in Scotland

to the payment of that compensation and clause 6(1)(e)(iii) was not one of those permitted exceptions.

From Issue 35 Courts

Finding in favour of the claimant, the High Court judge held

Reform (Scotland) Bill which will implement many of the

that Article 1.4 of the Second Directive, either read in isolation or

recommendations made by Lord Gill in his review of the civil

in conjunction with Article 2.1, the First Directive and the Third

courts.

Directive, imposed obligations on member states in respect of

The

Scottish

Parliament

yesterday

passed

the

The reforms are to improve the structure and operation of the courts with an emphasis on making them more accessible and justice more affordable.

damage caused by vehicles in relation to which a valid policy of insurance was taken out, but where that policy was subsequently avoided by the insurer. A raft of EU decisions made it quite clear that a situation could not arise where the insurer’s avoidance of

The most significant change is an increase in the exclusive

liability left a victim without a remedy. The principle obligation to

jurisdiction of the Sheriff Court from £5,000 to £100,000.

compensate lay with the insurer under Article 2.1 of the Second

The reforms also include establishment of a national specialist

Directive, but if that was not satisfied then the national insurer of

personal injury court, a Sheriff Appeal Court and the introduction

last resort, which in the UK was the MIB, must step in under

of summary sheriffs to deal with some types of criminal and civil

Article 1.4. Thus the MIB must pay compensation in circumstances

cases.

where the insurer, for whatever reason, including the avoiding of an insurance policy for misrepresentation or non-disclosure by

RTA/MIB Uninsured Drivers’ Agreement Delaney v Secretary of State for Transport (2014) EWHC 1785 (QB) From Issue 22

the insured, owed no liability in respect of the victim’s claim.

That general rule was subject only to a number of very limited exceptions involving the victim’s own blameworthy conduct and the case law made it clear that those exceptions were limited to those expressly stipulated in Article 1.4 and Article

The case of Delaney v Secretary of State for Transport (2014) EWHC

2.1. It was a basic principle of community law that derogations

1785 (QB) potentially sees the demise of yet another ‘defence’

and exclusions were to be construed restrictively. There was no

available to the MIB (and Article 75 insurers) under the Uninsured

ability for a member state to create specific exceptions that were

Drivers’ Agreement 1999.

not mentioned in Article 1.4 or were not otherwise justifiable on public policy grounds according to established principles of domestic law.

129

The jurisprudence therefore made it quite clear that Article 1.4

their practices. This shortcoming in the evidence is fundamental’.

and Article 2.1 of the Second Directive required member states

He also expressed concern that the impact of the Jackson

to ensure that compensation was paid in all circumstances save

reforms could not yet adequately be taken into account.

those expressly set out as exclusions within the text of those provisions.

The MR did agree with some of the committee’s recommendations.

There will be no change to the current banding of fee earners

The exclusion of liability under clause 6(1)(e)(iii) was inconsistent

from A to D by the addition of A* and E. Nor should there be

with, and undermined, the specific exceptions permitted by

separate GHR bands specific to specialist fields of civil litigation.

Article 1.4 and Article 2.1. The UK was therefore in plain breach

The old arguments will therefore roll on as to what are the

of its community law obligations. The breach was a serious one

appropriate hourly rates to be charged by claimant personal injury

and arose in circumstances where the UK’s room for manoeuvre

practitioners. He also accepted the recommendations to amend

under the directives was closely circumscribed; it did not have

the criterion for Grade A fee earners to includes Fellows of CILEX

a wide discretion. Its obligations under the directives, and their

with 8 years’ post-qualification experience; and that costs lawyers

relevant confines, were quite clear and, in the absence of knowing

who are suitably qualified and subject to regulation be eligible for

the actual reason for the policy decision, the best that might be

payment at GHR Grades C or B, depending on the complexity of

said was that the Secretary of State decided to run the risk,

the work. These changes will take effect from 1 October.

which was significant, knowing of its existence. The breach was so serious, that compensation must be paid to the claimant under the Francovich principle.

Comment Press reports of this case suggest that the defendant is considering an appeal. However, if the decision stands we may

What of the immediate future? There will be no change at present to the 2010 rates and consideration will be given ‘to see what steps can be taken to obtain evidence on which GHRs can reasonably and safely be based’. In the absence of a full and therefore expensive survey of the true cost of running legal practices, it is difficult to see how the current impasse can be broken.

anticipate some form of amendment to the 1999 Agreement (or a new Agreement) to bring the terms in line with the EU Directives. In the meantime, however, clause 6(1) (e)(iii) stands and Article 75 insurers are entitled to rely on its provisions.

ASHE update From issue 42 On 19 November the ONS issued the latest set of ASHE data.

6115 2013

The outcome of the long awaited review of the guideline hourly rates (GHRs) for solicitors’ costs From issue 029 After several false dawns the Master of the Rolls (MR) has finally

2014

First release

60 8.50

70 9.21

75 9.73

80 10.29

90 12.02

Final release

8.50

9.22

9.73

10.29

12.02

First release

8.55

9.23

9.72

10.21

11.94

Comment

made a decision following the review of GHRs, which have not

Not for the first time we see a reduction in the hourly rates on

been adjusted since 2010. The outcome is probably not one that

which claimants’ periodical payments will be calculated: this time

was predicted by anyone: he has rejected the proposals made. The

in the commonly used 75th and 80th percentiles, as well as the 90th.

principal reason for this is the inadequacy of the survey on which the reviewing committee had based its recommendations. As the MR put it: ‘A relatively small non-randomised survey cannot be a secure basis for determining what it costs solicitors to run 130

This is particularly surprising given the news from the National Joint Council on 14 November 2014 that the Spinal Point 8 rate on which gratuitous care claims are normally calculated will increase from £13,321 to £13,871, with effect from 1 January 2015. This

represents an increase from £6.92 per hour to £7.21, producing a

instructing the expert, and, if there is continued non-compliance,

net hourly rate of £5.41.

debar a party from relying on the report. Experts should copy their answers to those instructing them.

Guidance for the instruction of experts in civil claims From issue 42 With effect from 1 December, the “Protocol for the Instruction of Experts to Give Evidence in Civil Claims” is replaced by new guidelines which are available at http://www.judiciary.gov.uk. The 2014 guidelines emphasise the importance of pre-action protocols and they continue to draw a distinction between advisory experts

There are provisions governing the preparation of joint statements.

Agendas are not mandatory but the guidelines anticipate their use in multi-track cases.

These guidelines do not differ significantly from the earlier protocol but they do offer an opportunity to re-instil best practice both in relation to the instruction of experts and how the experts carry out their instructions.

and Part 35 experts.

There are lengthy sections re-emphasising the duties of the

Jackson/Mitchell/Denton

expert, as well as the need for the instructing party to ensure

Hockley v North Lincolnshire & Goole NHS Trust [Lawtel

that the expert can fulfil all aspects of his instructions, within the

6/10/2014]

required timescales and ascertain the cost of doing so.

The guidelines cover the instruction of single joint experts and how single joint experts should conduct themselves.

From section 47 the guidelines deal with the form and content of experts’ reports. There is not a great deal that is new here but it is worth noting that it remains mandatory for an expert to state whether or not his views fall within a range of opinion. In the past this requirement has been more honoured in the breach, with few experts addressing a range of opinion. Section 63 of the guidelines is worth reproducing, as there has been recent publicity about the number of experts who have been ‘persuaded’ to change their views as the result of pressure from those instructing them.

From issue 35 The case of Hockley v North Lincolnshire & Goole NHS Trust [Lawtel 6/10/2014] looks at the relevance of Denton to an application to set aside a default judgment.

In May 2011, the claimant/appellant had sent a letter of complaint to the defendant/respondent. Her medical records were disclosed in October 2011. In March 2013, to preserve the limitation position, she commenced proceedings. However, as investigations were not complete, neither a letter of claim nor the particulars of claim were served. In July 2013, a consent order between the parties provided for the time for service of the particulars of claim to be extended to 17 January 2014. They

Experts should not be asked to amend, expand or alter any

were served on 15 January. In accordance with CPR 10.3(1),

parts of reports in a manner which distorts their true opinion,

the defendant had to file the acknowledgement of service

but may be invited to do so to ensure accuracy, clarity, internal

within 14 days. However, it was filed on 13 February. Meanwhile,

consistency, completeness and relevance to the issues. Although

the claimant applied for default judgment which was granted

experts should generally follow the recommendations of solicitors

on 14 February. In a telephone hearing granting the defendant’s

with regard to the form of reports, they should form their own

application to set aside the default judgment, the judge found

independent views on the opinions and contents of their reports

that there was a good reason for so doing, under CPR 13.3(1)

and not include any suggestions that do not accord with their

(b), namely “fairness and justice”. He decided that the pre-action

views.

protocol for the resolution of clinical disputes had not been

Section 65 is also of interest in that it confirms that (e)xperts have a duty to provide answers to questions properly put. Where they fail to do so, the court may impose sanctions against the party

followed and that it was a major fault of the claimant. He also considered CPR 3.9 and Mitchell, and found that the breach of the acknowledgment of service deadline was not trivial, and that the reason given, namely oversight, was not good enough.

131

The claimant appealed and submitted that the judge placed the

The claimant was entitled to invoke the default judgment

failure to comply with the protocol on a level above all other

procedure and take advantage of it by saving money in not having

matters which he then failed properly to consider.

to prove her case.

Allowing the claimant’s appeal the deputy High Court judge

Had the judge calibrated the factors correctly, the weight of

held that whilst the instant case concerned an application to set aside a default judgment rather than relief from sanctions,

the case would have come down heavily in the claimant’s favour. The failure to do nothing more than acknowledge

and although CPR 13.3(1) and CPR 3.9 were couched in

the particulars of claim was a serious default. That it was a first

different language, the relevant considerations in respect of

default had little relevance as it was likely to be so at that early

either application were similar. Consequently, Mitchell and

stage. The advantage to the claimant and loss to the defendant

Denton, although covering relief from sanctions, had profound

was equally profound. The defendant was the author of its own

importance in applications to set aside default judgments, and

downfall and the claimant was not at fault in complying with the

the three-stage approach set out in Denton had considerable

agreement to the letter.

relevance when considering an application under the “good reason ground” in CPR 13.3(1)(b). Where a defaulter sought to set aside a regular and entirely reasonable judgment based on noncompliance with a rule, the court had to consider it by reference to an assessment of how serious the default was and why it occurred. It was abundantly clear that, in the instant case, the judge based much of his judgment on the failure by the claimant, as he saw it, to comply with the protocol. However, he did not analyse the consequences surrounding the consent order and failure to engage the protocol. Whilst compliance with the protocol was a key part of the litigation process and any failure to comply with it had to be properly analysed and weighed

There was no doubt that an application demanding the exercise of judgment in a difficult factual matrix, where the consequences were likely to be very significant, should not have been dealt with by way of telephone hearing. Telephone hearings were amenable to short decision-making cases and truly procedural matters rather than cases requiring a fully reasoned exercise of judgment. Whilst parties were entitled to telephone hearings of applications of under an hour, allowance had to be made for a judgment to be delivered and for time for reflection.

[And under this heading see also the case of Long below under ‘Costs’].

in the context of the case, such a failure did not necessarily lead to a default judgment in the same way that a failure to file an acknowledgement of service could. The judge erred when he

Jackson/Mitchell

analysed the situation as he did. He was perfectly entitled to

Associated Electrical Industries Limited v Alstom (UK) (2014)

place importance on the failure to comply with the protocol but

EWHC 430 (Comm)

he elevated the consequence of that to a level it did not deserve.

The raw features of the case were that: Whilst there was no doubt that the claimant ignored the protocol, the defendant did not demand compliance

From issue 009 In Associated Electrical Industries Limited v Alstom (UK) (2014) EWHC 430 (Comm) the claimant had claimed an indemnity or a contribution from the defendant in respect of a claim brought

There was plainly an agreement to allow the claimant a period of

against the claimant and the defendant for damages following a

time to file and serve the particulars of claim, and the particulars

former worker’s death from mesothelioma. The claimant served

were filed and served within that timeframe

its claim form in September 2013. The defendant filed an

In light of the agreement, the defendant did not demand that the claimant engage the protocol; as a result of incompetence, the acknowledgement of service was not filed within the deadline provided by the rules 132

acknowledgement of service on 1 October stating its intention to defend the claim, giving the claimant until 29 October t o serve the particulars of claim. On 29 October, the claimant requested an extension of time from the defendant. The defendant refused

and made its application on 13 November. The claimant served

prospect of unprofitable hearings, but Mitchell did not decide

the particulars on 18 November and applied for a retrospective

that that had always to be entirely disregarded.

extension of time in January 2014. The court considered (i) the relevance of the timing of the claimant’s extension application; (ii) whether its non-compliance was trivial; (iii) whether there was a good reason for non-compliance; (iv) whether the possibility of the claimant issuing fresh proceedings was relevant; (v) the balance of justice, having regard to the requirements of the CPR.

If the decision depended only on what would be just and fair between the parties, the court would not strike out the claim and would extend time, given that the non- compliance had been remedied after 20 days and had not disadvantaged the defendant. However, the court had to strike a balance between the interests of the parties and the interests of others who

The High Court judge held that the timing of the extension

might be affected. Nothing in Mitchell suggested that the court

of time application was inconsequential so far as it concerned

should disregard justice between the parties altogether. Where

criticism of its delay after the issue of the defendant’s strike-out

relief from sanctions was sought, CPR 3.9 required the court to

application. Cross-applications for extensions of time had little

consider all the circumstances; Mitchell said that considerations

practical purpose: the court had to hear two applications which

other than those specifically mentioned in CPR 3.9 were to

were two sides of the same coin. However, that did not answer

be given less weight. That did not mean that, when exercising

the criticism that the claimant had not applied for an extension

all powers under the CPR, the court had to give more weight

before the 29 October deadline or retrospectively between 29

to those specific considerations than to other aspects of the

October and 13 November. The failure to apply for an extension

overriding objective and other relevant circumstances. Mitchell’s

before 13 November did not give the CPR’s time limits the respect

guidance was directed to applications under CPR 3.9. However,

that was demanded.

that did not help the claimant. The court still had to give effect to

The claimant could have asked the defendant for an extension long enough before the deadline to enable it to apply to court if necessary; by the time it had asked, any application would have to be made retrospectively. That displayed indifference to compliance with the CPR. The period of non-compliance, 20 days, was not trivial.

Investigation of the claim had not been straightforward. However, the claimant appeared to have carried out investigations before

the overriding objective. The point at issue was the importance of enforcing the requirements of the CPR. It was considered that once the culture of a firm line on enforcement was accepted, there would be fewer applications under CPR 3.9. Although, as between the parties, it was disproportionate to strike out the claim, the emphasis given to enforcement of the CPR to encourage procedural discipline led to the conclusion that the claim should be struck out and the extension of time refused.

issuing proceedings, and the particulars did not reflect much by way of further investigations into the key issue. There had been sufficient time to draft the pleading after the claimant learned that the claim was disputed. It had not shown good reason for

Jackson/Mitchell – Expert Witnesses Clarke v Barclays Bank Plc (2014) EWHC 505 (Ch).

not serving the pleading by 29 October. Further, if difficulties

From issue 010

in investigating the claim had justified the particulars being late,

The courts’ powers to control witness evidence in the post-

the claimant should have made a timely request for an extension.

It was not for the instant court to determine whether a

Mitchell era and to take into account the impact of case management decisions on parties in other cases is illustrated in

second action should be struck out as an abuse. However,

Clarke v Barclays Bank Plc (2014) EWHC 505 (Ch).

if the defendant’s application were granted, there was the

The defendant was the claimant’s mortgagee and the claimant

real prospect that it would result in further litigation and the substantive dispute being determined after more cost delay.

Courts were discouraged from giving too much weight to the

had brought the claim because he alleged that the defendant had sold the mortgaged property at a gross undervalue. A third party had been joined because the defendant claimed to have relied 133

upon its advice. In accordance with the court’s directions, both

to apply the important guidance given in Mitchell. The court had

parties had served expert evidence. However, on 3 May 2013,

to strive to be a tough but wise, not an officious or pointlessly

the claimant’s original expert informed the claimant that he was

strict, disciplinarian.

withdrawing from the case because he had retired. The claimant did not share that information with the other parties and allowed a trial window to be fixed. Over the coming months, mediation was arranged, but there were delays and it never took place.

The claimant did not disclose the expert’s retirement until 27 November, by which time he had already instructed another expert. He served the new expert’s report on 20 December and was granted permission to rely upon it in February 2014.

It had been the claimant’s clear duty, under CPR PD 23A - 2.7 to apply for further directions very soon after 3 May 2013. If he had done so, the court would have managed the time within which he had to identify and instruct a new expert. As it was, however, if the new expert’s report was admitted, the trial would have to be vacated to the detriment of other court users. It was an important factor that the court should enforce procedural discipline in order to raise standards of time-keeping

Allowing appeals by the defendant and the third party, the deputy

in the courts. Although the expert evidence was critical to the

High Court judge held that the court’s directions envisaged a

claimant and he would be seriously prejudiced if he was denied

sequential exchange of expert evidence, with the defendant

permission to rely on the new report, the balance of justice as

and third party’s experts responding to the claimant’s expert

between the parties came down firmly in favour of refusing that

evidence and the experts meeting and seeking to narrow the

permission. Although it might be little comfort to the claimant,

issues. In those circumstances, it had been wholly improper for

the court would be prepared to give directions that the original

the claimant to withhold the information about the first expert’s

expert’s report was in evidence at trial even though he might not

withdrawal beyond a reasonable period. Once the claimant had

attend or otherwise engage in the directions for the experts to

decided that he had to find a new expert to replace the first expert,

co- operate in narrowing the issues.

he should have disclosed the problem to the court and the other side. The expert’s withdrawal was outside the claimant’s control and there was little doubt that the court would have been

Post Jackson/Mitchell Cases Disclosure

sympathetic to him if he had applied promptly for directions.

Sainsbury’s Supermarkets Ltd v Mastercard Inc and others

The inference was irresistible that the claimant withheld the information in order to see if he could settle the case in a proposed mediation on favourable terms before he disclosed his

[Lawtel 18 March 2014] From issue 011

difficulty and thereby undermined his negotiating position. That

Although the case of Sainsbury’s Supermarkets Ltd v Mastercard

strategy failed when the mediation was delayed. It was also clear

Inc and others [Lawtel 18 March 2014] is a commercial case

that the other parties would suffer serious prejudice as a result

and one decided on its facts, it does illustrate a trend in courts

of the delay in the disclosure of his information if the claimant

applying the CPR less vigorously when dealing with disclosure,

could rely on the new expert’s report. As directed, they had

rather than other forms of evidence.

responded to the first expert’s report and the claimant had seen their experts’ positions and had the advantage of preparing his new expert’s reports in the light of it. If the new report was admitted, the defendant and third party would have to respond to that and the trial would have to be adjourned. Taking all those factors together, the claimant’s conduct amounted to a serious abuse of the process of the court. The deputy master who granted the claimant permission to rely upon the new expert’s report had failed to appreciate that. He had also failed 134

As a result of an agreement between the parties, in December 2013 the court had ordered the defendant/ applicant to provide standard disclosure by 11 April 2014. In January 2014, the defendant wrote to the claimant to say that solicitors representing them in parallel Commercial Court proceedings had agreed with the claimants in those proceedings to an extension of time until 15 August 2014 for the giving of disclosure. In the instant a pplication, the defendant sought an extension of time until 29 August 2014 on the basis that the disclosure process

so far had taken longer than expected and that when they had agreed to the original disclosure timetable they had not appreciated the full scope of the documentation that would

Jackson/Mitchell Rattan v UBS AG London Branch (2014) EWHC 665 (Comm)

need to be disclosed. The claimant argued that the extension

From issue 012

sought by the defendant was too long and the need for an

The commercial case of Rattan v UBS AG London Branch (2014)

extension had been caused, at least in part, by the defendant’s own delay. On that basis, it contended that any extension should be much shorter than that requested, or that there should be some form of staggered disclosure.

Allowing the application in part, the High Court judge held that there was force in the suggestion that the timetable reflected in the defendant’s application was in part the result of what had been agreed in the Commercial Court litigation.

An obvious temptation for the defendant was to align the proceedings so that the same disclosure timetable applied in both. However, the two sets of proceedings seemed to be following a different path; for example, there was less urgency with regard to disclosure in the Commercial Court proceedings because a preliminary issue had to be decided before disclosure could proceed. Given that courts should act proportionately when making case management orders, and in light of the

EWHC 665 (Comm) sends out a very clear message that while strict compliance with rules and orders is required, parties to litigation should not try to take unreasonable advantage of minor errors by an opponent.

The claimant and defendant were parties to an action in the Commercial Court. The claimant wrote to the defendant asking for confirmation that it would file its costs budgets “on” 28 February 2014. The defendant replied, indicating its agreement that they should be filed “by” 28 February. The claimant filed its costs budget on 27 February. The defendant filed its budget on 28 February. The claimant sought to make a distinction between filing “by” and filing “on” the agreed date. His case was that as 28 February was only six clear days before the case management conference, not seven clear days as required by CPR 3.13, the defendant was to be treated as having filed a budget limited to the applicable court fees and that it needed to apply for relief from sanctions if it

parallel proceedings in the Commercial Court, it was not

wished to rely on the budget as filed.

appropriate to grant an extension of time in the terms sought by

Rejecting the application, the High Court judge held that the

the defendant. An extension from 11 April until 29 August was extremely hard to justify and would have meant that matters that might otherwise have been capable of being properly resolved before the summer vacation would not be dealt with until after it. The ECJ’s judgment in a relevant matter was due to be delivered before the vacation, and in those circumstances it was appropriate that disclosure should reach finality before the vacation. Although it was possible that the defendant might be able to disclose some documents earlier than others, the best solution was to deal with an overall extension for disclosure rather than to adopt a staggered approach. In the circumstances, a proportionate extension was one of just over two-and-a-half months until 29 June 2014.

claimant’s contention was manifest nonsense and completely without merit. There had clearly been an agreement that 28 February was an acceptable day to file the costs budgets. If relief from sanctions had been necessary, which it was not, the case for such relief would have been overwhelming. It was clear from previous authority that the Commercial Court would firmly discourage the taking of futile and time-wasting procedural points. In order to reinforce that message, the claimant was to pay the costs of the instant hearing on an indemnity basis within 14 days. The costs were summarily assessed at £4,500.

The claimant’s argument had not only increased the expense of the case management conference, but had probably damaged the relationship of co-operation and trust which ought to exist between the parties’ legal representatives and which was necessary for the efficient conduct of litigation.

135

Comment One of the unfortunate consequences of Jackson/Mitchell is that practitioners have been left with an appalling dilemma: do they waive minor/trivial breaches by an opponent on the basis that such latitude works both ways; or do they owe their clients a professional duty to exploit these situations?

Fortunately it appears that common sense may prevail with the announcement that the current rules are to be further amended to allow parties to agree time extensions of up to 28 days for serving certain documents, without needing to make an application to the court. This so called ‘buffer’ provision is not a reflection of concern for the parties or for justice but to relieve the pressure on the courts which are currently deluged with applications for extensions of time.

for the service of their witness statements by one hour or relief from sanction under CPR 3.9 and an order extending the time for service by them of further disclosure by list, including information provided by their accountant, or relief from sanction related thereto. They also applied for permission to re-amend their amended defence. The claimants sought an order striking out the amended defence pursuant to CPR 3.4(2)(c) for noncompliance with the master’s orders and for seeking to adduce expert evidence without the leave of the court pursuant to CPR 35.4(1).

The deputy High Court judge held that if non-compliance with an order was trivial, the court would usually grant a prompt application for relief from a sanction; otherwise the applicant would need a good reason for the non-compliance. However, even where non-compliance, taken by itself, might be characterised as trivial, for instance where the party had narrowly missed the

McTear and another v Englehard and others (2014) EWHC 722 (Ch) McTear and another v Englehard and others (2014) EWHC 722 (Ch) is another example of the court applying CPR robustly.

deadline imposed by the order, it might become more significant when seen against the background of other matters. In the instant case, if all that had happened was that the defendant had been 50 minutes late in serving witness statements to which no other objection could be taken, the failure to serve them on time was

The applicants, the defendants to a claim brought by the

trivial. However, that was not all that had happened and the court

claimant/respondents, sought extensions of time to serve witness

was not constrained to considering the period of delay alone and

statements and disclose documents or, if those extensions were

nothing else when deciding whether to grant permission pursuant

refused, relief from sanctions. They also sought permission to

to CPR 32.10. Nor was the subject matter of the defendant’s

re-amend their amended defence. The claimant applied for the

application for an extension of time for service of further

amended defence to be struck out.

disclosure trivial and no good reason had been made out for

The claimants were the former joint administrators of a company and the former supervisors of a company voluntary arrangement into which the company had entered. They brought proceedings claiming that payments totalling £412,739 which the company had made, before it went into administration, to the seventh applicant, the holding company of the group containing the company, were loans which the holding company had now to repay. A master gave permission to the defendants to amend their defence and imposed deadlines for standard disclosure by list and the serving of witness statements. The defendants did not comply with the ordered time limits, missing the first deadline by 50 minutes.

They sought an order pursuant to CPR 3.1(2)(a) extending time 136

their default in providing disclosure and as to why an extension of time should be granted. Moreover the defendant should not be permitted to adduce their accountant’s witness statement as it contained expert evidence for which no permission had been sought. The application to re-amend their amended defence would also have to be refused because the proposed pleas would involve consideration and resolution of matters of law that were not entirely straightforward and of matters of fact that did not arise on the amended defence; and at the very least justice required that the claimants should be afforded an opportunity to investigate and give consideration to those matters, which they would not have if the proposed new pleas were to be allowed in at the present late stage and after the trial had begun and they were not granted an adjournment to deal with them.

Although the defendants were in breach of the master’s orders

as a chartered surveyor, but had fallen sick shortly after his wife

and had also sought to adduce expert evidence without the leave

had died. His particulars of claim had stated that had his wife

of the court, it would be a disproportionate response to all their

been alive, she would have become more actively involved in

defaults to strike out a pleaded case that had been placed on

publishing in order to supplement his loss of income following

the record before any of the recent failures to comply with court

that illness. The supplementary witness statement that the

orders and the CPR occurred.

claimant had made claimed that his wife had been involved in the running of his company.

Post Jackson/Mitchell cases Chartwell Estate Agents Ltd v Fergies Properties SA From issue 014 The one substantive case to be reported this week brings both hope and confusion to beleaguered litigators. In Legal Watch: Personal Injury 008 we featured the first instance decision in Chartwell Estate Agents Ltd v Fergies Properties SA and another.

Bucking the trend, relief was granted from the sanction in CPR 32.10 arising from failing to serve witness statements within the time specified. The judge had held that the application for relief was not made promptly and the default was not trivial, those being the key requirements stipulated in Mitchell. The reasoning for allowing the application was that both parties had been in default, the trial date could be maintained and a refusal of relief would effectively end the substantive claim.

The case has been to the Court of Appeal and having regard to the proximity of the trial a judgment has been handed down with the reasons to follow. The appellate court has upheld the earlier decision.

The defendant argued that following Mitchell, the present application should be treated as an application for relief from sanctions and dismissed, having been made five months too late; further, that it changed the basis of the case and the way it was pleaded. The claimant submitted that it was not an application for relief from sanctions because under CPR 32.5(3) he was permitted to amplify his witness statement and give evidence regarding new matters.

Refusing the application, the deputy High Court judge held that the matter had to be treated as an application for relief from sanctions under CPR 3.9. It was not a trivial breach and the application was extremely late. Unless and until relief from sanctions was obtained, the defendant could not be expected to prepare to deal with the evidence of witnesses whose statements had been served out of time. The case advanced by the claimant’s supplementary witness statement was very different from his original one. The claim had originally focused on the extra publishing work that the claimant’s wife could have undertaken following his illness. It was difficult to see how she could have done that if she was working on company affairs. The two positions were inconsistent. If the court was to accede to the application, the claim would have to be amended.

Even prior to Mitchell it might not have been appropriate to

Post Jackson/Mitchell Cases

grant the application. Now the conclusion could be reached more directly: the new rules were brought in to ensure that litigation

Canning v Network Rail Infrastructure Ltd [Lawtel 14/04/2014]

was practised expeditiously. To allow the claimant to rely on the

From Issue 015

statement would mean that the court would have to use valuable

The case of Canning v Network Rail Infrastructure Ltd [Lawtel 14/04/2014] sees a court looking both at strict compliance with CPR and the impact that granting relief from sanctions would have

time determining which of the two assertions was valid.

That was disproportionate. It would lengthen the proceedings unnecessarily and increase costs.

on court resources.

The claimant’s wife had been killed by a train on a level crossing

Kershaw V Roberts and others (2014) EWHC 1037 (Ch)

operated by the defendant. Prior to her death, she had been an

In Kershaw V Roberts and others (2014) EWHC 1037 (Ch) the

editor of cookery books. The claimant earned a significant amount

appellant/claimant appealed against a judge’s decision that 137

a directions hearing in the Part 8 claim which he had issued

to the rules, the issue that had arisen would soon be of historical

against the respondent/defendants was not a case management

interest only as the requirement for costs budgeting is to be

conference (CMC), so that they were not required to serve a costs

excluded from Part 8 proceedings unless specifically ordered.

budget seven days in advance of it.

Shortly after the claimant had issued his claim in the Taunton County Court, that court sent to all parties a “Notice of Directions”, stating that a directions hearing would take place on 21 November 2013. On 14 November 14, the claimant served a costs budget by fax. The defendants served their own costs budget by post on 19 November, but their letter was not received before the hearing. The hearing on 21 November took place by telephone. The claimant’s counsel argued that the hearing was a

Comment Although this case draws a distinction between claims commenced under Part 8 and those under Part 7 (the majority of personal injury claims), the judge did make it clear that if an allocation hearing is ordered under Part 7 that will not be a CMC. However, it remains the case that most hearings ordered after the filing of directions questionnaires will be CMCs and on the multi-track a costs budget will be required.

CMC, that the defendants had failed to serve their costs budget in time and that their costs budget should therefore be restricted to court fees only. The district judge allocated the claim to the multi-track and transferred it to the Rhyl County Court. At a “costs case management hearing” in that court, the judge ruled that the earlier directions hearing in Taunton was not a CMC, with the result that no obligation to file a costs budget had then arisen. The claimant appealed against that decision.

Dismissing the appeal, the High Court judge held that as a matter of construction, the rules were clear in providing that, unless and until a Part 8 claim was allocated to the multi-track by the court, the CMC provisions of the CPR 29 would not apply. CMCs were a creature of CPR 29, and the express power to fix such a hearing was triggered by the allocation of a claim to the multi-track by the court. It was that actual allocation which triggered the various procedural obligations attached to a

The Matter of Guidezone Ltd v Prakash and others (2014) EWHC 1165 (Ch) The decision in The Matter of Guidezone Ltd v Prakash and others (2014) EWHC 1165 (Ch) is not surprising but it is nevertheless comforting. This case is also an example of how a party may be tempted to use Jackson/Mitchell to gain a tactical advantage that would not otherwise be available.

The applicant/defendants had been ordered to serve their defences by 14 February 2014. Citing the commitments of counsel, on 29 January and again on 5 February their solicitors asked the claimant’s solicitors for an extension of time. The claimant’s solicitors did not reply until 10 February; they stated that the claimant would not agree to an extension. The instant application was issued on 11 February.

CMC. The claimant’s claim was not allocated to the multi-track

The claimant opposed the application arguing, among other

until the district judge specifically allocated it at the telephone

things, that the principles in Mitchell, advocating a “new more

hearing. Consequently, that hearing itself was not and could not

robust approach” to compliance with court orders, applied to the

have been, a CMC. The district judge was fully entitled to hold

claimant’s application and that it should be refused.

a directions hearing before he gave directions. He was fully entitled, at that hearing, to allocate the claim to the multi-track, transfer the claim to Rhyl and give whatever directions he could at that stage. He was fully entitled, then, to direct that there should be a CMC in the allocated claim, to include a costs management hearing. Not only was he entitled to make those orders but most judges would have made them.

The judge went on to say that because of imminent amendments 138

Allowing the application, the High Court judge held that the Mitchell guidelines did not apply directly to “in-time” applications for an extension such as the one issued by the defendants. The earlier case of Robert v Momentum Services Ltd (2003) remained good law and was authority for the proposition that an in-time application should not be treated as if it were an application for relief from sanctions; rather, it should be judged against the overriding objective. In applying the overriding objective, the

court should now have regard to the fact that it had been reformulated to add explicit reference to “enforcing compliance with rules, practice directions and orders”. However, unlike in the case of relief from sanctions, that consideration was not to be

Post Jackson/Mitchell Cases Chartwell Estate Agents Ltd v Fergies Properties SA and another (2014) EWCA Civ 506

given paramount status. To apply the Mitchell guidelines to an in-

From Issue 016

time application would in effect erode the distinction between an

The full judgment of the Court of Appeal has now been handed

ordinary order directing a timetable and an unless order. It would run the risk that ordinary orders setting out timetables would become “trip wires”, which was not the intention of the Jackson reforms. As to the practicalities, it was not difficult to see that if the Mitchell guidelines applied to in-time applications, there would be a risk in every case that a request for an extension, however unobjectionable in itself, might be declined by the other party in the hope of persuading the court to refuse an extension and thereby gain a significant advantage.

The consistent message from recent authorities was that a party who needed more time for a procedural step should not just ignore the problem but ask the other side for consent and, if consent was not forthcoming, make an in- time application for an extension. Conversely, the other side should respond positively and in a spirit of co-operation to reasonable requests for consent rather than “cry foul” and seek to take opportunistic advantage of the other party’s difficulties. Had the defendants’ request been acceded to, it would not have cost either side anything and would have had no practical impact on the orderly progression of the proceedings. The decision to contest the application had led to an expensive and time-consuming hearing.

It was appropriate to grant the extension of time sought. Among other things, the penalty of losing the ability to defend the claim would be wholly disproportionate. The order in question set out a timetable but did not specify any sanction for failing to comply with it. Moreover, granting an extension would have no adverse consequences of any substance on the claimant, other court users or the timetable for the hearing of the preliminary issues.

down in Chartwell Estate Agents Ltd v Fergies Properties SA and another (2014) EWCA Civ 506. The judge at first instance had granted the claimant relief from sanctions for failing to serve witness statements within the specified time. Both parties had been in default and refusal of relief would have had the disproportionately severe consequence of effectively ending the claim.

In the proceedings, the claimant had sought disclosure of certain documents from the defendant without which it claimed to be unable to complete witness statements. The defendant refused disclosure. Exchange of witness statements did not take place by the time specified by the court. The defendant stated that it had not finalised its statements because of the claimant’s stated position. Several weeks after the ordered exchange date, the claimant applied for permission, as required by CPR 32.10, to serve the statements out of time. The judge, applying the recently revised CPR 3.9, granted both sides relief from sanctions and an extension of time to exchange.

Refusing the defendant’s appeal, the Court of Appeal held that CPR 32.10 provided that where a witness statement was not served on time, the witness could not be called to give oral evidence unless the court gave permission. Since the rules had determined the applicable sanction, there could be no argument that the sanction was unjust or disproportionate. The question was therefore whether the sanction should be disapplied in the particular case. For that purpose, the phrase “unless the court gives permission” in 32.10 could not be applied in a free-standing way. The court had to have regard to other relevant rules such as CPR 3.1, 3.8 and 3.9. The White Book suggested that CPR 3.9 did not apply in the instant situation because, before trial, the CPR 32.10 sanction had not had effect within the meaning of CPR 3.8. However, a broader reading was required. Otherwise, applications to extend time for service of a statement made before trial could stand on a significantly different footing from applications made at trial when the witness was actually to be 139

called. The sanction provided for in CPR 32.10 had effect once the

witness evidence it would not matter if it likewise could not do

time limit for serving the statement expired.

so. That would be an unattractive result. The judge had been

The judge had been entitled to decide the matter as he had. He

entitled to attach importance to that factor.

had been justified in finding that the claimant’s non- compliance

The revised CPR 3.9 appeared unfortunately, but hopefully

was not trivial and that no good reason had been advanced to

temporarily, to have promoted satellite litigation. However, one

explain non-compliance. The parties’ correspondence showed a

sure way to avoid that was for parties to comply precisely with

lack of understanding of the requirements of the revised rules.

rules and orders and, where that was not possible, to seek from

Their approach had been tantamount to setting their own

court extensions of time and relief from sanction at the earliest

timetable. Further, the claimant could have lodged witness

moment. The Court of Appeal’s reluctance to interfere with case

statements by the specified date, even if needing to supplement

management decisions applied not only to decisions where relief

them later in the light of subsequent disclosure. The default

from sanction had been refused, but also to robust and fair

could not be entirely regarded as justifiable because of the

decisions where relief had been granted.

defendant having been party to it. The judge had been required by CPR 3.9 to consider all the circumstances of the case, including that the trial date would not be lost and no significant extra cost

Jackson/Mitchell Cases

would be occasioned if relief were granted. He had also been

Hallam Estates Ltd and another v Baker (2014) EWCA Civ 661

entitled to attribute importance to the fact that refusal of relief effectively meant the end of the action, since the burden of proof

From Issue 019

was on the claimant and it would have no evidence. Arguably,

The case of Hallam Estates Ltd and another v Baker (2014) EWCA

that was simply a consequence of the sanction under CPR 32.10.

Civ 661 has already attracted widespread publicity and a good

However, 32.10 did not provide that failure to serve a witness

deal of comment. It confirms:

statement resulted in striking out. It would be unreal to disregard such a de facto consequence of termination. That could not, however, necessarily be a determinative factor in the claimant’s

a) That parties may agree sensible extensions of time before a time limit has expired:

favour, because of the requirements in Mitchell: circumstances

b) That the courts will approve such extensions provided that the

other than those in CPR 3.9(a) and (b) were ordinarily to be given

conduct of the litigation would not be disputed and in particular

less weight than those matters. The White Book suggested that

any threat posed to an existing court date;

where a witness statement was served late it would be unjust to

c) That in these circumstances contested applications, which

exclude the evidence from trial save in very rare circumstances, but that stated the position too broadly. The revised CPR 3.9 and Mitchell required an altogether more rigorous approach. The judge had not decided to grant the claimant relief solely because of a disproportionately severe consequence. He had concluded that it would be too severe a consequence when set against all the background history and other matters. That had entitled him to depart from the expectation which otherwise would have arisen. Mitchell had not said that the factors specified in CPR 3.9 would always prevail over any other circumstances.

A further factor was the defendant’s default. It had also needed relief to rely on its witnesses, but had not applied for relief, no doubt having calculated that if the claimant could not rely on 140

take up court resources and incur unnecessary costs should be avoided.

The appellants/claimants had brought defamation proceedings against the defendant/respondent, which were dismissed. They were ordered to pay her costs. The defendant served her bill of costs eight months late. Six days before the claimants were required to serve their points of dispute, they asked the defendant for a 21-day extension of time. She did not agree to it and on the day the claimants should have served their points of dispute they applied for an extension of time; their application was issued by the court the next day. The costs judge dealt with the matter ex parte and granted the extension. The defendant unsuccessfully

applied for that order to be set aside and the claimants served

to set aside, for which he gave sensible reasons, was also a proper

their points of dispute within the extended time for doing so.

exercise of his case management powers. Accordingly the judge

The defendant appealed against the costs judge’s refusal to set

had erred in reversing that decision.

aside his order granting the extension. The judge, allowing the

When the claimants asked the defendant to agree an extension

defendant’s appeal, found that the claimants’ application for an

of time, they had given sensible reasons for the request and the

extension of time was issued out of time and therefore they were

defendant should have agreed. Given her own delays, she could

seeking relief from sanctions which the costs judge should not

hardly complain about that modest extension. CPR 3.8 would

have granted as rules should be complied with. He set aside the

be amended imminently. Once it was, parties would be able to

costs judge’s order and therefore held that the points of dispute

agree a time extension of up to 28 days without reference to

were not points of dispute at all and the defendant was entitled to

the court, provided that it did not put at risk any hearing date.

a default costs certificate under CPR 47.9(4).

Under CPR 1.3 parties had a duty to help the court in furthering

The claimants appealed and argued that the judge was wrong to characterise their application for an extension of time as an application for relief from sanctions and that the costs judge’s decisions allowing the extension and refusing to set aside that order, were case management decisions with which the judge was not entitled to interfere.

Allowing the appeal, the Court of Appeal (including Jackson LJ) held that the claimants’ application for an extension was made before the expiry of the time allowed for filing the points of dispute. Given CPR 23.5, the fact that the court staff did not date stamp the application until the following day was immaterial. An application for an extension of the time to take any particular step in litigation was not an application for relief from sanctions, provided that the applicant filed his application notice before expiry of the permitted time period. That was the case even if the court dealt with the application after the expiry of the relevant period. That remained the case following the recent civil justice reforms. It followed that the costs judge was dealing with a straightforward application to extend time under CPR 3.1(2)(A) and the principles concerning relief from sanctions in Mitchell did not apply. It was incumbent on the costs judge to deal with the application in accordance with the recently amended overriding objective, which he had. The claimants had made a reasonable application for an extension of time, which did not imperil any future hearing dates or otherwise disrupt the proceedings. The costs judge’s decision to grant an extension was a proper exercise of his case management discretion. The defendant’s application to set aside was based upon the misapprehension that the costs judge

the overriding objective, which included allotting an appropriate share of the court’s resources to an individual case. Therefore legal representatives were not in breach of any duty to their client when they agreed to a reasonable extension of time which neither imperilled future hearing dates nor otherwise disrupted the conduct of the litigation. On the contrary, by avoiding the need for a contested application they were furthering the overriding objective and also saving costs. Similarly, the courts should not refuse and CPR 1.1(2)(f) did not require them to refuse to grant reasonable extensions of time in such circumstances.

(Obiter) The issue of whether the judge had erred in directing that a default costs certificate be issued did not arise. Nevertheless, the court addressed it. The defendants’ points of dispute would have become out of time once the judge reversed the costs judge’s decision. As a result the sanction in CPR 47.9(3) would have come into operation. The effect of which was that the paying party could not be heard further in the detailed assessment proceedings unless the court gave permission. That was the only sanction under the rules. CPR 47.9(5) prevented the issue of a default costs certificate after the paying party had served its points of dispute.

That rule applied whether they were served before or after expiry of the permitted time for service. It therefore followed that if the receiving party wished to obtain a default costs certificate, he had to file his request after expiry of the time permitted for serving the points of dispute and before the points of dispute were actually served. That did not happen in the instant case and the judge did not have the power to direct that a default costs certificate be issued.

had granted relief from sanction. His rejection of her application 141

Comment

Jackson/Mitchell

While on the face of it this is a sensible decision, it still leaves

Monde Petroleum SA v Westernzagros Ltd [Lawtel 22/05/2014]

practitioners with a dilemma in certain situations. One party is in a position to comply with a court direction; the other is not.

The first party considers that the second has no justification for requiring more time. The time limit is imminent. The second party

From Issue 019 In the light of previous decisions, the ruling in Monde Petroleum SA v Westernzagros Ltd [Lawtel 22/05/2014] may be viewed as

requests an extension of time. What should the first party do?

surprising.

If it refuses the extension the first party must make an application

The claimant/applicant had served its claim form in accordance

for more time before the deadline expires. If it fails to do so it will be obliged to apply for relief from sanctions and applying Mitchell may fail, providing the first party with a potentially massive tactical advantage. If the application is made in time, the court will consider it in the light of the overriding objective. If the extension is granted, the first party may find itself criticised for opposing it and suffer a penalty in costs.

Introduction into CPR of the ‘buffer provision’

with the Commercial Court procedure, but had included in the response pack form N1C(CC), which warned that judgment in default might be granted if no acknowledgement of service was provided in response to the claim form, rather than form N1D. It filed a witness statement three months after the directed date, so that it could not rely on it without the court’s permission.

The claimant had decided that it would not be proper to incur the costs of putting that large volume of evidence in, which was possibly duplicative or might not have been on point, where there

With effect from 5 June 2014 the Civil Procedure Rules are to

was a remaining overlap between the court proceedings and

be amended to allow parties some respite from the impact of the

ongoing arbitration proceedings. The statement largely provided

decision in Mitchell.

clarification in respect of previous evidence. The court proceedings

CPR 3.8 will now read (emphasis added): (3) Where a rule, practice direction or court order – (a) requires a party to do something within a specified time, and (b) specifies the consequence of failure to comply, the time for doing the act in question may not be extended by agreement between the parties except as provided in paragraph (4)

were stayed, with the exception of discrete issues as to allegedly defective service of the claim form, which were to be heard at the instant hearing. The defendant/respondent instead sought to make detailed representations on the proper construction of the jurisdiction clause, inviting a ruling on whether the claimant had a good arguable case on some of its claims, without having indicated those submissions in its skeleton argument.

The issues were whether (i) the breach was trivial as the evidence in the witness statement was of no real significance and the

(4) In the circumstances referred to in paragraph (3) and unless the

defendant had accepted that it would make no material

court orders otherwise, the time for doing the act in question may

difference, or alternatively that there had been a good reason

be extended by prior written agreement of the parties for up to

for the breach; (ii) it would be unfair for the court to rule on the

a maximum of 28 days, provided always that any such extension

construction of the jurisdiction clause when the claimant had

does not put at risk any hearing date.

prepared for the hearing on the basis of short, technical points as to service of the claim form; (iii) CPR 7.8 required the correct form to be provided in the response pack to effect good service of the claim form.

Allowing the application, the High Court judge held that the fact that the evidence was not of great significance did not mean that the breach was trivial. The statement had been served over three

142

months late. The rules and time limits were there for a reason.

The breach was not trivial. However it had not been caused by oversight or mistake and was instead due to the claimant’s deliberate decision. To some extent that position was borne out

Jackson/Mitchell Holloway and others v Transform Medical Group (CS) Ltd and others (2014) EWHC 1641 (QB)

by subsequent events as the arbitration had proceeded and the

From Issue 21

court proceedings had been stayed pending publication of the

The case of Holloway and others v Transform Medical Group (CS)

arbitral award. The claimant had not needed to provide the full witness statement which, had it been done on time, would have incurred considerable costs. The statement was for the purpose of clarification and the court would have wanted to see it. The claimant had shown a good reason for the court to grant an extension of time to serve the statement and that it was just and appropriate to grant relief from sanctions.

The instant hearing had been intended to be limited to technical points regarding service. It would be inappropriate to consider substantial arguments as to jurisdiction which required knowledge of the relevant background facts. A skeleton argument should clearly alert the reader to an intention to pursue points. The authorities that the defendant had sought to rely on had not been referenced or explained in the skeleton as they should have been.

The claimant would have been caught unaware and prejudiced; it was unfair to require it to meet those arguments at short notice. It would also be inappropriate to hear those arguments where there was a substantial overlap with the issues that the arbitral tribunal had already considered.

CPR 7.8 did not specify which form needed serving. The claimant had served the appropriate form and there was nothing to indicate that form N1D had to be served. In the absence of a court order, service of a different form would not invalidate service of the claim form.

The case of Groarke v Fontaine (2014) EWHC 1676 (QB) has also received publicity. Eady J overturned a district judge’s earlier decision and allowed the defendant to amend his defence at the start of the trial. The basis for this decision was that justice and fairness required it and there was no prejudice to the claimant, waste of court resources or inconvenience to other court users.

Ltd and others (2014) EWHC 1641 (QB) looks at the status of a cut-off date in group litigation and the impact of Mitchell on an application to join claimants late.

Over 1,000 women had brought claims for loss and damage arising out of the use of allegedly defective implants, manufactured by a French company (PIP), in breast augmentation surgery. The defendants, the owners of private clinics in which the surgery was carried out, resisted the claims. In April 2012, an order was made that no claim could be added to the group register without the permission of the court after 4pm on 8 April 8 2013. The applicant/ claimants’ solicitors made the instant applications 10 months after that cut-off date. It was the defendants’ case that the applications, properly analysed, were applications for relief from sanctions under CPR 3.9.

The claimants argued that they were never part of the group litigation order and so they had not disobeyed any order of the court; therefore CPR 3.9 did not apply.

Rejecting the applications, the High Court judge held that the purpose of a cut-off date was to secure the good management of the claims subject to the group litigation order. It was difficult to characterise as something other than a sanction, the consequences that those who had not joined the group could not do so without the permission of the court. Relief was available in the form of permission. Were a cut-off date not a sanction, it would be difficult to see what purpose it served in the management of group litigation. CPR 3.9 therefore applied. The claimants’ solicitors had failed to have the claims joined to the register before the cutoff date; failed to make an application for an extension before the cut-off date; and having taken the decision to make the application, failed to do so until 10 months had elapsed. Those failures were serious and sustained. There was no good reason for any of them and nothing was done to meet the deadline. All that was the responsibility of the solicitors. Whether considered under CPR 3.9 or under CPR 1.2, as framed in CPR 1.1(2), (the overriding 143

objective) the applications were hopeless. To grant them would

Dismissing the application, the Deputy High Court Judge held

be to undermine the discipline of the litigation. The cut-off date

that it was clear from the claimant’s solicitor’s statement that he

would be rendered meaningless. Such prejudice as there might be

regarded the indications given by the court office as somehow

proved to be to the claimants would be laid at the solicitors’ door.

justifying or excusing his behaviour. He was well aware of the

Even before the changes in the CPR and the shift of approach

terms of the unless order. It was not acceptable for him to seek

from Mitchell onwards, the conclusion would have been exactly

to rely on what he may have been told by members of staff

the same.

in the court office when it came to compliance with a judicial order made in proceedings. He had made a conscious decision

Jackson/Mitchell Decadent Vapours Ltd v Bevan and another [Lawtel 10/06/2014) From Issue 22 While we await the outcome of the first batch of appeals from Jackson/Mitchell decisions, the courts continue to adopt a robust attitude to default. In the commercial case of Decadent Vapours Ltd v Bevanand another [Lawtel10/06/2014) the claimant had issued proceedings seeking an interim injunction against the defendants. Directions were made requiring the claimant to pay the hearing fee in October 2013. It did not pay the fee and the defendants did not file a defence. There were also issues between the parties as to whether full disclosure had taken place. On 12 December 2013 the court ordered that unless the claimant filed a pre-trial checklist and paid the hearing fee by 16.00 on 19 December, the claim would be struck out.

The claimant filed the pre-trial checklist on 18 December. The claimant’s solicitor called the court office and was told that it

not to take steps which would have ensured that the order was complied with in time, and he took the risk of putting the cheque in the post six days before the Christmas period. The provisions of CPR 3.7 dealing with the payment of fees were also relevant considerations in assessing whether the claimant’s failure was trivial. The failure to comply was not trivial.

A defence had not been filed, but the proceedings, which had been started with an application for an interim injunction, had brought forward the factual defences. There might have been issues of law which had not been precisely articulated by 7 January, but that could have been dealt with by way of skeleton arguments. There might also have been some outstanding disclosure, but it was not clear whether that was bound to have led to a vacation of the trial. There was at least a chance that, even though the parties had agreed to vacate, the judge might not have acceded to vacate the trial. Accordingly, there was an effect on court users.

For all of those reasons the court was not persuaded to grant relief from sanctions.

would be acceptable if a cheque was sent prior to 19 December,

Comment

even if it did not arrive by that date. The solicitor dictated the

This case serves to illustrate the importance of often small

appropriate letter, but did not check that it had been sent. The parties then agreed fresh directions ahead of a pre-trial review on 7 January 2014, including a vacation of the trial date. The claimant’s solicitor discovered at the pre- trial review that the court had not received the cheque. The claim was struck out. The fee was paid on 9 January 2014.

The claimant applied for relief from sanctions and submitted that the failure to comply with the order was trivial and the court should take into account the defendants’ failure to comply with court orders. It also argued that the failure to comply had little or no effect on other court users as the trial would not have gone ahead in any event.

144

details, such as ensuring that court fees are paid. Faced with a sanction if there is default practitioners must ensure that every ‘t’ is crossed an every ‘i’ dotted as any error or omission can prove fatal to the case.

Jackson/Mitchell Lovell Partnership and another v Merton Priory Homes (2014)

proportionate amount after making a modest reduction to reflect those costs that were unnecessarily incurred by the defendant.

EWHC 1800 (TCC)

Comment

From Issue 23

Those handling cases in the pre-litigation stage should be aware

There are five cases that broadly sit under this heading this week.

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).

A declaration had been made in favour of the claimant on the interpretation of the clause in issue. In light of that previous judgment, the defendant accepted that it should pay the

of the requirements of the relevant pre-action protocol. If there is no specific pre-action protocol the Practice Direction – Preaction 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.

Warners Retail Ltd v National Westminster Bank Plc and another [Lawtel 13/06/2014]

claimants’ reasonable costs of the proceedings. The costs claimed

As the case of Warners Retail Ltd v National Westminster Bank Plc

were £55,000. The defendant submitted that the costs claimed by

and another [Lawtel 13/06/2014] shows, the courts continue to

the claimants and the costs it had incurred had been increased by

adopt a robust approach to compliance with CPR, even where an

the claimants’ conduct, particularly in failing to comply with the

application is not one for relief from sanctions.

pre-action protocol.

The claimant alleged that the defendants had missold to it

It was the defendant’s case that the claimants should recover only

interest rate swaps, and in particular that they had given negligent

two-thirds of their costs.

advice in breach of their duties of care. The trial was due to begin

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

about three weeks after the hearing of this application and it was common ground that, if the claimant was granted permission to adduce the expert evidence, the trial would have to be adjourned.

sufficiently clearly. Although the claimants’ argument became

The defendants contended that it would be contrary to principle

more nuanced in the course of oral argument, the thrust of it was

to allow the claimants to adduce the expert evidence because it

largely unchanged. However, their delay in bringing the claim had

had not pursued its case diligently. They relied on the principles

unreasonably increased the costs to both sides. The claimants

expounded in Mitchell to urge the court to exercise its discretion

had known their position at the end of 2010 but had not issued

against granting permission. The claimant argued that there would

proceedings until March 2014. That had resulted in the respective

be an inequality of arms if permission was not granted because

solicitors having to review a large amount of correspondence

it needed the expert evidence to establish the defendants’

when preparing for the instant hearing. Further, the claimants had

alleged breaches of duty and the existence of a body of expertise

refused to give an undertaking to meet any costs order made in

on interest rate swaps. It further argued that its application was

favour of the defendant. That issue had been live for only a month

not covered by the Mitchell principles because it was not seeking

and had therefore not added greatly to the costs. The claimants’

relief from sanctions under CPR 3.9.

costs were substantially less than those claimed by the defendant, even though they had the carriage of the action. The costs incurred by both parties should have been less than they were.

The claimants were entitled to £45,000, which represented a

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 145

the overriding objective under CPR 1.1 pointed firmly towards

retrospective permission to serve those statements. In explaining

dismissing the application. The claimant had made much of

ts non-compliance, in respect of one witness the defendant

the need for it to be on an equal footing with the defendants.

referred to the fact that his wife had been ill and hospitalised before

However, neither party would be able to rely on expert evidence

the deadline for exchange, so that he had been spending much

at trial and the claimant could still instruct an expert to help

of his time at hospital or caring for his wife. A second witness had

it prepare for cross-examining the defendants’ witnesses.

had to attend unexpected professional engagements in Cyprus

Accordingly, it could not be said that a refusal of permission

before the deadline for exchange so that he was unable to

would prevent the claimant from properly presenting its case.

finish his witness statements on time. The defendant provided

Further, there would have been considerable expense if the trial

no explanation for non- compliance with the deadline in respect

was adjourned at such a late stage and the defendants would

of its third witness. It was common ground that, although the

have been prejudiced. Allowing a long-standing trial date to be

defendant had not formally applied under CPR 3.9, its application

adjourned in the circumstances would have been the antithesis of

had to be considered under that rule, in light of Mitchell and the

dealing with the case expeditiously and fairly. Adjourning the trial

other relevant authorities since.

could have caused disruption to other court users and there was no good reason for the claimant’s delay in bringing the application.

Accordingly, applying the overriding objective, the claimant was not permitted to adduce the expert evidence.

Applying those principles, the defendant argued that its noncompliance was only trivial because its 13-day delay in serving the statements was unlikely to have prejudiced the claimant. It also argued that it had provided a good reason for its failures to

Comment

comply with the deadline for exchange.

This is yet another decision which focuses on the wider issue

Allowing the application only in part, the judge held that as to

of court resources and the impact of orders in one case on the

triviality it was clear that since Mitchell the question of whether

parties in other, unrelated cases. This theme has been carried

the opposing party was prejudiced by the failure to comply was

through into the amended wording to CPR 3.8 which came into

less significant. A delay of 13 days, especially when the trial date

effect on 5 June 2014:

was not far away, was not trivial. As to the alleged good

‘…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).”

reasons for non-compliance, in the case of the first witness it was very possible that his wife’s condition had become the priority in his life to the extent that the demands of the litigation had seemed to him less important. On the assumption that that was the case, the first witness had had an exceptional reason for why his statements had not been served on time, and accordingly

Cranford Community College v Cranford College Ltd [Lawtel 18/06/2014] The Mitchell approach was also applied rigorously in Cranford Community College v Cranford College Ltd [Lawtel 18/06/2014].

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 claimant/respondent had issued proceedings against the

the second witness had done anything significant to complete his

defendant/applicant for passing off. Directions were given for

statements on time. In the circumstances, it was appropriate to

the exchange of witness evidence and subsequently the parties

refuse to allow both him and the third witness, who had provided

agreed an extension of time for exchange. The claimant duly

no explanation whatsoever for his non-compliance, to serve their

served its witness statements by the agreed deadline but the

witness statements late. Such a sanction was not disproportionate.

defendant failed to do so. It served statements from three of

It was important to remember that, since Mitchell, courts were

its key witnesses13 days later and then applied for the court’s 146

more particularly required to take into account not only the effect

on the defendant’s solicitors to contact the claimant’s solicitors

a grant of relief from sanctions would have on the parties, but

for the missing information, and they could not be criticised

also the culture of litigants in meeting deadlines, which was to be

for not doing so, but the prejudice claimed to have been caused

maintained as much as possible.

to the defendant could have been avoided by sending an email

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

or making a telephone call. Further, there had been no breach of a court order, no history of default and the claimant’s solicitors had acted immediately when they became aware of the omission.

In the context, the breach was trivial or insignificant. Even if that were wrong, it was just to grant relief in all the circumstances.

required should be served with the bill of costs. The respondent/ defendant served points of dispute contending that as a result of

Americhem Europe Ltd v Rakem Ltd and others (2014) EWHC

that omission CPR 44.3B(1) required that the success fees and

1881 (TCC)

insurance premium had to be disallowed unless the court ordered otherwise. The claimant immediately supplied the documents and applied for relief from sanctions.

He argued that (1) the automatic sanctions under CPR 44.3B did not apply where the documents were served late rather than not at all; (2) alternatively, relief from sanctions under CPR 3.9 should be granted because the sanction of automatic disallowance of additional costs was created before CPR 3.9 had been amended, at a time when relief would usually be granted absent prejudice; there was no disruption to the court; he had attempted to comply with the practice direction and the defendant could have requested the missing documents.

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 on how to apply 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 to the defendant, not the court. There was no duty

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).

The defendant filed a costs budget in the form of Precedent H annexed to CPR PD 3E. While compliant in every other respect, it was signed by a costs draftsman. He was included in the budget as a fee earner, but he had no involvement in the case other than the preparation of the costs budget.

The third party applied for an order that the defendant was in breach of CPR3.13 because the costs draftsman was 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.

Dismissing the application, the High Court judge held that there was no definition of “senior legal representative” in PD 3E or in the CPR. However, CPR 2.3(1) provided a definition of “legal representative” which was at least persuasive in considering the meaning of “senior legal representative” in PD 3E. Viewed overall, CPR 2.3(1) seemed to connote someone who was representing in a legal capacity, which was not what was being done by a costs draftsman whose only involvement was the preparation of a costs budget, and who did not give any form of legal advice or legally 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 147

earners listed in the budget he appeared to be the least senior,

served it on 23 December. The defendants’ solicitors objected to

at least by reference to his charging rate, and moreover as a

the late service of the statement stating that as they had acted

costs draftsman he was not independently able to verify that

for the electrician in the criminal proceedings and had privileged

the provision of resources that appeared in the costs budget was

information which might assist the defendants but which they

reasonable, particularly as he had no other involvement in the

could not disclose, they would be professionally embarrassed

litigation at all. However, that did not render the costs budget

if they continued to act for them. On 10 January 2014, the

a nullity. The fact that it was signed by the costs draftsman was

claimants applied for relief from sanctions and for permission

an irregularity.

to rely on the electrician’s statement. The judge held that the

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, given that no-one had been significantly disadvantaged by the irregularity, was to require it to be remedied at the defendant’s cost and to compensate the third

claimants’ non-compliance was not trivial and their application for relief from sanctions was not prompt, but noted that their solicitors could not be criticised as they had done all in their power to contact the electrician. He concluded that the defendants were prejudiced by the late service of the statement as they could have instructed new solicitors had they received it earlier and dismissed the claimants’ application.

party for the modest cost involved in bringing the matter to the

Dismissing the claimants’ appeal, the High Court judge held that

attention of the court.

when considering whether to grant relief from sanctions the court looked at whether the breach was trivial. If a breach was trivial relief would be more readily granted. The judge had been correct

Jackson/Mitchell

in ruling that the breach was not trivial. The application for relief

Swinden and another v Grima and another [Lawtel 20/06/2014]

from sanctions had not been made promptly. It could have been

From Issue 24

issued when the electrician’s statement was served. Had the application been issued then it was unlikely that a hearing would

Three cases this week see the courts continue to adopt varying

have occurred before the trial date. It was right that Mitchell

and inconsistent approaches to non-compliance with rules and

did not confine relief to only trivial breaches. The court had to

orders.

look at all of the circumstances and inquire into why a breach

In Swinden and another v Grima and another [Lawtel 20/06/2014] the appellant/claimants had bought a pub from the defendant/ respondents in 2011. The claimants brought a claim against the defendants alleging that they had been induced into the sale by reason of a fraudulent misrepresentation by the defendants concerning the cost of electricity. The claim was stayed pending the outcome of criminal proceedings concerning the unlawful abstraction of electricity from the premises by an electrician. In 2013 it was agreed that witness statements in the civil proceedings would be served on 6 December 2013 and a three-day trial was fixed for 6 January 2014. The claimants served their witness statements and stated that there might be one more statement to come from the electrician. They had arranged numerous meetings with the electrician to obtain a statement but he failed to attend.

He finally made a statement on 22 December and the claimants 148

had occurred. In the instant case there was good reason for the breach; the claimants’ solicitors had done everything in their power to secure a statement from the electrician. His statement was clearly important. However, the judge had also looked at the prejudice to the defendants that would result from its late service. The defendants’ solicitors would have had to withdraw, the defendants would have to instruct new representation and the trial date would have been lost. The lost trial date would prejudice not only the defendants but other litigants too. It was in the public interest to ensure that other litigants got justice promptly. The loss of a trial date could not be compensated by a costs order. Since Mitchell the courts had moved away from such an approach.

Gordon v Fraser [Lawtel 23/06/2014].

The court adopted a different approach in Gordon v Fraser [Lawtel 23/06/2014].

The defendant, who was being sued by the claimant, her 93-year-old father, applied on the first day of trial to call a witness, despite having failed to serve a witness statement or witness summary in time.

The claimant alleged that the defendant had improperly withdrawn money, of which he was the beneficial owner, from a bank account in their joint names. The defence was that the claimant had withdrawn the money himself to finance his girlfriends and gambling. The manager of the relevant branch of the bank said that that the claimant had attended the bank on his own and made the withdrawals. The defendant intended to call the branch manager as a witness. After a series of extensions of time, a date for exchange of witness statements was agreed.

Almost three months after that date, the defendant served a witness summary relating to the bank manager’s evidence. No good reason for breach of the court timetable was established.

what loss had been caused. That would depend on what the outcome of the original action would have been, which might not be easy to decide. A different deterrent, such as allowing the case to proceed while imposing a wasted costs order, might be more effective. The extent to which the court had to take account of the likelihood of substantial satellite litigation resulting from a refusal of relief from sanctions was unclear, but a refusal of relief might be seriously counterproductive to efficiency and cost.

It was also relevant that the basic aim of a trial was to correctly decide a party’s rights. The exclusion of relevant evidence risked imperilling the integrity of the judicial process. In the instant case it was appropriate to allow the defendant’s application. While her default was not trivial, it was not high on the scale of seriousness.

To have tried the case without the only available independent evidence would have been very undesirable and would have given rise to a serious risk of injustice and to the possibility of an inaccurate finding that the defendant was a thief. As her default had not created a need for an adjournment and had caused no prejudice to anyone, promoting rigorous compliance with court rules was neither proportionate nor justifiable.

Under CPR 32.10, the bank manager could not be called as a witness without the court’s permission.

Allowing the application, the deputy High Court judge held that as the application had been made after the time for service had expired, it was governed by the principles relating to relief from sanctions in Mitchell, which contained a strict approach to default and stipulated that its unforgiving doctrine be robustly applied.

The defendant’s breach was not trivial and was not explicable by any good reason. Ordinarily, therefore, Mitchell would not support relief from sanctions because there were no compelling circumstances. However, Mitchell was not entirely inflexible; the

Davies v Liberty Place (Sheepcote Street) Management Co (2014) EWHC 2034 (Admin) In the context of other decisions it is difficult to follow the reasoning in Davies v Liberty Place (Sheepcote Street) Management Co (2014) EWHC 2034 (Admin) other than as a softening of the judicial approach to Mitchell. It can be seen, however, that the default in this case arose early in the proceedings and as in the previous case there was no threat to any form of hearing or court resources (apart from the time taken by the application).

court still had to give effect to the overriding objective and ensure

The appellant/claimant had been late in serving witness

that its response to default was proportionate and fair. There was

statements and had agreed a short extension of time with the

little guidance as yet to the circumstances in which it would be

respondent/defendant. That date was met, but 10 days later

appropriate to depart from the usual rule and, more particularly,

the claimant applied to rely on a further witness statement

as to the weight to be attached to the prospect of satellite litigation.

containing potentially significant, even determinative, evidence.

The practical effect of refusing relief from sanctions varied

He also made another statement and d applied to rely on it. Those

considerably in different contexts. Where, for example, refusing

events occurred before the close of pleadings, as a counterclaim

an application for relief from sanction would lead to a negligence

had been served with the defence and a reply and defence to

action against solicitors, issues for determination would be not

counterclaim had not been served by the defendant until four

only whether the solicitors’ default had been negligent, but also 149

weeks after the potentially significant witness statement. The

was only if and when that happened that CPR 3.8(1) was apposite

original trial window had to be postponed for three months. The

and an application for relief was required. The fact that a witness

defendant objected to service of the further evidence, arguing

statement was served after the specified date did not mean

that the application to rely was one of relief from sanctions and

that the defaulter was automatically precluded from relying on

that the criteria established by Mitchell had not been met. Its

the statement unless he applied for and was granted relief under

case was that the effect of CPR 32.1 was that, on the expiry of

CPR 3.9. The rules did not need to be interpreted in a draconian

the date set by the court for submission of witness statements,

way and to do so would treat late service of a witness statement

a sanction resulted whereby the witness could not be called to

more severely than late service of a statement of case, or

give oral evidence unless the court gave permission and that such

disclosure, or other directions. In all those instances default did

permission required an application for relief from sanction.

not lead immediately to the need for a party to apply for relief

The claimant argued that the judge had been incorrect to treat the matter as one in which relief from sanctions was required.

Allowing the appeal, the High Court judge held that if the judge had been correct to decide that the Mitchell criteria applied he would not have been wrong to view the claimant’s default as not trivial within the meaning of Mitchell. Similarly, there would have been no basis for holding that he had made any error of principle or wrongly exercised his discretion in refusing to grant relief from sanctions, if that was what the claimant was seeking.

from sanctions, but to an application for an “unless” order, and only where there was failure to comply with that did the sanctions regime become active. There was no reason in principle why late service of a witness statement should receive different treatment and why the same “two strikes” approach should not apply. Such a difference would be a trap for the unwary and unfair, and in the instant case the additional witness statement could potentially make a difference to the outcome of the case. The judge had been wrong to rely on the Mitchell criteria.

However, there was an alternative view of CPR 32.10 to that of the defendant, which was suggested in the notes to that rule in the CPR, namely that relief was not required unless and until the sanction had taken effect, which would only occur when a witness who would otherwise be called could not be called by reason of

Jackson/Mitchell Denton and others v TH White Ltd and another (and related appeals) (2014) EWCA Civ 906

CPR 32.10. It would be unusual if relief was required before the

From Issue 26

consequence imposed for non-compliance by a relevant rule or

Judgment has been handed down in the much anticipated appeals

order had arisen. There was no binding authority on the instant point; CPR 32.10 did not require an application for relief to be made provided that an application to extend time for service and exchange of witness statements had been made before the witness was due to be called. Under CPR 3.8(1) failures to comply with rules or court orders meant that sanctions took effect unless the defaulter applied for or obtained relief. CPR 3.8(1) dealt with a situation where, without it and the inherent jurisdiction of the court it regulated, the defaulters would be without a remedy because the sanction for non-compliance had taken effect and

relating to early Jackson/Mitchell case management decisions.

The outcome is a new set of guidelines as to how CPR should be applied by the courts.

In Denton and others v TH White Ltd and another (and related appeals) (2014) EWCA Civ 906 there were three conjoined appeals in which one or other party had sought relief from sanctions arising pursuant to CPR 3.9, the court was required to determine the correct approach to the rule and to the guidance given in Mitchell.

prima facie left no way of escape. CPR 3.8(1) was not dealing

The respective judges had purported to apply the Mitchell

with situations where the sanction was only contingent because

guidance, but in each case, the parties had been treated

the rule or order specifying the sanction offered a route to

inconsistently.

avoiding it; the rule was not apt for that purpose. A consequence only operated if and when permission was sought and refused. It 150

Allowing all three appeals but with Jackson LJ dissenting in part

in the reasoning, the Court of Appeal held that Mitchell had been

should concentrate on an assessment of the seriousness and

misunderstood and was being misapplied by some courts. It

significance of the very breach in respect of which relief from

was clear that it needed to be clarified and amplified in certain

sanctions is sought.

respects.

If a judge concludes that a breach is not serious or significant, then

The principal criticisms were summarised as follows. First, the

relief from sanctions will usually be granted and it will usually be

“triviality” test amounted to an “exceptionality” test which was

unnecessary to spend much time on the second or third stages. If,

rejected by Sir Rupert Jackson in his report and was not reflected

however, the court decides that the breach is serious or significant,

in the rule. It was unjustifiably narrow. Secondly, the description

then the second and third stages assume greater importance.

of factors (a) and (b) in CPR 3.9(1) as “paramount considerations” gave too much weight to these factors and was inconsistent with CPR 3.9 when read in accordance with CPR 1.1. They should be given no more weight than all other relevant f actors. It was said that the Mitchell approach downplayed the obligation to consider “all the circumstances of the case, so as to enable [the court] to deal

Stage 2 The second stage cannot be derived from the express wording of rule CPR 3.9(1), but it is nonetheless important particularly where the breach is serious or significant. The court should consider why the failure or default occurred: this is what the court said in

justly with the application”. Thirdly, it had led to the imposition

Mitchell at paragraph 41.

of disproportionate penalties on parties for breaches which had

It would be inappropriate to produce an encyclopaedia of good

little practical effect on the course of litigation. The result was that one party got a windfall, while the other party was left to sue its own solicitors. This was unsatisfactory and added to the cost of litigation through increases in insurance premiums. Fourthly, the consequences of this unduly strict approach had been to

and bad reasons for a failure to comply with rules, practice directions or court orders. Paragraph 41 of Mitchell gives some examples, but they are no more than that.

Stage 3

encourage (i) uncooperative behaviour by litigants; (ii) excessive

The important misunderstanding that has occurred is that, if (i)

and unreasonable satellite litigation; and (iii) inconsistent

there is a non-trivial (now serious or significant) breach and (ii)

approaches by the courts.

there is no good reason for the breach, the application for relief

A judge should address an application for relief from sanctions in three stages. The first stage is to identify and assess the seriousness and significance of the “failure to comply with any rule, practice direction or court order” which engages CPR 3.9(1).

from sanctions will automatically fail. That is not so and is not what the court said in Mitchell: the court will consider “all the circumstances of the case, so as to enable it to deal justly with the application”.

If the breach is neither serious nor significant, the court is unlikely

Thus, the court must, in considering all the circumstances of the

to need to spend much time on the second and third stages.

case so as to enable it to deal with the application justly, give

The second stage is to consider why the default occurred. The

particular weight to these first two important factors. In doing

third stage is to evaluate “all the circumstances of the case, so as

so, it will take account of the seriousness and significance of

to enable [the court] to deal justly with the application including

the breach (which has been assessed at the first stage) and any

[factors (a) and (b)]”.

explanation (which has been considered at the second stage). The

Stage 1 In these circumstances, the court felt it would be preferable if in future the focus of the enquiry at the first stage should not be on whether the breach has been trivial. Rather, it should be on whether the breach has been serious or significant. The court

more serious or significant the breach the less likely it is that relief will be granted unless there is a good reason for it. Where there is a good reason for a serious or significant breach, relief is likely to be granted. Where the breach is not serious or significant, relief is also likely to be granted. But it is always necessary to have regard to all the circumstances of the case. The factors that are relevant will vary from case to case. As has been pointed out in some of 151

the authorities that have followed Mitchell, the promptness of

court can, in an appropriate case, also record in its order that the

the application will be a relevant circumstance to be weighed in

opposition to the relief application was unreasonable conduct

the balance along with all the circumstances. Likewise, other past

to be taken into account under CPR 44.11 when costs are dealt

or current breaches of the rules, practice directions and court

with at the end of the case. If the offending party ultimately wins,

orders by the parties may also be taken into account as a relevant

the court may make a substantial reduction in its costs recovery

circumstance.

on grounds of conduct under rule 44.11. If the offending party

The appeal court went on to say that it wished to make it plain that it is wholly inappropriate for litigants or their lawyers to take advantage of mistakes made by opposing parties in the hope that

ultimately loses, then its conduct may be a good reason to order it to pay indemnity costs. Such an order would free the winning party from the operation of CPR 3.18 in relation to its costs budget.

relief from sanctions will be denied and that they will obtain a

The judges commented on the submissions that have been

windfall strike out or other litigation advantage. In a case where

addressed to the consequences of scarce public resources. This,

(a) the failure can be seen to be neither serious nor significant, (b)

they said, is now sadly a fact of life, as much in litigation and in the

where a good reason is demonstrated, or (c) where it is otherwise

courts as elsewhere. No judicial pronouncement can improve

obvious that relief from sanctions is appropriate, parties should

the position. It does, however, make it all the more important

agree that relief from sanctions be granted without the need for

that court time is not wasted and hearings, once fixed, are not

further costs to be expended in satellite litigation. The parties

adjourned.

should in any event be ready to agree limited but reasonable extensions of time up to 28 days as envisaged by the new CPR 3.8(4).

It should be very much the exceptional case where a contested application for relief from sanctions is necessary. This is for two reasons: first because compliance should become the norm, rather than the exception as it was in the past, and secondly, because the parties should work together to make sure that, in all but the most serious cases, satellite litigation is avoided even where a breach has occurred.

The court will be more ready in the future to penalise opportunism.

The duty of care owed by a legal representative to his client takes account of the fact that litigants are required to help the court to further the overriding objective. Representatives should bear this important obligation to the court in mind when considering whether to advise their clients to adopt an uncooperative attitude in unreasonably refusing to agree extensions of time and in unreasonably opposing applications for relief from sanctions. It is as unacceptable for a party to try to take advantage of a minor inadvertent error, as it is for rules, orders and practice directions to be breached in the first place. Heavy costs sanctions should, therefore, be imposed on parties who behave unreasonably in refusing to agree extensions of time or unreasonably oppose applications for relief from sanctions. An order to pay the costs of the application under CPR 3.9 may not always be sufficient. The 152

Comment On the face of it this clarification is helpful and relieves some of the pressure on practitioners. Everyone is now aware of the importance of avoiding a default which results in a sanction. If a default is unavoidable the new ‘buffer’ provision in CPR 3.8 may be used to agree an extension of up to 28 days, provided that there is no impact on a hearing date – a point relating to court resources. If more than 28 days is required and/or a hearing may be put at risk, an application must be made before the default arises but that is not one for relief under CPR 3.9. It falls to be considered by reference to the overriding objective.

If, despite all of this, a party does find itself in default it must consider its position under the new three stage test. The inference is that missing a time limit by a short period and applying for relief promptly will probably be looked on favourably, particularly as the opposing party is positively discouraged from raising any objection, at risk of bearing severe costs consequences. With a more serious or significant breach, for which there is likely to be little good reason, the prospects of successfully applying for relief from sanctions will be lower. However, two problems remain. First, how long will it take before we know how stages 1 and 2 are going to be interpreted? This situation is bound to be aggravated by the fact that the non-defaulting party will almost certainly feel safer ‘sitting on its hands’, rather than taking any active steps and

risking criticism. Secondly, how will courts interpret stage 3 which

should be struck out because they had failed to prepare for trial,

appears to reintroduce the concept of standing back and looking

in particular by failing to pay the court fee contrary to Schedule 1

at the issue of justice between the parties? Can we expect

Civil Proceedings Fees Order 2008; failing to file a pre-trial checklist

consistency of approach here when the recent experience has

in breach of the directions and failing to prepare a trial bundle

been of widespread inconsistency? And to what extent will the

contrary to CPR 39.5. The claimants submitted that an application

issue of court resources impact on judges’ decisions and attract

to strike out under CPR 3.4(2) (c) had to be considered in the

disproportionate weighting?

light of the procedure under CPR 3.7(2), which required the court

Some of the real fear of Jackson/Mitchell has been removed but there remains uncertainty as to how far into default a party may fall and yet still be saved by invoking the stage 3 test.

to serve a notice of default in respect of the fee and that it was therefore relevant that no such notice had ever been successfully served. They also contended that the date for lodging the trial bundle was unclear because there had been a trial window rather thana fixed start date.

Jackson/Denton

Dismissing the defendant’s application, the High Court judge held

Abdulle and others v Commissioner of Police for the Metropolis

that the claimants’ argument relying on the court’s failure to serve

[Lawtel 3/11/2014 From Issue 039

a notice of default had no merit. The CPR and the order clearly imposed obligations on the claimants to pay the checklist and hearing fees. Although CPR 3.7(2) was written in mandatory terms,

The case of Abdulle and others v Commissioner of Police for the

where no notice was served by the court, a claimant nonetheless

Metropolis [Lawtel 3/11/2014] undoubtedly shows a significant

remained in breach due to non-payment. Insofar as the claimants

softening of the post Mitchell approach to the compliance with

suggested that had they been pressed for payment earlier, they

rules and orders.

may have paid the fee earlier that merely underscored their

The claimants had claimed that police officers had unlawfully detained and used excessive force against them. At a case management conference, it was ordered that the trial would start between 6 and 12 May 2014. It was also directed that both parties would have to fill out pre-trial checklists, which would be sent out by the court and that the claimants should file and serve trial bundles before the date fixed for trial. The defendant duly filled out and returned his pre-trial checklist, but the claimants failed to do so. When the claimants had failed to pay the required court fees a week before the trial window, the listing office attempted to serve a notice of default on them by fax. The trial window came and went following the claimants’ failure to file a checklist or pay the fee, as well as their failure to prepare a trial bundle.

The defendant applied to strike out the claims automatically. The court declined to do so as there was insufficient evidence to show that the notice of default had been successfully transmitted to the claimants, but it ordered them to pay the costs of the defendants’ application. They failed to pay those costs.

The defendant re-applied and argued that the claimants’ case

ability to pay the fees and made more blameworthy their failure to do so. The payment of court fees was mandatory and claimants should pay them when they were due, not only when pressed to do so. The claimants’ solicitors were well aware of the importance of paying the fees and of the potential consequences of failing to do so. As to their contention that they had not known when to lodge the trial bundle, a start date had not been fixed for trial because of the failure to pay the fee. Where there was a short period during which a trial was set to start, and a timetable which was fixed by reference to a trial start date, the date for lodging bundles had to be calculated by reference to the first date of the period. Considering all the circumstances, including the fact that the failure to pay the fee was a serious breach with particularly significant procedural consequences, namely the loss of the trial window, as well as the need to enforce the rules of the court and only to allocate proportionate resources to each claim, on balance it was not appropriate to strike out the claim. Although the behaviour of the claimants’ solicitors was worthy of real criticism, the case was all but ready for trial and was not insubstantial. The appropriate course was to allow the claim to proceed, but to stay 153

it until the claimants had paid the outstanding costs order, failing

implied that she was dishonest and guilty of fraud as she had

which their claim would be automatically struck out.

forged the GP’s letter. The local authority, through a legal officer,

Comment The most surprising aspect of this judgment is the fact that the claimants succeeded even through there was a clear impact on court resources: one set of court dates was lost; and another would need to be allocated to the case. The amendment to CPR 3.8 permits the parties to agree an extension of time where a sanction is in place ‘provided always that any such extension does not put at risk any hearing date’. When applying for relief from sanctions under CPR 3.9 the impression was given that an application would be looked at critically if additional time required by the applicant would disturb a trial date. This case suggests a watering down of that approach.

replied that it was happy to offer the claimant an apology but did not agree that she had been defamed, that any action would be robustly defended and offered mediation which the claimant declined due to the expense. The local authority instructed a neutral third party, a barrister, for an independent evaluation.

He concluded that the contents of the letter were subject to absolute privilege because it was an investigation into the possible commission of an offence and would not be regarded by the courts as defamatory. The claimant commenced proceedings without further notice to the local authority. She drafted a claim form issued in April 2014; it was defective in that it did not provide particulars of claim and a stay was ordered until June to ensure compliance. The local authority was served on 24 July. The legal officer was out of the office and on her return found an envelope

Robinson v Kensington and Chelsea Royal Borough Council and another [Lawtel 5/11/2014]

addressed to the business manager. She took steps to instruct counsel by 11 August, by which time default judgment had been entered and it was only then that she noticed that it should have

In the second case Robinson v Kensington and Chelsea Royal

been filed by 8 August. She immediately telephoned the court

Borough Council and another [Lawtel 5/11/2014] the claimant

to say that the local authority intended to defend the claim.

was the mother of a child. The litigation had arisen from issues

The local authority filed the application to set aside in default of

relating to the child’s education. The defendant had received

acknowledgment of service.

a letter from the child’s GP on 9 April 2013 forwarded by the claimant, stating that the child could not attend school as he was under a lot of stress due to problems at school, that he had been referred to a clinic for psychological support and suggesting that he stay at home until he had had an assessment. The local authority’s Education Welfare Officer, the second defendant, wrote to the GP and sent a copy to the claimant. The letter stated that the child had been absent from school for a length of time and since receiving the GP’s letter she had liaised with the clinic who said it had not received a referral letter from the GP but had seen the child through the walk in clinic.

The defendant stated that the claimant had received a formal warning that the child’s continued absence could lead to the issuing of a fixed penalty notice and, given the background, asked whether the GP was able to confirm if she had referred him to the clinic and that he was unable to attend school. The claimant wrote to the local authority in May 2013 threatening legal proceedings on the basis that its letter contained defamatory innuendo and 154

The local authority submitted that the default judgment against it should be set aside pursuant to CPR 13.3 as it had a real prospect of successfully defending the claim as the words complained of did not bear the meaning the claimant attributed to them to justify continuing the proceedings and that the breach was not so serious or significant.

Allowing the application the High Court judge held that the issues were whether the local authority had a real prospect of successfully defending the claim and, if so, whether the failure to comply with the requirement to acknowledge service by 7 August was a significant failure in the current context and considering the overall justice. The words complained of had to be read in context. The defendant had made a number of references to the GP’s letter where she actually asserted its authenticity; there was nothing that cast doubt on its authenticity. Any publication to other healthcare providers and administrators would be limited as only a limited number would have access to the claimant’s and the defendant’s medical notes. No doubt would be cast on the claimant’s honesty in the eyes of such healthcare providers

or administrators and they would infer that there were a

to do so. In fact, the claimant had had sufficient information to

number of explanations for the non-receipt of the referral from

formulate the particulars of claim for some time and there was

the GP including administrative mishap. The local authority

no adequate explanation why there had been a delay and why it

had a real prospect of successfully defending the claim. In the

had done everything at the last moment. The defendant had only

circumstances, the failure to serve the acknowledgement of

been served a witness statement in draft form three days before

service was not serious and significant; the delay only amounted

the hearing. It was necessary to consider the prejudice to both

to five calendar days and the process had already been delayed by

parties. The defendant would suffer greater prejudice if the claim

the difficulty the claimant had had in issuing the proceedings. The

were to go ahead, particularly where the claimant had stated in

parties had been negotiating but the claimant had herself caused

its supplemental skeleton that there was no point to be taken in

significant delay in failing to put forward a compliant claim form

relation to a limitation period. The instant case was not one of the

and particulars of claim. There was a further delay on her part by

defendant getting a windfall in being able to rely on a limitation

not serving proceedings until 24 July and she had not given any

defence; a limitation period was there to protect a defendant from

indication that the local authority should expect proceedings.

stale claims and to permit a defendant to move forward without

Frontier Estates v Berwin Leighton Paisner LLP [Lawtel 4/11/2014] Every case is on its own facts but the claimant in the commercial case of Frontier Estates v Berwin Leighton Paisner LLP [Lawtel 4/11/2014] received little sympathy from the court, even though the case was at an early stage.

the threat of litigation. The defendant would suffer the greater prejudice; there had been no satisfactory explanation or reasons for a six-month delay. The Master had been correct in his overall conclusion, and although he had erred in proceeding under CPR 3.9 rather than the appropriate provision, he had been troubled, like the instant court, by a lack of a satisfactory explanation for delay and the resulting prejudice.

The appellant/claimant appealed against a Master’s dismissal of an application for an order to extend the time for service of particulars of claim.

The appellant/claimant had sought to issue a contractual and or tortious damages claim against the respondent/ defendant solicitors’ firm in connection with a refinancing of the acquisition of land and property. In an earlier judgment, it had been held that the Master had erred in considering the claimant’s application to extend time, made prior to the original time for service expiring, under CPR 3.9 and not CPR 3.1(2)(a). It was common ground that the application to extend time had been an in time application.

Dismissing the appeal, the Deputy High Court judge held that it was the court’s task to exercise its discretion under CPR 3.1(2)(a) in accordance with the overriding objective, to ensure justice and that litigation was conducted at a proportionate cost under CPR 1.1(2). The instant case was one in which everything had happened last minute on the claimant’s side; the claim had been issued just before the expiry of the limitation period and the claim form had been served and an application made at the last moment.

There had been no pre-action protocol letter in circumstances where the claimant had had sufficient information to enable it

Jackson/Mitchell/Denton Bankside Hotels Ltd v Gourgey [Lawtel 18/11/2014] From issue 41 In previous editions of this periodical we have questioned whether we are already seeing a significant softening of the courts’ approach to relief from sanctions in the post Denton era.

This seems to have been the case in Bankside Hotels Ltd v Gourgey [Lawtel 18/11/2014].

The applicants had served three unfair prejudice petitions in respect of three companies of which the first respondent was a director. The applicants had served a request for further information. The respondents objected to the request’s content on the grounds it was neither reasonable nor proportionate, but had later consented to an order that they would provide “a full response”. They failed to reply and an unless order was made requiring them to provide “their” response by a certain date, in default of which their defence would be struck out. The respondents served a document purporting to comply, but the 155

claimant considered that the reply was defective and in breach of

was right to do so. Taking all the matters into account, and placing

the unless order because it did not contain a signed statement of

weight on CPR 3.9 (1)(a) and (b), relief should be granted. The

truth and did not give a “full” response.

overriding objective was to deal with cases justly. There was a

The respondents argued that the reference in the unless order to “their” response meant that they could choose how to respond.

Allowing relief from sanction, the deputy High Court judge held that the failure to verify a reply to a request for further information did not make the document a nullity. Under CPR 22 2 it was not struck out simply by virtue of the absence of a statement of truth.

Accordingly, the respondents had not failed to comply with the consent order by lack of a statement of truth.

The unless order could only sensibly be interpreted against the background of the consent order. The unless order was intended to enforce the consent order and the respondents were not entitled to object to the consent order. There were several

need to enforce compliance with rules and orders, but Denton had displaced the perception post Mitchell that relief from sanctions had to be refused where the breach was anything other than trivial. An insistence on enforcing compliance with court orders where there was no effect on the proceedings was not the right approach in the light of Denton and would ignore the need to deal with cases justly. It would not be just, fair or proportionate to refuse relief, but it would be granted on terms that the respondent pay the applicant’s costs on a indemnity basis and a further unless order would be made requiring a full response to the request within 21 days, in default of which the defence would be struck out. Barring something extraordinary the court would expect compliance.

examples of egregious non-compliance by the respondents which demonstrated a substantial failure to respond adequately to the request. They were obliged to comply with the unless order, particularly because it had been made to enforce a consent order.

The reply was plainly incomplete and insufficient, so the unless order was effective unless relief from sanctions was granted.

On an application for relief from sanctions under CPR 3.9 (and applying Denton) the court had to consider the seriousness of the breach, the reason for the breach and all the circumstances to enable the court to deal with the case justly. An assessment of the seriousness of the breach should not consider unrelated failures, which should be considered as part of the overall circumstances.

The failure to reply adequately was a serious and significant default and disrupted the litigation process. The default had occurred because the respondents had decided to answer only those questions that they considered to be valid and appropriate, but that had not been open for them to do. There was no good reason for the breach. In relation to the overall circumstances, the evidence fell short of establishing a course of conduct designed to delay the hearing, but delay had been caused. The delay would not affect the trial date, but it might have inconvenienced the applicant. The respondents had also delayed in making their application for relief. It had to be recognised that non-compliance with an unless order always resulted in deprivation. The point of CPR 3.9 was that the court had a discretion to grant relief if it 156

Jackson/Mitchell Mirza v Norbert Dentressangle Logistics Limited From issue 009 We represented the defendant in this claim, brought by the claimant following a road traffic accident. The defendant’s lorry driver collided with the rear of a car owned by the claimant.

The lorry driver reported that the circumstances of the accident were suspicious, indicating that the accident had been staged.

Those suspicions increased when claims for personal injury were brought by, amongst others the claimant, who later accepted that she was not in the car at the time of the collision. None of the claims for personal injury progressed, but the claimant pursued a claim for damages for credit hire through Accident Exchange, and for the loss of value of her car. The claim was valued at around£46,000, predominantly credit hire.

During the course of the proceedings we obtained various orders against the claimant, and in particular an order that she disclose documentation in relation to her car, and if she could not, that she explain who the car was sold to, when it was sold, and how much she received for it. The claimant did not comply with the order, and we obtained an unless order, the default position being strike out. The claimant complied with some, but not all

of the requirements of the unless order, and we obtained an order that the case be struck out as a result.

The claimant made an application for relief pursuant to CPR 3.9, and the matter came before DDJ Stacey sitting in Walsall County Court on 17 December. He held that the default by the claimant was not trivial, and that there was no good reason for her default, and as such the sanction should “usually” apply.

However, this meant that the court had discretion, and litigation had to be conducted justly. Exercising that discretion he found that the case was ready for trial, it was a large case, and that the defendant had not suffered any prejudice, and indeed had obtained some useful cross examination material for use at trial. In light of this, and because the claimant had only failed to comply with one order, her application was allowed and the case reinstated.

That decision by DDJ Stacey was made the same day that the Court of Appeal handed down judgment in Durrant v Chief Constable of Avon & Somerset Constabulary (2013) EWCA CA Civ 1624, Lord Justice Richards recording, inter alia, “Equally, however, if the message sent out by Mitchell is not to be undermined, it is vital that decisions under CPR 3.9 which fail to follow the robust approach laid down in that case should not be allowed to stand.

Failure to follow that approach constitutes an error of principle

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entitling an appeal court to interfere with the discretionary

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decision of the first instance judge. It is likely also to lead to a

Geoff Owen, Learning & Development Consultant

decision that is plainly wrong, justifying intervention on that basis too”.

We appealed to the designated civil judge, HHJ Gregory, who heard

T: 01908 298216 E: gro@greenwoods-solicitors.com

the appeal on 3 March. He held that the decision of DDJ Stacey was wrong. He had taken into consideration factors that were irrelevant having found, quite correctly that there was a non-trivial

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default, with no good reason for it. It followed that the decision

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of DDJ Stacey was reversed and the claimant’s case stands struck out with our client’s costs to be paid by the claimant.

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. The Parabis Group is neither a legal entity nor a trading name or division of a legal entity, it is merely a description ascribed to a group of legal entities with common ownership.