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LITIGATION LINE 2015 A Review of all the Essential Case Summaries and Legislative Updates

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Contents...

1

December 2014.................................................................................................................. 6

Costs-Period 3......................................................................................................................... 89

Costs......................................................................................................................................... 6

The appeal would be allowed............................................................................................. 90

Costs – Order for costs............................................................................................................ 8

Summary Judgement............................................................................................................ 90

Judicial Review....................................................................................................................... 12

Human Rights Act................................................................................................................... 91

Mental Capacity.................................................................................................................... 14

Insurer Liability –Guernsey...................................................................................................... 92

Costs......................................................................................................................................... 16

Insurers Obligations – Privy Council....................................................................................... 96

Defective Premises................................................................................................................. 18

Claim Form Service................................................................................................................. 99

Mental Health......................................................................................................................... 22

Abstract................................................................................................................................... 22

8

Contempt of Court................................................................................................................. 26

Professional Negligence: Standard Letters Can be Dangerous....................................... 102

Abstract................................................................................................................................... 26

A Trustee to a Bankruptcy cannot be held Personally Liable for the Costs of Previous

Negligence.............................................................................................................................. 30

2

July 2015................................................................................................................................... 102

Hearings when pursuing an Appeal..................................................................................... 103

Damages: You Have to Prove Your Loss.............................................................................. 104

January 2015......................................................................................................................... 32

CPR Case Law Roundup....................................................................................................... 104

Harassment.............................................................................................................................. 32

How Prompt is Prompt When Applying to Set Aside? : Priestley v Dunbar and Co

Service of Claim Form............................................................................................................ 34

[2015] EWHC 987 (Ch)............................................................................................................ 105

Claim for Damages against Highway Authority................................................................. 36

Costs: Part 36, Partial Success and Entitlement?................................................................ 106

Breach of Duty........................................................................................................................ 38

Cost Budgeting: Pitfalls for Commercial Litigators.............................................................. 106

Damages in Contract............................................................................................................ 40

3

9

February 2015....................................................................................................................... 42

August 2015............................................................................................................................ 108

Coventry v Lawrence: A Sigh of Relief for Practitioners as the Supreme Court

Service of Proceedings.......................................................................................................... 42

Endorses the Old CFA Rules................................................................................................... 108

Strike out- Abuse of Process.................................................................................................. 44

Claim Forms Are For Service: Another Salutary Reminder................................................. 109

Discovery................................................................................................................................. 45

Court Bundles: Another Warning from Jackson LJ.............................................................. 110

Summary Judgment............................................................................................................... 48

Appeal Delays and New Guidance.................................................................................... 111

Indemnity Costs...................................................................................................................... 49

Statement of Truth: Not for the Office Cat.......................................................................... 111

Costs......................................................................................................................................... 50

Witness Evidence: Quality not Quantity Will Always Prevail.............................................. 112

Negligence.............................................................................................................................. 53

4

10 September 2015................................................................................................................. 114

March 2015............................................................................................................................. 56

Proportionality and Other Costs Issues................................................................................. 114

ATE Legal Expense Insurance................................................................................................ 56

Costs Budgeting: A Sanity Check......................................................................................... 115

Negligence.............................................................................................................................. 57

The Need for Expert Evidence: Proportionality and Necessity.......................................... 116

Costs......................................................................................................................................... 59

Litigation Can be Bad for your Health: Warning to Clients about Risks........................... 117

Relief from Sanctions.............................................................................................................. 60

Airline Delay Litigation: Recent Case law............................................................................ 118

Costs Budget........................................................................................................................... 62

Litigation Round Up................................................................................................................ 119

Costs- Refusal to engage in ADR.......................................................................................... 63

5

11 October 2015........................................................................................................................ 120

April 2015.................................................................................................................................. 66

Social Media and Litigation.................................................................................................. 120

Summary Judgment............................................................................................................... 67

Relief from Sanctions: Recent Cases.................................................................................... 120

Non –Delegable Duty of Care.............................................................................................. 68

Witness Evidence, Letters before Action and Pleadings................................................... 121

Limitation................................................................................................................................. 70

Delay and Abuse of Process................................................................................................. 122

Civil Court System Review: An Online Civil Court?............................................................. 123

Flight Delay Compensation: A Ruling from the ECJ........................................................... 124

6

Conflict of Laws....................................................................................................................... 73

May 2015.................................................................................................................................. 76

Case Management................................................................................................................ 76

12 November 2015.................................................................................................................. 126

Wasted Costs........................................................................................................................... 78

Costs Part 36............................................................................................................................ 79

Facts......................................................................................................................................... 126

Default Judgment.................................................................................................................. 80

Allocation To The Small Claims Court: Finacial Mis-Selling Cases..................................... 127

Relief from Sanctions.............................................................................................................. 82

Application To Amend Pleadings Ordered -Costs Penalty Due To Failure To Consent.. 129

Discount Rate CICA............................................................................................................... 85

CPR 36: Offer Letters............................................................................................................... 129

Costs Budgeting: A New Precedent Q................................................................................ 130

Insolvency Proceedings Exemption: Lord Justice Jackson Speaks Out........................... 131

7

June 2015................................................................................................................................. 88

Costs......................................................................................................................................... 88

Costs-Period 1......................................................................................................................... 89

Costs-Period 2......................................................................................................................... 89

Summary Judgment: Guidance From The Court Of Appealwith Disputed

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Section 1 December 2014

Costs Flood v Times Newspapers Ltd [2014] EWCA Civ 1574 In 2007, the defendant company, TNL, published an article in The Times, in which it made allegations concerning the claimant, F. F brought proceedings for libel. In the course of proceedings, TNL withdrew its defence of justification and, in 2013, F was awarded £60,000 in damages. TNL was ordered to pay all the costs of the action, including the costs of the trial of damages and the reserved costs of the trial of a preliminary issue concerning public interest privilege. There were no offers made under CPR pt 36 in the case, and so the judge had a discretion as to costs in accordance with CPR 44.2. The issue before the court was who ought to have paid for the costs of the preliminary issue. At first instance, TNL argued that F had sued over the publication of the article in its print edition and online. Each separate publication had given rise to a separate cause of action. TNL’s defence of privilege had succeeded in respect of most of the publications sued on, and it should therefore have had its costs of that issue, which it had won. The judge rejected that argument, holding that F was the successful party and there was no reason to depart from the general rule that, as such, he was entitled to the costs of the action. TNL appealed to the Court of Appeal, Civil Division.

The issue for the court was whether the judge had exceeded the wide ambit of discretion given to her on the issue of costs. TNL contended that the judge had reached a decision that was plainly wrong, as she had not balanced the various factors that she considered fairly in the scale. TNL had won a substantial victory on the significant issue of privilege, and the judge’s decision that it should pay the entire costs of the litigation had been unfair and wrong.

The appeal would be dismissed.

There had been a number of important factors relevant to costs in the present case, as the judge had clearly recognised, and which she had carefully balanced in reaching her decision. Those were the overall outcome of the case, in terms of the award of damages to F and the vindication he had achieved by pursuing it; TNL’s success on the issue of privilege and the parties’ approach to settlement. Although

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the judge could have achieved the same decision as to costs by balancing the various factors, without declaring an overall winner, she had been entitled to regard F as the successful party in the litigation. Whether F had been the successful party overall or not, it was undoubtedly the case that TNL had won on a significant part of the case, comprising numerically the greater proportion of the publications. Where a party had succeeded on part of its case, even if that party had not been wholly successful, that was one of the factors to which the court would have regard when deciding what order (if any) to make about costs, as per CPR 44.2(4)(b). There was also no doubt that the judge had been fully aware of the importance of that point to the issue of costs and it was clear from her judgment that she had given the matter the most anxious consideration (see [34]-[36], [41], [53], [54] of the judgment).

It could not have been said, after the trial of the preliminary issue, that the outcome had been sufficiently clear cut to merit making an order for costs of the privilege issue in TNL’s favour. By the end of the trial, TNL had, among other things, withdrawn its defence of justification, had conceded liability and had been ordered to pay damages to F. The judge could have made a different order on costs to the one that she had done, but her discretion had been wide. She had not erred in exercising it (see [51]-[54] of the judgment).

John v MGN Ltd [1996] 2 All ER 35 applied; Loutchansky v Times Newspapers Ltd [2002] 1 All ER 652 applied; McCarey v Associated Newspapers Ltd (No 2) [1964] 3 All ER 947 considered; Roache v News Group Newspapers Ltd [1998] EMLR 161 considered; Clarke (t/a Elumina Iberica UK) v Bain [2008] All ER (D) 233 (Nov) considered.

Flood v Time A B v Ministry of Justice [2014] EWHC 3934 (QB) Abstract Costs – Order for costs The present proceedings concerned the issue of costs arising from the inability of the parties to reach agreement following an earlier judgment relating to liability and quantum. The litigation had concerned the alleged failure of the defendant to provide relevant information and data to the claimant in breach of s 7 of the Data Protection Act 1998, following the death of his wife. Various remedies were sought, including compensation for damage and distress and, in a second claim, the destruction of certain data. Shortly before a pre-trial review, the claimant abandoned a number of his claims. At the ensuing trial, the claimant was awarded nominal damages together with £2,250.00 damages for distress. The parties’ respective positions in relation to the issue of costs were at complete variance. In effect each party submitted that they should receive most if not all of their costs of

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the litigation and trial from the opposing party. Neither of them proposed that the court should conduct a further hearing, and there was no evidence before the court as to the amount or timing of the incidence of costs.

It was necessary to apportion the costs incurred both up to and including the pretrial review, and the costs incurred post pre-trial review. Consideration was also given to whether costs should be awarded against the claimant on the indemnity basis.

Consideration was given to the general rule as to costs in CPR 44.2.2 and CPR 38.6 and also the range of orders that could be made in CPR 44.2.6. and CPR 44.2.7.

The court ruled: The claimant had discontinued many claims pre-trial. It was not a situation where the claimant had simply decided not to deploy one or more legal arguments in favour of stronger ones concerning the same subject matter. On the contrary, the claimant had ceased to litigate about the vast majority of the material upon which he had hitherto chosen to do so. It was necessary to determine, as best possible in the circumstances, the costs incurred in litigating those claims which had been effectively discontinued or abandoned. In relation to the costs incurred by the parties up to and including the pre-trial review, it was appropriate that, whilst the defendant should receive a proportion of his costs from the claimant to reflect those parts of the original claim that were effectively discontinued or abandoned, the claimant should receive the costs of litigating those issues upon which he had been successful at trial. In relation to the post pre-trial review costs and those of the trial itself, I am of the view that as the successful party the claimant should receive his costs from the defendant. Although there were aspects of his conduct during the course of the litigation which could be open to criticism, ultimately they were not such as to satisfy the criteria for the making of an award on the indemnity basis (see [13]- [15], [18], [19], [22] of the judgment).

The claimant was to pay 80% of the defendant’s costs on a standard basis. The defendant was to pay 20% of the claimant’s costs on a standard basis. The defendant was to pay 100% of the claimant’s costs on a standard basis after the pretrial review up to and including the trial (see [24] of the judgment).

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Judicial Review R (on the application of Thomas) v Hywel Dda University Health Board[2014] EWHC 4044 (Admin) The defendant decided to cease provision of in-patient beds at a hospital. The claimant sought judicial review.

The issues for determination were: (i) whether the closure of the in-patient facility had amounted to a ‘substantial’ change; (ii) whether the closure of the in-patient facility without consultation had been justified on the grounds of the risk it had posed to the health and safety of patients and staff; (iii) whether the defendant had properly satisfied its statutory requirement to consult; and (iv) whether the defendant had breached its common law duty to consult.

The application would be dismissed.

(1)

In all the circumstances, the defendant had been entitled to find that the closure of the facility had not been a substantial service change (see [78] of

the judgment).

R v Criminal Injuries Compensation Board, ex p Webb [1986] NLJ Rep 536 considered.

(2)

In taking the decision to close the in-patient facility, the defendant had

considered more than the short-term health and safety of patients and staff.

It had taken into account such matters as the strategic objective of moving

patients out of hospitals into the community where they would receive

appropriate support. When the evidence was looked at fairly and as a

whole, the decision to close the facility had, therefore, not been based

simply upon immediate health and welfare concerns that would render

consultation unnecessary. In any event, if the decision had been taken

simply on the basis of risk to health and welfare, the defendant would have

been bound thereafter to have conducted a consultation exercise, if such

an exercise would have otherwise been appropriate (see [87], [88] of the

judgment).

(3)

The defendant had not erred in law in the manner in which it had

approached its statutory obligations to consult or in the conclusion it had

reached that consultation over the prosed change had neither been

required nor appropriate. The defendant had been entitled to consider

the change not substantial and, having considered the material

considerations, it had been entitled to conclude that consultation had

neither been required nor appropriate (see [105] of the judgment).

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(4)

As there had been no statutory requirement to consult, there was no scope

to read in any additional common law obligation to consult, unless the duty

of procedural fairness had required it. In the present case, no foundation

for such an additional duty had been suggested. It was not suggested that

there had been a legitimate expectation in the form of a promise or

established practice to consult, that a failure to consult would result in

conspicuous unfairness or that there had been a breach of the common law

duty of fairness at all (see [109] of the judgment).

Mental Capacity Re CT [2014] EWCOP 51 Court of Protection CT was born in 1929. He was married and had two children: a son and a daughter (EY). In May 2013, CT suffered a right hemisphere stroke, which caused him to have hemiplegia and impaired vision. He was diagnosed as having vascular dementia.

In June, CT executed a lasting power of attorney (LPA) for property and financial affairs, in which he, among other things: (i) appointed EY to be the sole attorney; and (ii) named nobody who was to be given notice of an application to register the LPA. The LPA was made, despite objections from the son. In July 2014, the Office of the Public Guardian (the OPG) applied for an order, under s 48 of the Mental Capacity Act 2005 for directions concerning CT’s mental capacity to make decisions relating to his finances and property. The application included a witness statement, which alleged that, among other things, CT had severed the joint tenancy of the matrimonial home and sought to register it in his sole name, and that EY had refused to allow the OPG to carry out inquiries as to CT’s mental state. In particular, she and her partner had prevented a special visitor from the Court of Protection to assess CT either in person or via a telephone call. EY objected to the application. She submitted that CT had had the capacity to make complex decisions at the relevant times. At a directions hearing, the court ordered that an expert’s report be obtained.

The expert stated that, although CT had capacity when at his best, his capacities would be enhanced by disinterested advice. The Court of Protection held that CT had had capacity to sever the joint tenancy. EY sought an order for costs against the OPG. EY submitted that the OPG had conducted its investigation in a disproportionately heavy-handed way and without regard to the limits of its statutory jurisdiction, the available evidence or the presumption of capacity. It had acted in disregard of the Act and CT’s rights under the European Convention on Human Rights.

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The court ruled: On the evidence, the OPG’s conduct had not been disproportionate and did not even approach the necessary threshold. It had not acted in blatant disregard of the Act or in breach of CT’s rights under the Convention. In the circumstances, it would be unjust to penalise the OPG by way of a costs order. With regard to EY, the court took a dim view of anyone who obstructed a special visitor of the Court of Protection. There was no doubt that EY and her partner had refused to let the special visitor visit CT or speak to him. Her insinuation that a special visitor was neither impartial or independent was unwarranted and offensive. Further, the expert report stressed the need for CT be given ‘disinterested advice’ (see [44], [46]-[48], [56] of the judgment).

In the circumstances, a departure from the general rule was justified. EY would be ordered to pay her own costs because her conduct, before and during the proceedings, had been aggressive and disingenuous, and had resulted in both sides’ costs being far greater than they would otherwise have been. The cost of the expert’s report would be equally divided between the parties (see [59], [60] of the judgment).

G v E (Costs) [2010] EWHC 3385 (Fam) applied.

Costs Greig v Stirling and another [2014] EWHC 4017 (QB) The proceedings concerned money claims made by the claimant against the defendants, which arose from dealings with Spanish properties (for the litigation history, see [3]-[33] of the judgment). During the course of the litigation, the second defendant signed an application notice seeking an order striking out the claimant’s claim on the grounds that, inter alia, the claimant had refused to obey an order that the estate of the late first defendant be served with the claim. The claim against the second defendant was subsequently struck out. The claimant applied to set aside: (i) an order dated 7 April 2014, which struck out his claim against the second defendant (the first order); and (ii) an order dated 18 June 2014, that the claimant pay the second defendant’s costs of the claim and his costs of the application for such costs (the second order).

The claimant submitted, first, that the first order should be set aside because, inter alia: (i) the second defendant’s application to strike out had not been served on him; (ii) the application had been dealt with by the court without a hearing under CPR 23.8(c), but the court had failed to inform the parties that it had proposed to deal with the application in that way; (iii) the effect of CPR PD 23.11.2 was that the

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order was to be treated as one which the court had decided to make of its own initiative, pursuant to CPR 3.3(4), with the consequence that he enjoyed the right, under CPR 3.3(5), to apply to have it set aside; (iv) although the deadline for such an application was seven days after service of the order, the order had not been served on him by the court and/or not received by him until he had received a letter from the second defendant in July 2014, he had made his application shortly after he had received the order, and the court should extend time and hear his application to set aside the order; and (v) notwithstanding the procedural points, it should be set aside on its merits. Secondly, the second order should be set aside.

The court ruled:

(1)

The first order had been one which had been made without a hearing, in

circumstances which had given the claimant a right, under CPR PD 23A and

CPR 3.3(5), to apply to have it set aside. It would be just to grant an extension

of time for making such an application, if one was necessary. Having

reconsidered the matter on the basis of evidence, which had included

facts that had not been before the judge who had struck out the claim,

the claim ought not to be dismissed. Standing back from the detail, it

seemed that, in all the circumstances, it would be unjust and

disproportionate for the court to respond to the breach, on the first occasion

it had been brought before the court, by dismissing altogether a claim

against the second defendant, which had to be assumed to be arguable

and which appeared to be substantial (see [2], [70] of the judgment).

Denton v TH White Ltd; Decadent Vapours Ltd v Bevan; Utilise TDS Ltd v Davies [2014] All ER (D) 53 (Jul) considered.

(2)

The second order had been parasitic on the striking out of the claim. Since

it had been made in the claimant’s absence, the court had had power,

under CPR 23.11(2), to re-hear it. Having done so, the second order would be

set aside, along with the first order (see [2] of the judgment).

Defective Premises Rendlesham Estates plc and others v Barr Ltd [2014] EWHC 3968 (TCC) The proceedings concerned two blocks of apartments built between 2003 and 2006. In total, there were 171 apartments. The developer, CWC, experienced financial difficulties. It put work out to tender, which was accepted by the defendant company, Barr. Barr carried out the construction work, but a large number of complaints were made by owners shortly after the apartments became available. CWC won an adjudication against Barr but, in February 2008, CWC

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went into administration, and it became very difficult for the owners to obtain any compensation. The owners had no contract with Barr. The claimants, being 120 of the owners brought proceedings against Barr under the Defective Premises Act 1972, alleging that their apartments had not been fit for habitation when completed.

They claimed the full cost of the remedial works to the common and structural parts as representatives of all the owners of the apartments who were not parties to the proceedings.

Three issues arose, relating to construction of s 1 of the Act. First, whether the relevant dwelling for the purposes of the Act was the individual apartment demised to the leaseholder, which could arguably include the balcony of which he enjoyed exclusive possession (but which did not form part of the demised property), or whether it was the entire building (or even both buildings) in which the apartment was situated. Their primary case was that the two blocks constituted a single ‘dwelling’ within the meaning of the Act; alternatively, that each block constituted a single dwelling. Secondly, what was meant by the words ‘… in connection with the provision of a dwelling’ in s 1 of the Act. Thirdly, what was meant by fitness for habitation. It was common ground that there was no cause of action under s 1 of the Act unless the building was not fit for habitation when completed.

The court ruled:

(1)

For the purposes of s 1 of the Act, the ‘dwelling’ was the individual

apartment as described in the lease together with, possibly, those parts

of the building to which the occupiers of a particular apartment had

in practice exclusive access for living, such as their balconies (see [46] of the

judgment).

Andrews v Schooling [1991] 3 All ER 723 considered; Uratemp Ventures Ltd v Collins [2002] 1 All ER 46 considered; Catlin Estates Ltd v Carter Jonas (a firm) [2006] All ER (D) 13 (Jan) considered; Bole v Huntsbuild Ltd [2009] All ER (D) 195 (Mar) considered.

(2)

It was an inescapable conclusion that the work done to the structural and

common parts of both blocks had been work done in connection with the

provision of each of the apartments in the two blocks, since the owner of

each apartment had an interest in and a financial responsibility for the

maintenance and repair of the structural and common parts of both blocks

(see [54] of the judgment).

Bole v Huntsbuild Ltd [2009] All ER (D) 195 (Mar) applied; Harrison v Shepherd Homes Ltd [2011] All ER (D) 140 (Jul) applied; Ashville Investments Ltd v Elmer Contractors Ltd [1988] 2 All ER 577 considered.

20

21

(3)

With regard to fitness for habitation, certain principles could be drawn from

the case law. The application of those criteria would be very fact-specific in

any particular case (see [82], [83] of the judgment).

Applying the relevant legal principles, a number of findings were made as to the different heads of damage including appropriate remedial work. Awards were made for residual blight on the value of the properties following remedial work, and for damages for distress and inconvenience (see [256]-[268], [300], [309] of the judgment) Bole v Huntsbuild Ltd [2009] All ER (D) 195 (Mar) applied; Harrison v Shepherd Homes Ltd [2011] All ER (D) 140 (Jul) considered.

Mental Health Bradbury and others v Patterson and other companies [2014] EWHC 3992 (QB) Queen’s Bench Division Mr Justice Foskett 28 November 2014 Mental Health – Representation – Litigation friend – Claim being brought against

doctor for alleged negligent surgery – Issue arising as to doctor’s capacity to

give instructions – Official Solicitor being appointed as doctor’s litigation friend

– Official Solicitor being granted order discharging as litigation friend after

funding withdrawn – Claimants applying to strike out order discharging Official

Solicitor – Whether application to be granted – Whether power to compel

Official Solicitor to continue to act – CPR 21.7(1).

Abstract Mental Health – Representation. The proceedings concerned claims brought against a doctor for damages for negligent surgery for breast cancer. They raised a novel point about what the court should do when the Official Solicitor concluded that he could no longer continue to act as litigation friend for a protected party in litigation because the anticipated source of funding for the Official Solicitor’s costs ceased to be available. The Queen’s Bench Division held that the court could not compel an Official Solicitor to continue acting in circumstances where funding had been withdrawn.

Digest The judgment is available at: [2014] EWHC 3992 (QB)

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The proceedings raised a novel point about what the court should do when the Official Solicitor concluded that he could no longer continue to act as litigation friend for a protected party in litigation because the anticipated source of funding for the Official Solicitor’s costs ceased to be available. The claimants were former patients of the first defendant doctor, P. They brought claims against him for damages arising from alleged negligent surgery for breast cancer carried out by him. At the material time, P was employed at a hospital as an NHS consultant by the third defendant NHS Trust (the Trust). P was initially represented by a solicitors’ firm (R). He became unwell and a psychiatric report supported the view that he lacked the capacity to give instructions for the purposes of the litigation. An Official Solicitor was appointed to act as P’s litigation friend, funded by the Medical Defence Union (the MDU), of which P was a member. The MDU subsequently withdrew its funding. As a result of that withdrawal of funding, the Official Solicitor applied to the court, pursuant to CPR 21.7, for an order that he be discharged as P’s litigation friend in each of the claims and R applied to come off the record. A judge granted the applications. Four of five claimants sought an order setting aside the order discharging the Official Solicitor as P’s litigation friend.

The issue for consideration was whether the court could compel the Official Solicitor to continue to act as a litigation friend where, as in the present case, he had initially consented to act in that capacity. The Trust contended that it could as that was the effect of CPR 21.7(1), supported by CPR 21.8(3). The Official Solicitor contended that the power to order the termination of a litigation friend’s appointment was not restricted in the manner contended for by the Trust. Consideration was given to Practice Direction 21.

The court ruled: Under the regime provided for by the CPR, there was no warrant for the conclusion that the consent of any person to act as a litigation friend was irrevocable. The court’s discretion to grant an application under CPR 21.7(1)(b) was a full one.

However, in reality, there might be little room to manoeuvre when presented with such an application (see [30], [31] of the judgment).

The Official Solicitor’s construction of the CPR was correct. The power to order the termination of a litigation friend’s appointment was not restricted in the manner contended for by the Trust. Because of the funding constraints to which the Official Solicitor was now exposed, the position of enforced continuation as a litigation friend would undoubtedly be unwelcome and uncomfortable. In all the circumstances, the judge had been entirely justified to make the orders asked of her relating to the cessation of the involvement of the Official Solicitor and R (see [27], [28], [29], [38] of the judgment).

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The proceedings would be transferred to a different judge for the resolution of the issue as to whether P lacked capacity to conduct the proceedings. If he did not, the issue of a litigation friend became irrelevant (see [45] of the judgment).

E, Re [1985] 1 All ER 609 considered; D (A Child), Re [2014] All ER (D) 20 (Nov) considered.

Contempt of Court Aziz v Ali and another; Jamil v Serwan and another company; Kazmi and another v Serwan an another company [2014] EWHC 4003 (QB) Queen’s Bench Division, Liverpool District Registry Mr Justice Lewis 28 November 2014

Contempt of court – Committal – Four individuals committing insurance

fraud and making statements of truth without honest belief in truth of

statements – Insurance company seeking committal to prison for contempt of

court – Whether individuals should receive prison sentence.

Abstract Contempt of court – Committal. Four individuals committed insurance fraud and made statements of truth without an honest belief in the truth of those statements.

The insurance company sought their committal to prison for contempt of court. The Queen’s Bench Division sentenced all four individuals to terms of imprisonment.

However due to the remorse of the fourth individual her term of imprisonment was shorter and was suspended.

Digest The judgment is available at: [2014] EWHC 4003 (QB) Four individuals were found by the court to have made false statements in the course of proceedings brought by them for compensation for injuries sustained in two separate car accidents. The first was Mr Aziz, a private hire vehicle driver. He had a wife and four children. The second was Mr Jamil a taxi driver. He was married with six children all of whom lived at home. His father was elderly and had serious health difficulties. The third was Mrs Saleem, a woman of 47 years of age. She lived with her husband and had three children. Mrs Kazmi was a single mother of three children, two of whom lived at home with her. She was the only one of the four that showed remorse for her actions. In reality, the accidents never happened. The individuals never suffered any injuries. The claims were false when made and were

26

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known to be false. All four individuals admitted that they had made false statements, verified by a statement of truth, without an honest belief in their truth. The claims for damages were dismissed following a five day trial. The Civil Procedure Rules required that certain documents, including particulars of claim, be verified by a statement of truth (see CPR 22(1)). A statement of truth was a statement that the person putting forward the document or making the witness statement ‘believes the facts stated in the document are true’ (see CPR 22(4)). CPR 32.14(1) provided that ‘Proceedings for contempt of court may be brought against a person if he makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.’

There was an application for committal to prison for contempt of court made in respect of the four individuals by the second defendant, insurance company.

The court ruled: The system of justice in United Kingdom required and depended upon people who brought claims and made statements in court proceedings acting truthfully and honestly. The dishonest making of false statements undermined that system of justice, public confidence in the justice system and struck at the heart of the fair administration of justice (see [14]-[16] of the judgment).

The evidence demonstrated that a series of fraudulent claims had been made.

The four individuals involved were motivated by greed and a desire to obtain money. The making of false statements as part of legal proceedings undermined the administration of justice. Courts had repeatedly emphasised the gravity of such conduct and had emphasised that those who made false claims should expect to be sent to prison. The appropriate sentence for Mr Aziz was one of six months imprisonment. The appropriate sentence for Mr Jamil and Mrs Saleem was one of eight months imprisonment. That would be suspended fo six months. In the case of Mrs Kazmi, her admissions and her real and genuine remorse meant that the sentence the court would impose could be shorter and could be suspended. The sentence would be 12 weeks imprisonment, that would be suspended for six months (see [see [13], [14], [18], [20], [24], [27] of the judgment).

Unless released earlier, Mr Aziz, Mr Jamil and Mrs Saleem would spend half of their sentences in prison and will then be released (see [25] of the judgment).

South Wales Fire and Rescue Service v Smith [2011] All ER (D) 39 (Oct) applied.

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Negligence Howmet Ltd v Economy Devices Ltd and others [2014] EWHC 3933 (TCC) Queen’s Bench Division, Technology and Construction Court Edwards-Stuart J 28 November 2014 Negligence – Duty to take care – Defective work or product – Claimant

bringing claim following major fire at factory – Claimant contending fire caused

by failure of probe manufactured by first defendant, EDL – Whether EDL

negligent or acting in breach of statutory duty – Electrical Equipment (Safety)

Regulations 1994, SI 1994/3260.

Statutory duty – Breach – Electrical equipment – Claimant bringing claim

following major fire at factory – Claimant contending fire caused by failure

of probe manufactured by first defendant, EDL – Whether EDL negligent or

acting in breach of statutory duty – Electrical Equipment (Safety) Regulations

1994, SI 1994/3260.

Abstract Negligence – Duty to take care. The Technology and Construction Court dismissed the claimant company’s claims in negligence and for breach of statutory duty against the manufacturer of a probe the failure of which it contended had been the cause of a major fire in its factory.

Digest The judgment is available at: [2014] EWHC 3933 (TCC) In February 2007, there was a fire at the claimant, H Ltd’s factory which caused losses in excess of £20m. It was H Ltd’s case that the fire had been caused by the failure of a probe that was supposed to detect a loss of liquid in a hot water tank.

The first defendant, EDL, was the manufacturer of the probe. H Ltd contended that the probe, known as a Therm O Level (thermolevel) had been negligently designed with the result that it was unreliable in service and, in any event, was not a ‘failsafe’ device. It also complained about the brochure produced by EDL which, it stated, contained misleading information as to the qualities of the product. The expression ‘failsafe’ was used in its engineering sense, namely that it described a system which, in the event of its own failure or maloperation, left the system it served in a safe or deactivated condition. EDL denied liability.

30

Consideration was given to H Ltd’s claims in negligence and for breach of statutory duty based on reg 14(1) of the Electrical Equipment (Safety) Regulations 1994, SI 1994/3260.

The claim would be dismissed.

On the evidence, H Ltd’s claim in negligence against EDL had to fail for want of proof of causation. In respect of breach of statutory duty, H Ltd had failed to prove that in the days immediately before the fire it had been relying on the thermolevel in the hot water tank to work properly and to act as a reliable safety device. In those circumstances, a claim based on EDL’s failure to provide a safe product had to fail.

The principal findings of fact were set out in the schedule attached to the judgment (see [259], [278], [298] of the judgment).

Lexmead (Basingstoke) Ltd v Lewis [1982] AC 225 considered; Trebor Bassett Holdings Ltd v ADT Fire and Security plc [2012] All ER (D) 153 (Aug) considered; Milton Keynes Borough Council v Nulty [2013] All ER (D) 164 (Jan) considered.

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Section 2 January 2015

Harassment Al Hamadani and another v Al Khafaf and others [2015] EWHC 38 (QB) The claimants brought an action for harassment against the defendants and sought an injunction restraining them from further harassing behaviour. The Queen’s Bench Division applying established law found that the claimants had made out their case for an injunction to restrain the third defendant from harassing them and the injunction would be granted in substantially the terms sought.

The claimants were professional antique dealers dealing in high value antiques and art. They were of Iraqi origin, as were all the defendants. The claimants, who were brothers, brought a claim for an injunction pursuant to the Protection from Harassment Act 1997. The claim arose from a dispute between the claimants and the first defendant, another antique dealer. That was alleged to have involved a course of harassing conduct instigated by the first defendant which culminated on the evening of 12 March 2014 in a visit to the claimants’ home in West London by the second, third, fourth and fifth defendants where it was said that, acting on behalf of the first defendant, they threatened and intimidated both the claimants causing them stress and anxiety. The claim sought an injunction to prevent future harassment.

The claim was brought against five defendants but, the claims were settled as against the first four defendants and the trial was effective only against the third defendant.

The issue was whether on the evidence the injunction should be granted against the third defendant.

The application would be allowed.

For a cause of action for damages for harassment to be made out, there had to be conduct on at least two occasions, which had been targeted at the claimant, which had been calculated in an objective sense to cause alarm or distress, and which was objectively judged to be oppressive and unacceptable. What was oppressive and unacceptable might depend on the social or working context in which the conduct occurs. A line was to be drawn between conduct which was unattractive and unreasonable, and conduct which had been described in various ways:

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‘torment’ of the victim. In principle, liability for harassment might be established on the basis that the defendant was part of a joint venture assisted a claimant, in a case where one defendant A aided and abetted another B, by spelling out that in such a case the conduct, knowledge, and purpose of B and what he ought to have known ‘shall be taken’ to be that of A (see [47], [48] of the judgment).

The claimants had made out their case for an injunction to restrain the third defendant from harassing them, and the injunction would be granted in substantially the terms sought (see [55] of the judgment).

Dowson v Chief Constable of Northumbria Police [2010] All ER (D) 191 (Oct) applied; Daniels v Metropolitan Police Comr [2006] All ER (D) 36 (Jul) considered.

Service of Claim Form Dunbar Assets plc v BCP Premier Ltd [2015] EWHC 10 (Ch) Chancery Division The proceedings concerned the service of a claim form by an alternative method, namely by email. The claimant was a banking institution concerned in lending money to organisations and individuals seeking investment for developments.

The defendant construction management company offered advice to banks on proposed lending opportunities. The claimant issued a claim form on 18 December 2013 for damages for breach of contract and/or breach of duty of care and/or misrepresentation and/or deceit, plus interest, in respect of advice provided to it by the defendant during between June 2006 and December 2008. The sum claimed was £300,000. On 3 March 2014, the claimant’s solicitors sent a copy of the sealed claim form and a notice of issue to the defendant by fax and requested copies of certain documents. There were various exchanges in communication between the parties. The claimant requested an extension of time for service of the claim form and particulars of claim. The defendant’s solicitors referred the claimant to the Pre-Action Protocol for Construction and Engineering Disputes, which required an application to the court on notice for directions.

Subsequently, it was agreed that the claimant would serve its claim form by 4pm on 3 April. That agreement was embodied in a consent order of the court. The claimant did not serve the letter of claim in accordance with the consent order.

Instead, its solicitors emailed a copy of the claim form to the defendant’s solicitors and a monochrome copy of it was placed in the document exchange for delivery next day to those solicitors. The claimant’s solicitors later wrote to the defendant’s solicitors seeking agreement for an extension of time to provide the letter of claim.

The defendant’s solicitors responded, stating that the claimant had not complied

34

with the consent order, that it was out of time for service of the claim form and that the request for an extension of time for service of the letter of claim was redundant.

In April, the claimant applied to the court for an extension of time to serve the claim form on the defendant and for relief from sanctions, pursuant to CPR 3.9. A deputy master ordered that service of the claim form by email amounted to good service, pursuant to CPR 6.15. The defendant appealed.

The issue for consideration was whether the deputy master had erred in holding that service of the claim form by email was good service, pursuant to CPR 6.15.

The appeal would be allowed.

It was evident from the language of CPR 6.15 that an application for an order permitting service by an alternative method or place would only succeed if:

(i)

it appeared to the court that there was good reason to authorise such

alternative service; and

the court decided to exercise its discretion in favour of permitting such

(ii)

alternative service (see [26] of the judgment).

The deputy master had been wrong to conclude that, on the facts, there had been a good reason to make an order under CPR 6.15. He had fallen into error by failing properly to take into account or examine why it was that it had come about that he had been asked to make the order sought. Had he done so, he would immediately have appreciated that the claimant had provided no explanation whatsoever for not serving the claim form properly in accordance with the rules. The present case fell far short of being sufficiently compelling for the court to permit the claimant to depart from the rules of service. The court would not exercise its discretion in favour of granting the order in circumstances where the claimant had given no explanation as to why it was that the order had not been served properly in accordance with the rules and in the light of the prejudice which might be caused by denying the defendant a limitation defence (see [32], [43], [44], [46], [47] of the judgment).

Kuenyehia v International Hospitals Group Ltd [2006] All ER (D) 169 (Jan) applied; Brown v Innovatorone plc [2010] 2 All ER (Comm) 80 applied; Hoddinott v Persimmon Homes (Wessex) Ltd [2007] All ER (D) 321 (Nov) considered; Abela v Baadarani [2013] 4 All ER 119 considered.

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Claim for Damages against Highway Authority Foulds and another v Devon County Council [2015] EWHC 40 (QB) The deceased was cycling his bike when he crashed over/through railings and was seriously injured. His estate brought a claim for damages against the defendant highway authority on the basis that it owed a duty of care to maintain railings sufficiently strong to act as a crash barrier. The Queen’s Bench Division, on the basis of established law, dismissed the claim.

The deceased was cycling down a steep hill when he lost control of his bicycle and left the carriageway, continuing through/over ornamental metal railings which were on top of a low retaining wall, and falling down a large drop to a lower road. He suffered serious head and spinal injuries. Personal representatives of the deceased continued his action for damages. The case was that the defendant, as highway authority responsible for the road, owed a common law duty of care to the deceased to ensure that railings were in place of sufficient strength and structural integrity to prevent a pedestrian or cyclist from falling over the retaining wall to the ground below. Although the defendant had included the wall and railings on its highway inspection regime, it denied liability.

The claimants’ submission amounted to a proposition that once a level of safety had been provided by a highway authority then a duty arose which meant that it had to be maintained.

The claim would be dismissed.

At common law a highway authority owed no duty to maintain the road or to make it safer. However, where a highway authority positively acted and created a trap or a danger which would not otherwise have existed it might be liable (see [39], [43] of the judgment).

On the facts, the deceased was going too fast for the conditions ahead of him. The railings were in place to prevent a pedestrian falling over what would otherwise be a very low wall. However the railings were not stated to be a crash barrier or restraint system. There was a world of difference between a pedestrian stumbling and putting an arm on railings to steady him/herself and the sort of considerable force in the instant accident. It could not be said that the relevant act by the defendant was the prevention of the fall if a cyclist crashed in to the railings at speed. The defendant was not under a duty to provide a crash barrier or to regard the railings as in effect a crash barrier (see [22],[27], [27], [49] of the judgment).

Stovin v Wise (Norfolk County Council, third party) [1996] 3 All ER 801 applied; Gorringe v Calderdale Metropolitan Borough Council [2004] All ER (D) 06 (Apr) 36

applied; Bird v Pearce (Somerset County Council third party) [1979] LS Gaz R 680 considered; Phelps v London Borough of Hillingdon, Anderton v Clwyd County Council, Jarvis v Hampshire County Council, Re G (a minor) [2000] All ER (D) 1076 considered.

Negligence – Causation AB v Chief Constable of X Constabulary [2015] EWHC 13 (QB) The claimant former undercover police officer within the defendant Chief Constable’s police force sought damages for psychiatric injury. The Chief Constable contended that the claimant’s adjustment disorder was attributable to his own misconduct in abusing cocaine. The Queen’s Bench Division, in dismissing the application, held that the chronic adjustment disorder from which the claimant suffered had been caused by the fact that he had been confronted with his own misconduct and that he had had to face the traumatic consequences of that.

The claimant former undercover police officer was a member of the defendant Chief Constable’s police force. He was deployed to another region and tasked with the obtaining of intelligence in relation to a serious organised criminal group. During the period of his deployment undercover on the operation, the claimant misused cocaine on more than one occasion and did not make any report at the time that he had done so. That failure made it inappropriate for him to continue as an undercover officer and he was subsequently granted ill-health retirement.

The claimant issued proceedings, seeking damages for psychiatric injury in the form of an adjustment disorder and consequential financial loss, which he said flowed from his having retired.

The Chief Constable claimed that any psychiatric injury which the claimant had suffered was attributable to his own misconduct in abusing cocaine and his sudden fall from grace when that had been discovered.

The application would be dismissed.

The chronic adjustment disorder from which the claimant suffered had been caused by the fact that he had been confronted with his own misconduct and that he had had to face the traumatic consequences of that. There was no evidence that he had been suffering from any mental disorder before that confrontation had occurred, but when it had occurred, it had been sufficient to account for and was the only explanation of the mental disorder which he had then suffered (see [16] of the judgment).

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Breach of Duty Altus Group (UK) Ltd v Baker Tilly Tax And Advisory Services LLP and another [2015] EWHC 12 (Ch) The claimant company brought proceedings against the defendant accountancy firm, contending that the defendant had been in breach of duty by failing to warn it about changes in the legislation. The claimant submitted that, had it been warned, it would have restructured itself.

The Chancery Division, in dismissing the claim, held that the defendant had been in breach of duty. As it had held itself out as being a ‘top-end’ and very large firm of specialist advisers, it was reasonably to be expected to have much greater technical resources than an ‘ordinary’ firm of accountants. However, the claimant would not have restructured itself as proposed.

The defendant was a large, ‘top-end’ accountancy firm. It provided advice to the claimant company. The claimant was part of a larger LLP structure. In December 2008, a Corporation Tax Bill was introduced in the House of Commons, which proposed a number of changes to the existing law. Among the proposed changes, at s 1263, was a plan to introduce the corporation tax regime already existing in the Income Tax (Trading and Other Income) Act 2005. The defendant did not advise the claimant as to the effects of the proposed legislative changes in 2009, at the time when the filing of the 2008 return was being carried out. In November 2011, the larger LLP structure, instructed the firm Ernst & Young (EY) to draw up a plan for dealing with the proposed legislative changes. EY proposed a new LLP structure (the new LLP proposal). In the event, the claimant decided not to impose the new LLP structure, because of administrative and practical concerns. The claimant brought proceedings against the defendant, claiming that it ought to have advised it as to the effect of the proposed legislative changes in 2009.

The issues were, among other things:

(i)

whether the defendant had been in breach of duty in failing to advise as

to the effect of s 1263 in January 2009; and

whether, if correctly advised in 2009, the claimant would have

(ii)

implemented a restructuring akin to the new LLP proposal. Consideration

was given to, among other things, the fact that up to mid-2010, the larger

LLP had had an arrangement with PricewaterhouseCoopers (PwC) to

provide tax services where required.

The claim would be dismissed.

38

(1)

The defendant had been in breach of duty in January 2009. Although the

defendant had not become aware of the impending legislative changes,

it ought to have become aware of them. It had been under a duty

to bring that information to the attention of the claimant, because it

had been material to the risks associated with the filing position for the

2008 return and it had undermined the filing position in respect of future

returns. The defendant had held itself out as being a ‘top-end’ and very

large firm of specialist advisers. It was reasonably to be expected to have

much greater technical resources than an ‘ordinary’ firm of accountants

and, as a result, to be aware of relevant impending changes to tax

legislation (see [76], [80], [82], [181] of the judgment).

Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a firm) [1978] 3 All ER 571 applied; Credit Lyonnais SA v Russell Jones & Walker (a firm) [2002] All ER (D) 19 (Jul) considered; Herrmann v Withers LLP [2012] All ER (D) 255 (May) considered; Mehjoo v Harben Barker (a firm) [2014] All ER (D) 13 (Apr) considered.

(2)

On the balance of probabilities, the claimant would not have consulted

EY in 2009. If the defendant had advised as it ought to have done, advice

would have been sought from a different adviser. The reasons given on

behalf of the claimant for taking another course were unpersuasive.

It was more probable that PwC would have been consulted. On the

balance of probabilities, the advice PwC would have given, if it had been

consulted, would not have been along the lines of the new LLP proposal.

Among other things, there was nothing obvious or axiomatic about the

new LLP proposal to suggest that it would be devised in the face of s 1263

when it had not been before (see [88], [90], [92] of the judgment).

Accordingly, those findings of fact meant that the claim had to fail (see [94] of the judgment).

Wisniewski v Central Manchester Health Authority [1998] PIQR P324 applied.

39

Damages in Contract Baxter v Barnes (trading as We Barnes Tree Surgeons and/or Up and Out Platform Hire) [2015] EWHC 54 (QB) Queen’s Bench Division The claimant, an arborist, hired a platform from the defendant in order to fell a tree. The platform collapsed and the claimant sustained serious injury. The claimant brought a claim in, inter alia, contract. The Queen’s Bench Division upheld the claim and ordered judgment for the claimant with damages to be assessed.

The claimant was an arborist and his business was concerned with many aspects of the care of trees including their pruning and felling. In order to complete a pruning job, the claimant hired a platform from the defendant who was a tree surgeon who had equipment for use in that business. The defendant offered customers the option of hiring out such equipment with an operator who would set up, and operate, the platform. However, the claimant did not choose to hire the platform with an operator. During use the platform overturned and the claimant was badly injured. He brought a claim in contract against the defendant. The claimant alleged that the accident occurred because the defendant was in breach of the implied term of the hire agreement that the platform was of satisfactory quality and reasonably fit for the purpose for which it was hired.

The defendant denied that the platform was defective and denied any breach of the implied conditions as to satisfactory quality and fitness for purpose. He contended that the platform toppled over because the claimant failed to position it on stable, level ground, contrary to instructions that the defendant alleged he had given to the claimant, when the platform was delivered to site, and contrary to the instructions set out in the manual provided with the platform.

The claim would be allowed.

The platform supplied to the claimant by the defendant had not been of satisfactory quality. The cause of the accident was the slippage of the foot of outrigger 3 upon its bearing plate. That slippage occurred because the plate was not of suitable quality for the application for which the plate was used. As a result of the findings, the claimant’s claim succeeded in contract. There would be judgment for the claimant with the quantum of damages to be assessed (see [92], [97], [98] of the judgment).

40

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Section 3 February 2015

Service of Proceedings Orb A.R.L. and others v Ruhan and others [2015] EWHC 262 (Comm) The proceedings concerned formal contracts, which had been executed in the form of a sale and purchase agreement and a headstay agreement between the parties. The claimants alleged that an oral agreement had been made in May 2003 between S, acting on behalf of the first and third claimants, the second claimant, acting on his own behalf and the defendant, R, acting on his own behalf, the object of which had been profit sharing between the first claimant, Orb, and R on a personal basis. In particular, R was to redevelop, restructure manage and/or dispose of assets within a hotel portfolio in order to maximise the financial benefit realised from such assets, and that he would pay a share of the net financial benefit to him realized from such activity to the claimants. A dispute arose following a payment of just under £92m derived from the sale of a company, Sentrum Holdings Ltd, which the claimants contended had been owned by the second proposed defendant, as nominee for R. The claimants contended that the relevant sums had been disbursed at R’s behest and for his benefit. They alleged that R had breached his fiduciary duty and that he had been dishonestly assisted in doing so. They further alleged knowing receipt on the part of the second to the fifth proposed defendants. They further brought proprietary tracing claims against the defendants. The defendants contended that the alleged oral agreement was unenforceable for illegality as it had been intended to deceive Morgan Stanley. The claimants sought permission to amend a claim form and particulars of claim, pursuant to CPR 17.1(3) and 19.4(1), and to add four further defendants in addition to the original defendant. They further sought permission to serve the prospective second to fifth defendants out of the jurisdiction and a proprietary injunction against those defendants with ancillary relief.

The issues for consideration were:

(i)

whether the application for amendment should be allowed; and

(ii)

whether service outside the jurisdiction and an injunction should be

allowed. Consideration was given to alleged recoveries made by

the claimants since having issued the claim and their alleged failure

42

to disclose to the court the value received for the disposal of some assets

for considerable sums as against the claim made.

The court ruled:

(1)

Permission to amend the amended claim form and the particulars

of claim to plead the additional facts relied on against R would be

granted (see [2], [58] of the judgment).

In relation to service out of the jurisdiction, there was a serious issue to

(2)

be tried in relation to the alleged oral agreement made, as contended

by the claimants, between S, acting on behalf of the first and third

claimants, the second claimant, and R. The defendants had powerful

points to make against the existence of any such agreement. It could

not be seen how a court could properly resolve the dispute without

hearing the evidence of the protagonists. On the evidence, the

claimants had recovered far more than any claim which they could

properly justify. Although the claimants might have realistic prospects

of success on the causes of action, the court should not countenance

permitting service out of the jurisdiction when full recovery had already

been made in respect of the claim for the profit shares alleged. However,

the failures, including to disclose to the court the value received for the

disposal of some assets for considerable sums as against the claim

made, stood out in the conduct of the proceedings by the claimants.

They went to the question of whether it was just and convenient to grant

the injunction and to the issue of ‘clean hands; on the party seeking

the injunction. The balance of convenience was wholly against the grant

of the injunctions in circumstances where the claimants appeared to have

made a substantial over recovery in respect of any wrong doing upon

which they had arguable prospects of success (see [4]-[6], [47], [49], [55],

[56] of the judgment).

Permission for service out of the jurisdiction on the second to fifth prospective defendants would be refused. No injunction would be granted (see [58] of the judgment)

43

Strike out- Abuse of Process Garnham v Millar and others [2015] EWHC 274 (Ch) The claimant had brought a claim against the defendants, which had been dismissed. He brought another claim, essentially based on similar allegations. The defendants applied to strike out the new claim and for a civil restraint order. The Chancery Division, in allowing the defendants’ application, held that the claim would be struck out as an abuse of process. Further, it was appropriate for an extended civil restraint order to be made.

The proceedings concerned a probate claim that had been brought following the death of the deceased. The parties to those proceedings included the claimant, G, and the deceased’s sister, B. B had issued proceedings (the 2009 proceedings) against G and his wife, seeking damages for false representations, which it was alleged G had made to B. The 2009 proceedings were compromised by a settlement, the terms of which were reflected in a Tomlin order. B subsequently died.

G applied to set aside the Tomlin order. That application was dismissed. G issued new proceedings (the 2012 proceedings) against the defendants, including B, the executors of her estate and a firm of solicitors. G asserted that the 2009 proceedings had been advanced and promoted by B and another by deliberate misconduct.

He alleged conspiracy to defraud, among other things, and claimed to be entitled to monetary relief in the sum of £1,378,731.07. The defendants applied for the 2012 proceedings to be struck out. Judgment was entered in their favour and G was ordered to pay their costs on the indemnity basis. Permission to appeal was refused.

G issued a new claim in 2014, which was essentially similar to his claim in the 2012 proceedings. It was contended that G had made some five claims or applications in respect of the defendants. The defendants applied, under CPR 3.4, for the new proceedings to be struck out and for a civil restraint order, under CPR 3.11. G accepted that his claims against the third and fourth defendants, the solicitors and the executors of B’s estate, could not be pursued.

The defendants submitted that the statement of case disclosed no reasonable grounds for bringing or defending the claim and that it was an abuse of process or otherwise likely to obstruct the just disposal of the proceedings.

The court ruled:

(1)

The present proceedings represented an abuse of the court’s process. On

any view, they involved a replay of matters on which G had already lost.

Whether or not the current particulars of claim could be said to

incorporate some cause of action that was not advanced in the 2012

44

proceedings, the two sets of proceedings covered very much the

same ground and were rooted in the same facts. The similarities

were evident. In all the circumstances, the present proceedings

involved unjust harassment of the defendants. Further, even if allowed to

go to trial, the proceedings would be bound to fail (see [27]-[29] of

the judgment) The claim would be struck out as against all the defendants. The claim would be recorded as being totally without merit (see [30] of the judgment).

Gleeson v J Wippell & Co Ltd [1977] 3 All ER 54 applied; Johnson v Gore Wood & Co (a firm) [2001] 1 All ER 481 applied; Secretary of State for Trade and Industry v Bairstow; Re Queen’s Moat House plc [2004] 4 All ER 325 applied; Aldi Stores Ltd v WSP London Ltd [2007] All ER (D) 433 (Nov) applied.

(2)

G had issued at least five claims or applications that were totally

without merit and, hence, had done so persistently. In all the

circumstances, it was appropriate for an extended civil restraint order to

be made (see [43] of the judgment) (see [40] of the judgment)

An extended civil restraint order would be made (see [43] of the judgment).

Lilley v Euromoney Institutional Investor plc [2014] EWHC 2364 (Ch) considered.

Discovery Rawlinson and Hunter Trustees SA (in its capacity as trustee of the Tchenguiz Discretionary Trust) v Director of the Serious Fraud Office and others [2015] EWHC 266 (Comm) Discovery – Production of documents. The proceedings concerned the property developer Vincent Tchenguiz, who had been investigated by the Serious Fraud Office (SFO). The claimant trustee of the Tchenguiz trust applied for permission to use certain documents disclosed in the main proceedings in a pending appeal a in separate proceedings in Guernsey. The Commercial Court dismissed the claimant’s application and allowed the SFO’s application for an order under CPR 31.22(2), in effect restoring the protection afforded under CPR 31.22(1) in respect of the relevant documents.

The proceedings concerned a fraud investigation against T, by the Serious Fraud Office (SFO). The main claims had been settled. The claimant (R&H) applied in its capacity as trustee of a discretionary trust, pursuant to CPR 32.12, for permission to use certain documents disclosed, and extracts of witness statements served, in the 45

main proceedings in a pending appeal in separate proceedings in Guernsey (the Guernsey proceedings). Those documents included: (i) 78 documents disclosed by the SFO in the main proceedings; (ii) witness statements served by the SFO in the main proceedings; (iii) notes of various meetings held between the SFO and an advisory firm, GT (the GT documents); and (iv)various reports (the GT reports). The court had refused previous similar applications to use documents generated by the SFO in the course of the criminal investigation concerning T. R&H issued a further application (the public domain application) seeking a declaration that some 26 documents were already in the public domain by virtue of the exception in CPR 31.22(1)(a) and were therefore not caught by any prohibition against collateral use.

The SFO cross-applied, under CPR 31.22(2), for an order re-imposing protection in respect of those documents.

The issues for consideration were:

(i)

whether the application should be struck out in whole or in part on the

basis that they were an abuse of process;

(ii)

if not, whether the application should be granted; and

(iii) whether the SFO’s application should be granted in respect of the 26

documents. The SFO contended that R&H’s applications should be

struck out where there had been delay and that the court had had to

deal with the applications on a piece-meal and fragmentary basis which,

in turn, had led to additional court time being used to the considerable

detriment of other court users.

The court ruled:

(1)

The court was very troubled by the repeated number of applications

that had been made by R&H in the present court, as well as the delay

in making such applications and the lateness of service of relevant

material in support of the applications. There was a strong argument for

dismissing the present applications as being an abuse of process or

simply to exclude a large amount of the material recently served on

behalf of R&H. However, having regard to all the circumstances, the court

would decide against taking such an extreme step (see [12] of the

judgment).

It followed that the applications would be dealt with on their merits (see [12] of the judgment).

46

(2)

The SFO was a public body and there was a continuing public interest that

the workings of Government should be open to scrutiny and criticism. The

burden lay firmly on the applicant to show special circumstances which

constituted a cogent reason for permitting collateral use. There was

a strong public interest in preserving the integrity of criminal investigations

and protecting those who provided information to prosecuting authorities

from any wider dissemination of that information, other than in the

resultant prosecution. The requirement imposed on a non-party to disclose

documents, pursuant to CPR 31.17, constituted or might constitute a

serious invasion or intrusion into that party’s privacy and confidentiality.

Such factors might constitute a relevant additional factor in the balancing

exercise which the court was required to perform under CPR 31.22 (see

[18], [21], [29] of the judgment).

In the present case, the burden had remained on R&H, under CPR 31.22, to persuade the court that there were special circumstances which constituted a cogent reason to justify the court making an order permitting the collateral use of documents. On the facts, R&H had failed to show special circumstances which constituted a cogent reason for permitting collateral use of any of the 78 documents. In respect of the witness statements, the balancing exercise came down against permitting collateral use of the extracts. In respect of the GT documents and reports, R&H had not met the burden, and the balancing exercise was against the grant of permission, under CPR 31.22 (see [35], [44], [60], [69] of the judgment).

The application under CPR 31.22(1) and CPR 32.12 would be refused. No order would be made to permit the collateral use of the 78 documents, the witness statements, the GT documents or the GT reports in the Guernsey Proceedings (see [40], [44], [60], [73] of the judgment).

Tchenguiz v Director of the Serious Fraud Office (HM Procureur for Guernsey) [2014] All ER (D) 14 (Nov) applied; Halcon International Inc v Shell Transport and Trading Co Ltd [1979] RPC 97 considered; Crest Homes plc v Marks [1987] AC 829 considered.

(3)

There were very good reasons for making an order under CPR 31.22(2) in

effect restoring the protection afforded under CPR 31.22(1) in respect of

the relevant documents. Among other things, the documents related to

the SFO’s criminal investigation and therefore engaged the strong public

interest against collateral use (see [88], [89] of the judgment).

The SFO’s application under CPR 31.22(2) would be granted. An order would be made under CPR 31.22(2) prohibiting the collateral use of the 26 documents (see [94], [95] of the judgment).

47

Scott (otherwise Morgan) v Scott [1911-13] All ER Rep 1 considered; Harman v Secretary of State for the Home Department [1983] 1 AC 280 considered; SmithKline Beecham Biologics SA v Connaught Laboratories Inc [1999] 4 All ER 498 considered; Lilly Icos Ltd v Pfizer Ltd [2002] 1 All ER 842 considered; NAB v Serco Ltd [2014] All ER (D) 144 (Apr) considered.

Summary Judgment Warner-Lambert Company, LLC v Actavis Group PTC EHF and others [2015] EWHC 223 (Pat) Practice – Summary judgment. The claimant company owned the patent for a drug. In earlier proceeding, its application for an interim injunction was dismissed on the basis that its infringement claim did not raise a serious issue to be tried.

The defendants applied for the claim to be struck out or for summary judgment dismissing the claim. The Patents Court held that the proper course was to establish the facts at a trial before attempting definitively to determine the law in respect of subjective intention in respect of the patent in question. Accordingly, summary judgment dismissing the claim was not appropriate.

The claimant company, W-L, owned the patent for a drug, Lyrica (pregabalin), which was also used for the treatment of pain. It brought a claim for patent infringement against the defendants, in respect of their alleged intended use of pregabalin medicine in the United Kingdom, under the trade mark ‘Lecaent’. In earlier proceedings (see[2015] All ER (D) 184 (Jan)), W-L’s application for an interim injunction was dismissed on the basis that its infringement claim did not raise a serious issue to be tried and that, even if it did, the balance of the risk of the injustice favoured refusal of the relief sought. The defendants (including Actavis) applied to strike out the claim for infringement of the patent, pursuant to CPR 3.4(2)(a).

Alternatively, they sought summary judgment dismissing that claim. W-L applied for permission to amend its particulars of claim to plead a case of ‘subjective intention’.

The issues for consideration were: (i) whether the particulars of claim or amended particulars of claim disclosed reasonable grounds for alleging subjective intention on the part of Actavis, in particular, whether Actavis intended Lecaent to be dispensed for treating pain; and (ii) whether the claim should be struck out.

The court ruled:

(1)

The particulars did not support the inference that Actavis intended Lecaent to be dispensed for treating pain. Accordingly, the amended

48

particulars of infringement did not disclose reasonable grounds for alleging subjective intention on Actavis’ part (see [31] of the judgment).

Three Rivers District Council v Bank of England [2000] 3 All ER 1 considered.

(2)

Although the amended particulars of infringement did not disclose

reasonable grounds for alleging subjective intention on the part of

Actavis, and subjective intention was required, that did not mean that

the claim was bound to fail. The court might be wrong about the requisite

mental element. In any event, it was a developing area of the law and

therefore the proper course was to establish the facts at a trial before

attempting definitively to determine the law. That was particularly so given

that the issue was one which was likely to be suitable for consideration

not merely by the Court of Appeal, but also by the Supreme Court (see

[60] of the judgment).

Summary judgment dismissing the claim would not be granted (see [60] of the judgment).

Indemnity Costs Siegel v Pummell [2015] EWHC 195 (QB) Costs – Orders for costs. Following judgment in his favour (see [2014] All ER (D) 196 (Dec)), the claimant sought indemnity costs and costs reserved against the defendant. The Queen’s Bench Division held that the conduct of the defendant’s expert, requiring the recall of the claimant’s expert, had been so out of the norm that it justified an order for indemnity costs with respect to the costs of the recall. Further, the costs reserved should reflect the outcome of the litigation and would be awarded to the claimant.

In December 2014, judgment was entered for the claimant against the defendant (see [2014] All ER (D) 196 (Dec)). The order provided that the defendant should pay the claimant’s costs on the standard basis, to be assessed if not agreed. The present proceedings concerned the claimant’s application for indemnity costs from the date the defendant’s allegedly inappropriate conduct began and costs reserved, concerning an application which had resulted in orders dispensing with a joint statement.

The claimant alleged that the defendant had engaged in inappropriate conduct by: (i) personal attacks against his medical legal experts; (ii) the experts’ inability to reach agreement on a joint statement; (iii) making allegations of dishonesty

49

against him without having properly pleaded them and without proper evidence to do so; (iv) serving late evidence and late witness statements in unsatisfactory circumstances; and (v) the fact that he had had to recall his expert to deal with the new basis upon which the defendant’s expert had presented his evidence.

The court ruled: The complaints concerning the personal attack against the claimant’s medical legal experts, the joint statement process, the improper allegations of dishonesty and the serving of evidence did not justify the award of costs on an indemnity basis.

However, the conduct of the defendant’s expert had been so out of the norm that it justified an order for indemnity costs. The costs of the recall of the claimant’s expert, occasioned by the defendant’s expert would be awarded on an indemnity basis. The costs reserved should reflect the outcome of the litigation and would be awarded to the claimant (see [20], [22], [27], [36], [38]-[40] of the judgment).

Kiam v MGN Ltd (No 2) [2002] All ER (D) 65 (Feb) considered; Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hamer Aspden & Johnson (a firm) [2002] All ER (D) 39 (Jun) considered.

Costs Simpson v MGN Ltd [2015] EWHC 126 (QB) Practice – Pre-trial or post-judgment relief. Following the hearing of a preliminary issue in a defamation case in which the claimant was successful, the defendant submitted that the claimant should not be award any costs at all or alternatively that it should be reduced on the basis that a master had already set a cost budget which had not included the preliminary issue and that the claimant had failed to serve a costs schedule on the defendant. The Queen’s Bench Division held that there was good reason to depart from the costs budget however there would be a deduction to reflect the claimant’s failures.

In a defamation case with a preliminary issue regarding the meaning of the words complained of, the court heard the claimant’s application to strike out the defendant’s plea of justification, and the defendant’s cross-application for permission to amend that plea. The court went on to decide the preliminary issue of what the defamatory meanings were (see [2015] All ER (D) 155 (Jan)). It struck out the plea of justification and refused permission to amend. The claimant applied for an order for costs in the sum of £24,096.20 inclusive of VAT, as set out in a statement of costs dated 16 January 2015 which had been filed with the court.

50

The defendant submitted that the court should not award the claimant any costs at all. Alternatively, quantum should be reduced as: (i) the claimant’s approved costs budget (approved by a master in a case management conference) had not included any sum in respect of the costs of the applications which were determined, and there was no good reason to depart from the budget (the costs budget point); and (ii) the claimant had failed to serve a costs schedule on the defendant, with the consequence that no costs order should be made, if it otherwise would be. Alternatively, that failure should be reflected in the court’s approach to what order as to costs should be made (the costs statement point). What had in fact happened was that the claimant had budgeted for a possible preliminary issue before the CMC. Although the master had reached no conclusion on that figure, he had not disapproved. The claimant did submit a revised budget for agreement, albeit prompted by the defendant to do so. It did so within three weeks of issuing its application and some six weeks before the hearing. The defendant’s solicitors failed to respond.

The defendant submitted that there had previously been an approved costs budget for the claimant and since that budget had included no provision for the preliminary issue it followed that there should be no costs order in favour of the claimant.

Consideration was given to CPR 3.18(a) which focused attention on budgets for phases of the litigation.

The court ruled: If costs management was to work, conclusions reached upon reviewing costs budgets had to be adhered to, and not second-guessed at a later stage. The wording of CPR 3.18(a) focused attention on budgets for phases of the litigation.

It was clear from CPR 3.18(b) that if a figure had been agreed or approved for a particular phase of proceedings the amount recoverable by the receiving party in respect of that phase would be capped at that figure, unless there was good reason to depart upwards. If significant developments took place which increased the cost of a phase, or added an element of cost, a revised figure should be discussed, and if not agreed submitted for approval, if time allowed. Equally, if a party’s budget for a particular phase had been reviewed and assessed at nil, there would need to be good reason to award any costs at all (see [19] of the judgment).

The application of the wording of CPR 3.18(b) was not so straightforward in the circumstances of the case and on the facts, there was good reason to depart from the budget approved by the master for this phase of the litigation, by allowing recovery of some costs by the claimant. It was true that the claimant had failed to submit a revised budget, as required, for the court’s approval prior to the

51

hearing. However, having regard to the wording of CPR 31.18 what the defendant sought by way of a sanction for that failure, was that the claimant’s recoverable costs of success on the applications should be assessed at nil. That was not a sanction prescribed by the Practice Direction or the rule. That would be unjustly disproportionate and not sufficiently justified by the overriding objective, the need to enforce compliance with rules, practice directions or orders, or any of the other specific aims listed in CPR 1.1(2). In reaching that conclusion the court was influenced by several circumstantial factors (see [22] of the judgment). Taking the instant approach involved a sanction for the claimant’s failure to comply with the Practice Direction which was just and proportionate in the circumstances of the case, and one which in more general terms provided a sufficient incentive to parties to comply. That approach involved an assessment which made every assumption against the party which had failed to submit an amended budget, and properly compensated the defendant for the additional costs involved (see [20], [21] of the judgment).

The claimant should recover 90% of the costs which would have been approved as reasonable had the claimant submitted his budget for approval in advance of the hearing, assessed on the assumption that the Master would have taken the most parsimonious approach possible within the bounds of what is reasonable; less a deduction to reflect the fact that the claimant’s failures caused the defendant to incur additional costs, beyond those it would have incurred if the claimant had sought and obtained prior approval from the Master (see [3] of the judgment).

ATE Legal Expense Insuranc McGraddie and another [2015] UKSC 1 Abstract Costs – Order for costs. Following his successful appeal (see [2013] All ER (D) 384 (Jul)), the claimant sought an order that the Scottish Legal Aid Board (the Board) pay his expenses, including his after the event insurance (ATE) premium. The Supreme Court held that, absent agreement or a specific statutory sanction to the contrary, a successful party to litigation could not recover an ATE premium, however reasonably incurred, as part of his costs or expenses of legal proceedings. Accordingly, the claimant would be awarded his expenses of the appeals to the Extra Division of the Inner House and to the court against the Board, but not the ATE premium.

Digest The judgment is available at: [2015] UKSC 1

52

The court previously allowed the claimant’s appeal against the decision of the Extra Division of the Inner House (see 2012 Scot (D) 22/4) and reinstated the Lord Ordinary’s decision (see [2009] CSOH 142) in his favour (see [2013] All ER (D) 384 (Jul)). The defendants were legally aided in the Inner House and in the Supreme Court, but the claimant was not. Accordingly, the claimant sought an order that the Scottish Legal Aid Board (the Board) pay his expenses, pursuant to s 19(1) of the Legal Aid (Scotland) Act 1986.

The claimant submitted that his £40,000 after the event insurance (ATE) premium should be recoverable as part of his expenses. The Board contended that the ATE premium was not an item of expenses or costs which was recoverable.

The court ruled: As a matter of principle, in the light of the terms of the relevant court rules and on the basis of consistent judicial authority from England and Scotland, the law was clear. In the absence of agreement or a specific statutory sanction, either expressly or through valid delegated legislation, to the contrary, a successful party to litigation could not recover an ATE premium, however reasonable it had been to have incurred it, as part of his costs or expenses of legal proceedings (see [19] of the judgment).

The claimant would be awarded his expenses of the appeals to the Inner House and to the court in the proceedings against the Board. However, those expenses would not include the ATE premium of £40,000 paid by the claimant (see [22] of the judgment).

Callery v Gray, Russell v Pal Pak Corrugated Ltd [2001] 3 All ER 833 considered; Callery v Gray [2001] 4 All ER 1 considered; Callery v Gray [2002] 3 All ER 417 considered; McNair’s Executrix v Wrights Insulation Co Ltd 2003 Scot (D) 19/10 considered.

Negligence Coope and others v Ward and another [2015] EWCA Civ 30 Negligence – Duty to take care. A wall dividing the claimants’ and the defendants’ gardens collapsed. The claimants brought proceedings. The judge ordered, inter alia, that the parties owed to each other a measured duty of care in respect of the consequences attendant upon the collapse of the wall and that, in respect of any engineering or other solution which might be devised to deal with the consequences, the contribution of the defendants was to be a rateable proportion of the cost of such

53

solution. The Court of Appeal, Civil Division, in allowing the defendants’ appeal, held that, in the circumstances, the judge had been entitled to have found that there had been measured duties of care on both sides, but it had not been just and reasonable to have imposed on the defendants a liability to contribute to the cost of some unspecified engineering solution.

Digest The judgment is available at: [2015] EWCA Civ 30 The first and second defendants owned a property, 62 Armstead Road. The claimants owned another property, 41 Orchard Lane. About one third of the back garden of 62 Armstead Road abutted the back garden of 41 Orchard Lane. At the end of the gardens of the Armstead Road houses there was a wall, part of which divided 41 Orchard Lane from numbers 58, 60 and 62 Armstead Road. In 2010, after heavy snowfall with snow accumulating on the ground, part of the boundary wall collapsed into the gardens of 60 and 62 Armstead Road. The claimants brought proceedings against the defendants. The judge found, inter alia, that: (i) the cause of the collapse of the wall had been the additional loading on the wall (on the Orchard Lane side) as the depth of earth behind it increased from four feet to nine feet; (ii) the trigger of the collapse had been the loading by the snowfall; and (iii) the claimants were not responsible for the addition of the loading against the wall and were not liable in nuisance. The judge made an order which declared, inter alia, that the parties owed to each other a measured duty of care in respect of the consequences attendant upon the collapse of the boundary wall and that, in respect of any engineering or other solution which might be devised to deal with the consequences attendant upon the collapse of the wall, the contribution of the defendants was to be a rateable proportion of the cost of such solution and, in any event, such contribution was not to exceed the cost of providing a wall capable of retaining land to a depth of four feet along the length of that part of the collapsed wall. The defendants appealed.

The issues before the court were, first, whether the defendants owed to the claimants a measured duty of care which, in certain circumstances, might arise as between adjoining landowners in respect of a hazard arising on their land without their fault. The court considered Duke of Westminster and others v Guild([1984] 3 All ER 144) (Duke of Westminster). Second, the extent of any such duty and, in particular, whether it had been reasonable to require the defendants to contribute to the cost of reconstruction.

The appeal would be allowed.

54

(1)

Whether such a duty of care existed was to be determined by the law

of negligence, not the law of property, and it was plain that such a duty

could exist where no question of easement arose. The fact that tortious

principles led to a liability when principles of property law would not

did not render the law incoherent. The Duke of Westminster did not

preclude the existence of any duty of care relating to lack of support (see

[37], [38], [90], [91] of the judgment).

The essence of the situation was that, after the collapse, there had been, on account of the defective condition of both properties, a real risk that damage would be done to both of them by the claimants’ land falling on that of the defendants, even if nothing was done, as well as if steps were taken to clear up the collapse that had already occurred. In those circumstances, the judge had been entitled to have found that there had been measured duties of care on both sides. At the very lowest, the defendants would be obliged to allow access to their land to enable the claimants to carry out any work that might be necessary to shore up their land or protect it from further falling (see [52], [53], [90], [91] of the judgment).

Goldman v Hargrave [1966] 2 All ER 989 considered; Leakey v National Trust for Places of Historic Interest or Natural Beauty [1980] 1 All ER 17 considered; Westminster (Duke) v Guild [1984] 3 All ER 144 considered; Holbeck Hall Hotel Ltd v Scarborough Borough Council [2000] 2 All ER 705 considered; Abbahall Ltd v Smee [2002] All ER (D) 323 (Dec) considered.

(2)

It had not been just and reasonable to have imposed on the defendants

a liability to contribute to the cost of some unspecified engineering

solution. First, the cause of the collapse had been the overloading of 41

Orchard Lane over the years. Prima facie, it did not seem reasonable to

require the defendants to pay for what had been neither their fault nor

within their control. Second, it was unreasonable to require a contribution

to a solution which was entirely unspecified. Thirdly, there were a number

of difficulties with the judge having thought that a fair, reasonable and

just result had been reached by the limitation on what had been required

of the defendants to the cost of providing a wall capable of retaining

land to a depth of four feet. However, that did not mean that the

defendants could have no obligations on account of a measured duty of

care towards the claimants (see [75], [76], [78], [80]-[84], [90], [91] of the

judgment).

55

Section 4 March 2015

ATE Legal Expense Insurance McGraddie v McGraddie and another[2015] UKSC 1 The court previously allowed the claimant’s appeal against the decision of the Extra Division of the Inner House (see 2012 Scot (D) 22/4) and reinstated the Lord Ordinary’s decision (see [2009] CSOH 142) in his favour (see [2013] All ER (D) 384 (Jul)). The defendants were legally aided in the Inner House and in the Supreme Court, but the claimant was not. Accordingly, the claimant sought an order that the Scottish Legal Aid Board (the Board) pay his expenses, pursuant to s 19(1) of the Legal Aid (Scotland) Act 1986.

The claimant submitted that his £40,000 after the event insurance (ATE) premium should be recoverable as part of his expenses. The Board contended that the ATE premium was not an item of expenses or costs which was recoverable.

The court ruled: As a matter of principle, in the light of the terms of the relevant court rules and on the basis of consistent judicial authority from England and Scotland, the law was clear. In the absence of agreement or a specific statutory sanction, either expressly or through valid delegated legislation, to the contrary, a successful party to litigation could not recover an ATE premium, however reasonable it had been to have incurred it, as part of his costs or expenses of legal proceedings (see [19] of the judgment).

The claimant would be awarded his expenses of the appeals to the Inner House and to the court in the proceedings against the Board. However, those expenses would not include the ATE premium of £40,000 paid by the claimant (see [22] of the judgment).

Callery v Gray, Russell v Pal Pak Corrugated Ltd [2001] 3 All ER 833 considered; Callery v Gray [2001] 4 All ER 1 considered; Callery v Gray [2002] 3 All ER 417 considered; McNair’s Executrix v Wrights Insulation Co Ltd 2003 Scot (D) 19/10 considered.

56

Negligence Coope and others v Ward and another [2015] EWCA Civ 30 The first and second defendants owned a property, 62 Armstead Road. The claimants owned another property, 41 Orchard Lane. About one third of the back garden of 62 Armstead Road abutted the back garden of 41 Orchard Lane. At the end of the gardens of the Armstead Road houses there was a wall, part of which divided 41 Orchard Lane from numbers 58, 60 and 62 Armstead Road. In 2010, after heavy snowfall with snow accumulating on the ground, part of the boundary wall collapsed into the gardens of 60 and 62 Armstead Road. The claimants brought proceedings against the defendants. The judge found, inter alia, that: (i) the cause of the collapse of the wall had been the additional loading on the wall (on the Orchard Lane side) as the depth of earth behind it increased from four feet to nine feet; (ii) the trigger of the collapse had been the loading by the snowfall; and (iii) the claimants were not responsible for the addition of the loading against the wall and were not liable in nuisance. The judge made an order which declared, inter alia, that the parties owed to each other a measured duty of care in respect of the consequences attendant upon the collapse of the boundary wall and that, in respect of any engineering or other solution which might be devised to deal with the consequences attendant upon the collapse of the wall, the contribution of the defendants was to be a rateable proportion of the cost of such solution and, in any event, such contribution was not to exceed the cost of providing a wall capable of retaining land to a depth of four feet along the length of that part of the collapsed wall.

The defendants appealed.

The issues before the court were, first, whether the defendants owed to the claimants a measured duty of care which, in certain circumstances, might arise as between adjoining landowners in respect of a hazard arising on their land without their fault. The court considered Duke of Westminster and others v Guild([1984] 3 All ER 144) (Duke of Westminster). Second, the extent of any such duty and, in particular, whether it had been reasonable to require the defendants to contribute to the cost of reconstruction.

The appeal would be allowed.

(1)

Whether such a duty of care existed was to be determined by the law

of negligence, not the law of property, and it was plain that such a duty

could exist where no question of easement arose. The fact that tortious

principles led to a liability when principles of property law would not

57

did not render the law incoherent. The Duke of Westminster did not

preclude the existence of any duty of care relating to lack of support (see

[37], [38], [90], [91] of the judgment).

The essence of the situation was that, after the collapse, there had

been, on account of the defective condition of both properties, a

real risk that damage would be done to both of them by the

claimants’ land falling on that of the defendants, even if nothing was

done, as well as if steps were taken to clear up the collapse that had

already occurred. In those circumstances, the judge had been entitled to

have found that there had been measured duties of care on both sides.

At the very lowest, the defendants would be obliged to allow access to

their land to enable the claimants to carry out any work that might be

necessary to shore up their land or protect it from further falling (see [52],

[53], [90], [91] of the judgment).

Goldman v Hargrave [1966] 2 All ER 989 considered; Leakey v National

Trust for Places of Historic Interest or Natural Beauty [1980] 1 All ER 17

considered; Westminster (Duke) v Guild [1984] 3 All ER 144 considered;

Holbeck Hall Hotel Ltd v Scarborough Borough Council [2000] 2 All ER 705

considered; Abbahall Ltd v Smee [2002] All ER (D) 323 (Dec) considered.

It had not been just and reasonable to have imposed on the defendants

(2)

a liability to contribute to the cost of some unspecified engineering

solution. First, the cause of the collapse had been the overloading of 41

Orchard Lane over the years. Prima facie, it did not seem reasonable to

require the defendants to pay for what had been neither their fault nor

within their control. Second, it was unreasonable to require a contribution

to a solution which was entirely unspecified. Thirdly, there were a number

of difficulties with the judge having thought that a fair, reasonable and

just result had been reached by the limitation on what had been required

of the defendants to the cost of providing a wall capable of retaining

land to a depth of four feet. However, that did not mean that the

defendants could have no obligations on account of a measured duty of

care towards the claimants (see [75], [76], [78], [80]-[84], [90], [91] of

the judgment).

58

Costs Cockell (trading as Cockell Building Services) v Holton and others[2015] All ER (D) 67 (Mar) The claimant, SC, carried out repairs at the defendant’s home. He brought proceedings against the defendant, H, for sums that he claimed were due to him in respect of the work. H counterclaimed, contending that the work had been defectively done. H alleged that he had discovered that, among other things, SC had overcharged him, that SC was an undischarged bankrupt and that he was not a sole trader and in fact traded with his father, KC. In the course of proceedings, SC alleged that he had signed an admission that he had been overpaid by H under duress, and that, among other things, H had threatened to kidnap the children of his partner. The proceedings involved both a disclosure application and a preliminary issue. In January 2015, H applied for permission to discontinue his claim against KC, but on the basis that SC and KC should pay all the costs of pursuing the claim against KC. KC and SC agreed that the claim against KC should be discontinued, but they opposed the application in relation to costs.

Both SC and KC submitted that they should have their costs paid by H. More specifically, KC sought his costs of

(i)

the disclosure application, in respect of which the costs had been

reserved, to be paid on an indemnity basis; and

the costs of the action against him. SC sought his costs of the discontinued

(ii)

claim against KC, including the costs of the preliminary issue, and his costs

of the disclosure application.

The court ruled:

(1)

On the evidence, the disclosure application had been a fishing

expedition. It had yielded nothing, but had to have involved KC and SC

in considerable time and expense. Both KC and SC were entitled to their

costs of that application, to be paid on the indemnity basis (see [58], [60]

of the judgment).

A claimant who discontinued his claim had to show that there was a

(2)

good reason for disapplying the presumption that he should pay the costs

of the claim. A simple re-evaluation of the legal or commercial merits

of the claim was not sufficient to displace the presumption. The claimant

needed to show a change of circumstances since the claim was made

that justified him in withdrawing it. It was implicit in that that the claim

59

had been properly and reasonably brought in the first place. If the claim

had never been viable from the outset, no amount of changes in

circumstances could save the claimant from the liability to pay the costs

on discontinuance (see [61], [62] of the judgment).

In the present case, the claim had not been viable from the outset. KC was entitled to his costs of the claim against him on an indemnity basis (see [62], [64] of the judgment).

(3)

In the circumstances, SC would be entitled to recover from H the costs

that he had incurred in relation to the allegation that there had been a

partnership between him and his father, although those costs would not

be awarded on the indemnity basis (see [66] of the judgment).

Relief from Sanctions Davis Solicitors LLP v Raja and another[2015] All ER (D) 75 (Mar) The claimant solicitors’ firm brought proceedings against the defendants in respect of an unpaid invoice. The defendants defended the claim and counterclaimed for damages for consequential losses incurred as a result of the alleged breach of duty and negligence of the claimant. The claimant was ordered to pay the defendants damages and their costs. The claimant sought permission to appeal.

The court ordered that, unless the claimant served a skeleton argument and lodged an appeal bundle by a specified date, the appeal was to be struck out (the unless order). A skeleton argument was served, but the claimant failed to lodge an appeal bundle, as required by the unless order or otherwise in accordance with CPR Practice Direction 52B.6 (PD 52B). Consequently, the appeal was struck out.

The claimant applied for relief from sanctions, under CPR 3.9. The judge refused the application. In so ordering, he held that no appellant’s bundle had been filed, and it had still not been, such that the court was at a disadvantage, and that was not a trivial breach. The judge further considered that the merits of the appeal did not seem to be very strong.

The claimant appealed.

It submitted that: (i) the failure to file an appeal bundle had not been a significant breach of PD 52B because all relevant documents had been served on the defendants and it had complied with all court orders in every other respect; (ii) but for the defendants’ solicitors having sent a letter to the court, contending that it had not complied with the unless order, its appeal would not have been struck out and

60

the defendants’ action in that regard had been ‘opportunistic’, because they had had the trial bundles; and (iii) the judge had erred in having considered the merits of the appeal.

The appeal would be dismissed.

(1)

The claimant’s submission that the breach had not been significant

was rejected. Not only had the claimant failed to comply with PD

52B, but it had ignored the unless order relating to the lodging of an

appeal bundle. The judge had described the breach as not having been

a trivial breach. However, given previous authority, the focus of the inquiry

at the first stage should have been on whether on the breach had been

serious or significant. In the circumstances, the breach in the present case

had been serious and significant. Further, no explanation the claimant had

given as to why the default had occurred constituted a good reason (see

[26], [32], [33] of the judgment).

The claimant’s submission that the defendants had, by their solicitors’

(2)

letter which brought to the court’s attention the claimant’s breach of

PD 52B, acted opportunistically and unreasonably because they had had

the trial bundles was rejected. That letter had been written after the unless

order had been made and after the point when the appeal had been, at

least arguably, automatically struck out. In any event, the recitals to the

order striking out the appeal made clear that the court, in having made

that order, had not relied on the letter alone (see [31] of the judgment).

Having considered all the circumstances of the case, as CPR 3.9(1)

(3)

required, the judge had been entitled to have had regard to the merits

of the underlying appeal. He had plainly been entitled to have formed

the view that the merits of the appeal did not seem to be very strong.

The judge had also been entitled to have had regard to the fact, as he

had, that, even by the time of the hearing before him, more than five

months after the date by which the appeal bundle should have been

filed, the claimant had been in continuing breach of PD 52B (see [34], [35]

of the judgment).

61

Costs Budget CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd and others[2015] All ER (D) 86 (Mar) The claimant owned a large development. There were defects alleged in the works and it brought a claim against the defendant contractor for the costs of remedial works. The claim was said to be worth approximately £18m, but that was hotly contested. Prior to the first case management conference, the claimant had filed a case management information sheet. That stated that the estimated total costs for the case on the part of the claimant were approximately £3.4m. However, by the time of the present proceedings, the claimant claimed that its total costs were over £9.2m, comprising approximately £4.2m incurred costs and approximately £5m estimated costs. During an earlier case management conference, there was a major dispute as to cost budgets, as a result of the claimant’s novel argument that, because of the relatively high value of the claim, the court did not have the discretion to consider making any cost management orders at all. The judge ruled against the claimant on that issue (see [2014] All ER (D) 343 (Oct)). The present proceedings followed on from that ruling and were convened to determine the claimant’s cost budget, in respect of which all the other parties had made extensive and sustained criticisms.

The issues for the determination of the court included whether the claimant’s costs budget was reliable, proportionate and reasonable. In light of the conclusions on those points, the court considered what action to take. The court considered CPR 44.3(5).

The court ruled: In the circumstances, the claimant’s cost budget was a wholly unreliable document.

The deliberate absence of any explanation for the huge increase in the costs incurred and estimated, and the schedule of assumptions, which could only have been designed to give the claimant’s legal team the maximum room for manoeuvre later on, led to the conclusion that the claimant’s cost budget had been deliberately manipulated. By reference to CPR 44.3(5) and previous authority, the claimant’s costs, both incurred and estimated, were disproportionate to the complexity and value of the claim. They bore no relation to what was required to be spent to advance the case in a proportionate way. There was no reason, and no reason had been put forward, why the claimant’s overall costs figures should not be similar to that of the defendant. If anything, it should be less, because the defendant would be doing most of the work in preparing for and running the trial. The figures the claimant had put forward were plainly disproportionate. As to reasonableness,

62

in all the circumstances, and having rejected the points put forward by the claims as explaining the gross disparity in costs, the claimant’s costs budget set out figures which were wholly unreasonable and unjustified (see [1], [35], [45], [54], [82] of the judgment).

In the circumstances, the court proposed to identify and set out, in a cost management order, the various figures it had identified as reasonable, but the precise nature of the order would be tailored to the phase of the costs in question. In that way, going forward, the assessed costs/costs budget for the claimant would be total of ÂŁ4.28m, made up of the figures considered to be recoverable on assessment in respect of the costs said to have been incurred, and the approved budget figures in respect of the estimated costs. The estimated costs fell to be reduced, pound for pound, to the extent that the amounts actually recovered on assessment in respect of costs incurred were higher than the figures indicated (see [97], [98] of the judgment).

Costs- Refusal to engage in ADR Laporte and another v Commissioner of Police of the Metropolis[2015] All ER (D) 232 (Feb) The claimants had lost the main proceedings for reasons set out in the judgment to be found at Laporte and another v The Commissioner of the Police of the Metropolis[2014] All ER (D) 11 (Nov). They asserted, however, that there should be no order for costs because the defendant refused to engage in ADR. In response, the defendant not only sought an award of costs against the claimants but contended that they should be assessed on an indemnity basis and that a payment on account of ÂŁ100,000 should be made.

The issue was whether and to what extent the claimants were entitled to their costs.

The court ruled: It was established law that although the potential benefits of ADR were recognised by the court, ultimately the court had no power to order parties to engage in it.

Robust encouragement might well be appropriate. Compulsion was not. In deciding whether to deprive a successful party of some or all of his costs on the grounds that he had refused to agree to ADR, it had to be borne in mind that such an order was an exception to the general rule that costs should follow the event. The burden was on the unsuccessful party to show why there should be a departure from the general rule. The fundamental principle was that such departure was not justified unless it was

63

shown (the burden being on the unsuccessful party) that the successful party acted unreasonably in refusing to agree to ADR. Certain factors fell to be considered when addressing the issue as to whether or not a refusal to agree to ADR was to be regarded as having been unreasonable:

(i)

the nature of the dispute;

(ii)

the merits of the case;

(iii) the extent to which other settlement methods had been attempted;

(iv) whether the costs of the ADR would be disproportionately high;

(v) whether any delay in setting up and attending the ADR would have

been prejudicial; and

whether the ADR had a reasonable prospect of success

(v)

Having considered each of the factors and having regard to other circumstances and arguments raised the defendant failed, without adequate (or adequately articulated) justification to engage in ADR which had a reasonable prospect of success. That would therefore, impact on the exercise of the court’s discretion as to costs (see [60] of the judgment).

The scale of the defendant’s shortcomings in the context of his failure to engage with ADR was not such as to justify dis entitling him from claiming any of his costs. He had ultimately won on every substantive issue and, although ADR made settlement a sufficiently likely possibility, it would have been by no means certain. Exercising the broad discretion afforded by the rules the court awarded the defendant two thirds of his costs against the claimants to be assessed on the standard basis (see [66]-[68] of the judgment).

64

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Section 5 April 2015

Darby v Richmond upon Thames London Borough Council [2015] All ER (D) 48 (Apr) In April 2010, L was diagnosed as suffering with acute myeloid leukaemia. As a result of the treatment he underwent, he was at significant risk of suffering infections which could be fatal. L was discharged from hospital to the home of his mother, the claimant, where his sister and her baby also lived. In August, L’s general practitioner wrote to the defendant, the local housing authority for the area in which L was resident for the purposes of the Housing Act 1996, asking that L be re-housed because his health was at risk while he was living with his sister and her baby. The authority’s housing allocation policy provided that a maximum of 200 points could be awarded for ‘persons whose condition is life threatening and their existing accommodation is undermining their health’. In September, L made a formal application for housing.

In December, the authority informed L that his application had been approved, but that did not mean that he would be re-housed in the near future. He was told that he had been awarded only 50 points for medical needs. Later that month, L’s sister and baby were both seen by the GP and found to have infections. In January 2011, L was admitted to hospital with respiratory sepsis. He remained in hospital until his death from influenza later that month. The claimant, as administratrix of L’s estate, brought proceedings against the authority. The authority applied for summary judgment or, alternatively, to strike out the claim.

The authority contended that it was settled law that it owed no common law duty of care in respect of the exercise of its statutory function of allocating social housing and, in the circumstances, the claim had no real prospect of success.

The court ruled: It was clear from previous authority that, where a public authority was required or empowered to apply a statutory scheme, it did not enter into an assumption of responsibility to a person assisted under that scheme. Where such persons were entitled to exercise remedies conferred by the statutory scheme, such as the right of review or appeal, or under the general law, such as judicial review or an application to the Local Government’s Ombudsman, the imposition of a duty of

66

care would generally be inconsistent with the statutory scheme. The Act, taken in conjunction with the right to seek judicial review, with, in appropriate circumstances, the opportunity to apply for interim relief, coupled with the ability to refer maladministration to the Ombudsman, provided a sufficiently comprehensive set of remedies to lead to the conclusion that a duty of care would be inconsistent with the statutory scheme (see [20], [24] of the judgment).

The present case was simply one of the authority implementing a statutory scheme and there was no reason why the court could not deal with the strike out application at the present stage. The principal difficulty which the claimant faced was that her essential complaint was that the authority had not been exercising its statutory duties and powers properly which, previous authority showed, was not sufficient to give rise to a duty of care and the provision of the information relating to the health of L was insufficient to give rise to the duty of care sought to be relied on.

Therefore, the claimant’s claim was bound to fail and the statement of case would be struck out as having disclosed no reasonable grounds for bringing the claim and, in the alternative, summary judgment would be given against the claimant on the whole of the claim, on the basis that the claimant had no real prospect of succeeding on the claim (see [19], [26], [27] of the judgment).

Summary Judgment Bruce v TTA Management Ltd and others [2015] All ER (D) 24 (Apr) The claimant held shares in a company (the company) which, under a management agreement, provided, among other things, services to the first defendant company.

He brought proceedings, in which he contended that his shares in the company had been undervalued by an expert valuer as the result of fraudulent acts by the defendants, in particular, their fraudulent misstatement of financial and trading particulars to the expert. The defendants applied to strike out the claim. The chief master held that, among other things, the management agreement was not judiciable. He make an order striking out the claim under CPR 3.4(2)(a) or, alternatively, giving judgment for the defendants pursuant to CPR 24.2.

The claimant appealed.

The court considered, first, whether the chief master had erred in striking out the claim on the ground that it did not disclose a reasonable ground for bringing the claim. Consideration was given to the pleading of the claims for breach of contract, misrepresentation and conspiracy. Secondly, whether the chief master had erred in holding that the claim had no real prospect of success.

67

The court ruled:

(1)

The fault of the claims was not that they had failed to plead sufficient

facts. Instead, they were too comprehensive and not sufficiently

particular. On the evidence, the claims for breach of contract and

misrepresentation had been properly pleaded. However, the conspiracy

claim had not been properly pleaded. The simple allegation that the

defendants had conspired to injure the claimant by breach of contract

and fraudulent misrepresentation was too broad and left too much room

to manoeuvre. However, it could be corrected by amendment (see [18]

of the judgment).

The chief master had erred in finding that the claimant’s statement of case did not disclose a reasonable ground for bringing the claim (see [24] of the judgment).

(2)

On the evidence, the chief master had not erred in finding that the

management agreement was not justiciable by the court. On its true

construction, the claim for breach of contract depended on establishing

whether the submitted data had been false and what the true data

had been. That in turn depended on the true construction of the

management agreement, which was not justiciable. The chief master

had not erred in entering summary judgment against the claimant on

the breach of contract claim. Regarding the case in deceit, the chief

master had erred in law in applying CPR Pt 24 principles to the case. It was

not appropriate to dispose of the claimant’s complaint about deceit

summarily (see [39], [40], [43] of the judgment).

The claim in its reduced form would proceed to trial (see [46] of the judgment).

Non –Delegable Duty of Care GB (a protected party by her litigation friend the Official Solicitor) v Home Office [2015] All ER (D) 08 (Apr) The claimant, GB, pursued a claim in negligence against the defendant Secretary of State arising out of medical treatment which she received whilst detained by the defendant at Yarl’s Wood Immigration Removal Centre (IRC) between 16 June and 27 July 2012. It was contended that the prescription of an anti-malarial drug caused her to suffer a severe psychotic reaction.

Trial of a preliminary issue as to whether or not the defendant owed to GB a nondelegable duty of care was ordered. The relevant parts of the Immigration and

68

Asylum Act 1999 were in Part VIII, Detention Centres and Detained Persons. Section 149 provided to the effect that the Secretary of State could enter into a contract with another person for the provision or running by him, or for the running by subcontractors of his, of any [removal centre] or part of a [removal centre].

The issue was whether or not the defendant owed a non-delegable duty of care to the claimant so as to render it liable to the claimant in respect of any negligent acts or omissions on the part of those providing medical care at Yarl’s Wood IRC, in particular Dr I (were such negligence to be established).

The court ruled: A non-delegable duty only arose in circumstances where a claimant was especially vulnerable or dependant on the protection of the defendant against the risk of injury. There needed to be an antecedent relationship which placed the claimant in the actual custody of the defendant, and from which it was possible to impute the assumption of a positive duty on the part of the defendant to protect the claimant from harm. A characteristic of such a relationship was an element of control over the claimant and the assumption of a positive obligation by the defendant towards the claimant and there had to be an absence of negligence in the performance of the core function. If the above ingredients were in place, the next question was whether it was fair, just and reasonable to find a non-delegable duty (see [23], [26], [29], [38] of the judgment).

Those detained in an IRC on the orders of the defendant were thus dependant on the protection of the defendant. The first element of the non-delegable duty had been made out in the present case.

There could be no doubt that the second element of the non-delegable duty had also been made out. Since GB was being detained on the orders of the defendant, she was in the actual custody of the defendant. There was a significant element of control. There was a positive duty to protect GB from harm. GB was detained by the defendant in an IRC and so, she was obliged to accept the medical treatment she was given. There was no free choice. The third element had also therefore made out.

The defendant had decided to detain GB, and consequently had clear responsibilities for her treatment as a detainee as a result. It would not be just, fair or reasonable to conclude that those responsibilities disappeared simply because of an outsourcing decision (see [25], [28], [31], [43] of the judgment).

The preliminary issue would be answered in the affirmative (see [63] of the judgment).

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Limitation Ellam v Ellam [2015] All ER (D) 88 (Apr) [2015] EWCA Civ 287, The claimant claimed damages for personal injury alleged to have been inflicted upon her as a result of persistent sexual abuse committed against her by her father, the defendant, from about 1974 (when she was six years old) and 1982 (when she was 14 years old). The defence denied all the allegations of sexual abuse and pleaded that the action was statute-barred. In 2001, the claimant contacted a firm of solicitors and was referred to another firm. Brief correspondence ensued as to the merits of the asserted time bar on her claim. In 2006, the claimant first contacted the solicitors who represented her at the present proceedings. In February 2008, the claimant’s solicitors wrote to her advising her of the decision in A v Hoare ([2008] 2 All ER 1), in which the House of Lords held that s 11 of the Limitation Act 1980 (and with it, s 33, permitting extension of the limitation period) applied to claims in respect of intentional injury. The claimant said that she wanted to pursue a claim against the defendant.

In May 2010, the claimant’s solicitors approached a consultant psychiatrist for assistance, but the claimant was not seen by that doctor until April 2011, with a second consultation in July. The doctor did not produce his report until January 2012. In April, a second psychiatrist, M, was consulted. In May, the claimant saw him in consultation. His final report was received by the solicitors in June and disclosed in July. In January 2013, the proceedings were served. A trial of preliminary issues of limitation, and of any application under s 33 of the 1980 Act, was directed. In October 2013, at a case management conference (CMC), the judge directed service by the claimant of a reply on the limitation issues. Further, it was ordered that, in light of the reply served, the claimant was to be at liberty to renew any application to rely upon the expert report of M on the trial of the preliminary issues. However, no such application was made. The judge dismissed the action with costs, having refused to exercise the court’s discretion, conferred by s 33 of the Act, to order that the provisions of s 11 of the Act should not apply. He found it reasonably clear that the claimant’s date of ‘knowledge’ of her potential cause of action should be taken as not later than the date of her majority in 1986 (which was not disputed in the present proceedings). The judge then proceeded to examine the case in the light of the various considerations set out in s 33(3) of the Act. He found, inter alia, that the ‘very tardy progress made after 2008’ was not satisfactorily explained.

The claimant appealed.

She contended first, that, the judge had applied the wrong test as to the exercise of the discretion under s 33 of the Act, by not considering whether a fair trial was still

70

possible, but rather asking whether it was fair to the defendant to face such a trial.

Second, the judge had erred in determining that the discretion under s 33 of the Act was only to be exercised in ‘exceptional cases’. The court considered the judgment of Lord Clarke in B v Nugent Care Society ([2009] All ER (D) 308 (Jul)).

Third, the judge had not considered the balance of prejudice.

Fourthly, the judge had failed properly to consider the findings of M as to the deterrence to the claimant in making a complaint arising from the alleged abuse itself. Fifthly, the judge had erred in finding that the reasons for the delay had not been adequately explained.

The appeal would be dismissed.

(1)

The question for the court under s 33 of the Act was whether it ‘would be

equitable to allow the action to proceed’, notwithstanding the expiry of

the primary limitation period. That question was to be answered by

having regard to all the circumstances of the case, including, in particular,

the factors identified in s 33(3) of the Act. Whether it was ‘equitable’ to

allow an action to proceed was no different a question from asking

whether it was fair in all the circumstances for the trial to take place. That

question could only be answered by reference (as the section said

expressly) to ‘all the circumstances’, including the particular factors

picked out in the Act. No factor could be given a priori importance; all

were potentially important. However, the importance of each of those

statutory factors and the importance of other factors (specific to the case)

outside the ones spelled out in s 33(3) of the Act would vary in intensity

from case to case (see [58], [59], [73], [82] of the judgment).

The judge had identified correctly the relevant question of whether it had

been fair for a trial to take place. He had also directed himself

immediately to the question of whether a fair trial could be conducted,

the criterion which the claimant had put at the forefront of her argument.

Thus, the judge had addressed both questions and both had been

relevant. The judge had not, therefore, misdirected himself in the manner

suggested (see [60], [61], [73], [82] of the judgment).

On the second point of potential misdirection, the judge had not erred.

(2)

In referring to ‘exceptional cases’ and ‘exceptional indulgence’, he was

not saying any more than that the claimant had been asking for the

‘exceptional indulgence’ of proceeding outside the limitation period, in

the sense described by Lord Clarke in B v Nugent Care Society (see [62],

[73], [82] of the judgment).

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(3)

The judge had identified the competing arguments in his consideration of

s 33(3)(b) of the Act in the context of the present case. The points which

the judge had identified had accurately reflected the competing

considerations. The judge had clearly considered the balance of

prejudice in weighing up the statutory factors in s 33(3)(b) of the Act (see

[65], [66], [73], [82] of the judgment).

At the CMC, the judge had left open the question of permission to rely

(4)

upon M’s evidence until after service of the reply. However, no further

application for permission to deploy the report had been made and,

therefore, it was not surprising that the judge had not taken it into

account. If the claimant had wanted to rely on such material, the

defendant would have wished to obtain his own expert advice. As the

further application had not been made, the point had never arisen (see

[67], [73], [82] of the judgment).

The judge had been fully entitled to reach the conclusion that he had

(5)

as to the adequacy of the reasons for the delay. While it might have

been possible to explain away some of the early period following

attainment of the claimant’s majority, it was quite impossible to do so with

regard to the period after 2008. A very large part of that delay was

accounted for by the time taken to obtain a report from the first medical

expert. While, no doubt, the claimant’s solicitors might have pressed

harder for an outcome to that aspect of the case, there was no evidence

at all of any anxiety expressed by the claimant herself as to the progress

of her claim, beyond attendance upon the doctor when appointments

had been made. It had clearly been incumbent upon both the claimant

and her advisers, after 2008, to proceed with despatch when the primary

limitation period had expired so long ago. The delay after February 2008,

and before commencement of proceedings, was egregious and the

explanations proffered did not begin to exonerate the claimant from it

(see [68]-[70], [73], [82] of the judgment).

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Conflict of Laws Allen and others v Depuy International Ltd [2015] All ER (D) 64 (Apr) The claimants, who were part of a much larger group of New Zealand and other overseas residents, claimed damages for personal injury alleged to have resulted from being implanted with defective prosthetic hip implants manufactured by the defendant and implanted in the course of operations that had taken place in New Zealand. The defendant was a company registered in England and manufactured the prosthetic hip implants in England. Following the court’s decision that the applicable law for the claimants was that of New Zealand (see [2014] All ER (D) 235 (Mar)), they amended their claims to plead New Zealand law.

The defendant submitted that claims for damages for personal injury were precluded by the statutory bar contained in s 317(1) of the New Zealand Accident Compensation Act 2001 (for the text, see [4] of the judgment).

The trial of a further preliminary issue was directed, in relation to four of the New Zealand sample claimants, on whether under the substantive law of New Zealand, their claims were precluded by s 317 of the Act. The issues for determination were, first, whether s 317 of the Act was a substantive rule, which had to be applied by the court, or a procedural rule, which would be disregarded.

Secondly, if the rule was substantive, whether s 317 of the Act removed the claimants’ right to compensatory damages for personal injury in the present case as a matter of New Zealand law.

In particular, whether s 317 of the Act required relevant conduct in New Zealand, as the claimants contended, before it had any application.

The court ruled:

(1)

On a proper construction in the light of its purpose and context, the

statutory bar in s 317(1) of the Act had substantive effect and its

application was not limited to the courts of New Zealand. Having had

regard to the purpose and objectives of the New Zealand Accident

Compensation Scheme, the substantive effect of the statutory bar was

to remove or render unavailable the right to recover common law

compensatory damages for personal injuries. The phrase ‘compensatory

damages’ being shorthand for the heads of loss comprised by all non-

economic heads of loss or damage in a personal injury claim, but

excluding exemplary damages. A claim for any such heads of loss

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no longer remained available because the basis for and scope of liability

had been replaced by cover under the Act. That was a matter of

substantive law that determined for what there was liability. The rule did

not merely deal with remedy. The liability and, therefore, what was

actionable, was for compensatory damages for personal injury. That

was a substantive right, not merely a remedy. The fact that a cause of

action for exemplary damages remained was not inconsistent with that

conclusion and a similar point might be made in relation to the existence

of other potential remedies (see [72], [74]-[76], [85] of the judgment).

There was no additional conduct or other requirement under New

(2)

Zealand law, beyond cover under the Act, before the statutory bar in s

317(1) of the Act applied. The Act did not depend on the existence of

a defendant or some third party responsible for the injury, so that any

focus on a defendant’s conduct or a defendant’s reasonable

expectation of having been protected from liability was irrelevant and

inconsistent with the scheme’s purpose. It was the injury, rather than its

cause or the conduct that was in issue and that gave rise to rights to

compensation (see [82], [85] of the judgment).

The claimants who were covered under the Act had no right to bring civil proceedings in England for compensatory damages for personal injury by reason of the statutory bar in s 317(1) of the Act and their claims were precluded (see [86], [87] of the judgment).

74

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Section 6 May 2015

Case Management Stobart Group Ltd and others v Elliott [2015] EWCA Civ 449 Practice – Extension of time. The defendant appealed against an order dismissing his application for an extension of time for service of an expert psychiatric report and, in consequence, dismissing his claim for damages, pursuant to a cross-undertaking in damages given by the claimants in support of an injunction obtained by them against the defendant. The Court of Appeal, Civil Division, in dismissing the appeal, held that the judge’s conclusion had fallen well within the range of reasonable decision-making and it was not one to which no judge could reasonably have come.

The defendant brought a claim for damages, pursuant to a cross-undertaking in damages given by the claimants in support of an injunction obtained by them restraining the defendant from defaming them. The defendant alleged that the injunction caused him to suffer psychiatric harm and loss. The defendant was ordered to file and serve an expert report by 3 May 2013. On 2 May, the claimants agreed to the defendant’s request for a 14 day extension which had he sought because, he said, he was very unwell. On 3 May, the defendant sought a further 30 day extension.

At a case management conference (CMC) on 11 July, at which the defendant did not attend and was not represented, the first judge made an order providing, inter alia, that the defendant had to file and serve, by no later than 4pm on 16 September, a report from an expert psychiatrist and provide to the claimants’ solicitors a signed authority for the release of his medical records to the claimants’ expert witness. The defendant was given permission to apply to vary or discharge the order, provided that such application was made within ten days of the service on him of the sealed order. If he neither filed and served the expert report by 16 September nor applied to vary it in accordance with the order, the claimants would have permission to apply to strike out parts of his claim. No expert report was provided by 16 September, nor was any signed authority for releasing the medical records and no application was made to vary or discharge the order. On 13 November, the day before the next CMC, the defendant served a psychiatric report

76

from T. It was written without consideration of medical notes which T needed to see to confirm his opinion.

Following a further order made at the CMC, on 29 November, the defendant applied for an extension of time within which to serve the expert report.

The claimants applied to strike out the claim for damages, pursuant to the crossundertaking or for summary judgment. The second judge directed himself by reference to Mitchell v News Group Newspapers ([2014] 2 All ER 430) (Mitchell) and Durrant v Chief Constable of Avon and Somerset Constabulary ([2014] 2 All ER 757). He accepted that, whilst the defendant’s application was not, in terms, an application for relief from sanctions under CPR 3.9, in practice, it amounted to the same. He held that the failure to comply could not be described as in any way trivial or insignificant and that the reasons given for failure to comply were not sufficiently good so as to justify a further extension of time. The defendant’s application was refused and, consequently, his claim for damages dismissed.

The defendant appealed.

His primary submission was that the second judge ought not to have approached the case on the footing that it had been, effectively, an application for relief from sanctions. However, he acknowledged that, even were that so, his underlying submission was that the judge had failed to take proper account of all the circumstances (see [36] of the judgment).

The appeal would be dismissed.

The second judge had been correct to have treated the case as one in which the order of the first judge, by implication, had imposed a sanction for non-compliance, namely, the inability to proceed with the claim for compensation under the crossundertaking. The present case was one where the prejudice to the claimants, which resulted from non-compliance, was far from trivial. The court would only interfere with a discretionary decision of the present sort if the second judge had misdirected himself or if he had reached a decision which fell outside the ambit of reasonable decision-making. The second judge had directed himself impeccably, subject only to the gloss that the Mitchell principles had since been explained or refined in subsequent decisions to which regard had to be had. The second judge had given very careful consideration to all of the circumstances identified by the defendant to which he could properly have had regard. The conclusion which the second judge had reached had fallen well within the range of reasonable decision-making.

It had not been a conclusion to which no judge could reasonably have come. The discretion had been entrusted to the second judge, and he had exercised it in an exemplary manner and had come to a permissible conclusion 77

Wasted Costs Kagalovsky and another company v Balmore Invest Ltd and others [2015] EWHC 1337 (QB) The claimants sought a wasted costs order against the solicitor and counsel that had represented the unsuccessful eighth defendant in contempt proceedings. The Queen’s Bench Division dismissed the application.

The claimants brought successful contempt proceedings against the eighth defendant, AA. AA lost and was sentenced to eighteen months imprisonment. AA was represented by solicitors, K and counsel, L QC. AA had so far escaped justice by remaining outside the jurisdiction. Attempts to extradite him had been unsuccessful.

Furthermore, the claimants had incurred substantial costs which AA was ordered to pay but he had not done so. The claimants brought an application for a wasted costs order against K and L QC. It was contended that costs had been incurred in excess of ÂŁ400,000 as a result of the conduct of which complaint had been made.

The claimants advanced six categories of conduct which they contended fell within the scope of the wasted costs jurisdiction, including the submission of a dishonest defence to the committal application by AA and actions designed to cause delay including the adjournment of the first listed hearing of the application for committal by way of the submission of that dishonest defence. In opposition, it was submitted, amongst other things, that the wasted costs summary procedure was irremediably unsuited to the scale and complexity of the application in the case and further that the claimants were guilty of inordinate delay in the bringing of the application.

The application would be dismissed.

It was established law that, save in the clearest case, applications against the lawyers acting for an opposing party were unlikely to be apt for summary determination, since any hearing to investigate the conduct of a complex action was itself likely to be expensive and time-consuming (see [28] of the judgment).

Ultimately, the issue of costs, including the resolution of applications for wasted costs was a matter for the discretion of the court. Therefore, in the circumstances of the case the court would decline to embark on any further inquiry into the issues relevant to the application for wasted costs on the basis that the application was demonstrably unsuitable for summary determination. It followed that the case fell at the first hurdle. The issues sought to be ventilated were simply unsuitable for summary determination (see [29]-[31] of the judgment).

Medcalf v Mardell [2002] All ER (D) 228 (Jun) applied.

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Costs Part 36 Cashman v Mid Essex Hospital Services NHS Trust [2015] EWHC 1312 (QB) Costs – Assessment. The claimant appealed from an order of a costs judge refusing to award an additional amount under CPR 36.14(3)(d) on a detailed assessment of costs. The Queen’s Bench Division allowed the appeal on the basis that the master had misdirected himself and had relied on the degree of reduction made on assessment to the costs claimed as rendering it unjust to make such an award in circumstances in which the Pt 36 offer was lower than the sum at which the costs were assessed.

The defendant hospital settled a claim with the claimant in respect of his late wife in the sum of £90,000, with costs to be assessed on a standard basis. The claimant put in a bill of costs of about £262,000 and made a Pt 36 offer to settle. At the detailed assessment hearing, the claimant obtained a costs judgment more advantageous than the Pt 36 offer previously made, therefore CPR 36.14(3) applied. The master held that in the present case it would not be unjust to require the defendant to pay indemnity costs and interest but it would be unjust for the defendant to pay the additional amount under CPR 36.14(3)(d), namely, 10% of the allowed costs.

That was because costs had to be treated slightly differently to judgments and in circumstances where there had been a significant reduction in the claimant’s bill, it would be unjust to reward the claimant with an additional amount prescribed by 36.14(3)(d). The claimant appealed. The defendant opposed the appeal.

The appeal would be allowed.

It was the terms of the Pt 36 offer not the level of the sums claimed in the bill of costs which were to be considered under CPR 36.14(4). It was not suggested that there was any particular feature or consequence of the bill of costs other than its size which would render the making of an order under CPR 36.14(3)(d) unjust. The making of an order of the level required by CPR 36.14(3)(d) was decided as a matter of policy. It could be said that the provision of interest under CPR 36(3)(a) and (c) was primarily compensatory although the possibility of an award of a higher rate than would be available in the market introduced a penal element. However, the purpose of CPR 36.14(3)(d) was penal (see [19]-[21] of the judgment).

Whilst a particular factor under CPR 36.14(4) might carry more weight when considering whether it would be unjust to make an award under the different subparagraphs of CPR 36.14(3); in the present case, no reason was given why a factor rendering it not unjust to make an award under 36.14(3)(a) to (c) should be the factor rendering an award under CPR 36.14(3)(d) unjust. The master erred in relying

79

on the degree of reduction made on assessment to the costs claimed as rendering it unjust to make such an award in circumstances in which the Pt 36 offer was lower than the sum at which the costs were assessed. Further, the master fell into the temptation of making an exception by not making an award under CPR 36.14(3) (d) not because he considered the making of such an award unjust but because he thought it unjust to make an award of the required amount, 10% of the assessed costs. The master considered it would not have been unjust to award an additional amount based on the difference between the Part 36 offer and the sum of costs allowed on assessment. However that was not the regime specified in CPR 36.14(3) (d).

It was the claimant who had been penalised for making a reasonable Pt 36 offer rather than the defendant for not accepting it. That approach was contrary to the intent and effect of CPR 36.14(3)(d). The reason given by the master for holding that it would be unjust to ‘reward’ the claimant with the additional amount prescribed

by CPR 36.14(3)(d) was the size of the additional award. The master considered that had the rule permitted him to award a figure fixed by applying the prescribed percentage to the difference between the sum which the claimant offered to accept and the sum which was allowed on assessment, that may have been a just result. The approach adopted by the master penalised the claimant for making what turned out to be a reasonable Pt 36 offer

Default Judgment Priestley v Dunbar & Co (a firm) [2015] EWHC 987 (Ch) The claimant brought a professional negligence claim against the defendant firm of accountants. Judgment in default was entered in favour of the claimant and the defendant’s appeal against that judgment was dismissed. The Chancery Division, allowing the defendant’s appeal, held that, whilst it had been open to the district judge to find that the application to set aside the judgment had not been made promptly, the lack of promptness in all the circumstances of the case would not make it just to dismiss the application to set aside the judgment in default. There had been nothing in the district judge’s judgment to suggest that he had evaluated all the circumstances of the case, including those specifically mentioned in CPR 3.9, and his evaluation of the circumstances mentioned in the judgment had been flawed.

The proceedings concerned a professional negligence action. The claimant was a clinical neuropsychologist with a practice in England and France. The defendant (the firm) was a firm of accountants, which had been retained by the claimant

80

between 1977 and 2010 to, among other things, advise the claimant of more tax efficient ways of running his business. The firm had failed to file the claimant’s tax return for 2007/2008 and 2008/2009 and had not advised him of his tax liabilities for those years. The claimant brought a claim for in excess of £80,000 against the firm for professional negligence, including advice provided by M, who worked for the firm. A letter of claim was sent to the firm in January 2013. M acknowledged receipt, but did not provide a substantive reply to the pre-action protocol letter. There was a delay of some 19 months between the preliminary notice and the pre-action protocol letter and a further 9 months before the proceedings were served. No defence to the claim was filed by the firm. Judgment in default was entered. In January 2014, M wrote to the court, contending that, neither he nor his partner had received the court papers and informing it that when he had been served with the judgment, he had notified his indemnity insurers and that his solicitor had been on holiday. He also set out his defence in summary form in the letter. The firm applied to set aside the default judgment on liability. The claimant contended that the application had been made some 17 weeks after M had learned about the judgment on 26 November 2013 and 11 weeks after an order of 7 January 2014, when the district judge had specified that the application should be issued as soon as possible. A district judge considered that A had been aware of the judgment from 26 November 2013. He dismissed the application on the ground that, whilst there were serious triable issues on the question of liability, there had been a lack of promptness on the part of the firm in making the application to set aside, which resulted in work having to be done towards the damages trial. The firm appealed.

He submitted that the district judge had erred in finding that the application had not been made promptly, in attaching too much weight to the question of promptness and in his assessment of work down towards the quantum trial. Accordingly, he submitted, the district judge ad erred in refusing to set aside the judgment.

Consideration was given to CPR 13.3. It was common that an application to set aside a default judgment was an application for relief against sanctions to which CPR 3.9(1) applied. A draft defence was prepared in the court so the present application.

The appeal would be allowed.

The power to set aside a regular default judgment is contained in CPR13.3. It was clear from the wording of CPR 13.3(2) that promptness only related to the period relating to the application to set aside the judgment. ‘Promptness’ needed to be assessed in context. Furthermore delay prior to the entry of judgment could be taken into account as part of the general discretion to set aside a judgment (see [33], [34] of the judgment).

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On the facts, it had been open to the district judge to find that the application to set aside the judgment had not been made promptly. However, there had been nothing in the judgment to suggest that the district judge had evaluated all the circumstances of the case, including those specifically mentioned in CPR 3.9, and his evaluation of the circumstances mentioned in the judgment had been flawed.

Nowhere in the judgment had he mentioned the fact that the present was a claim for in excess of ÂŁ80,000 against a small accountancy firm The effect of a judgment on liability was accordingly a serious matter. Nowhere had he considered whether a more appropriate sanction for the default would have been an order setting aside the judgment on terms. Whilst it was true that M had not provided a substantive reply to the pre-action protocol letter, he had acknowledged receipt. Furthermore there was a delay of some 19 months between the preliminary notice and the pre-action protocol letter and a further 9 months before the proceedings had been served.

Thus, the present was not a case that had been progressed urgently on behalf of the claimant.

Furthermore whilst there was no dispute that the service of the proceedings had been regular, there was equally no challenge to M’s evidence that he had been unaware of the proceedings before 26 November 2014. The district judge had not been justified in holding that any significant delay to the trial on liability and quantum had been caused by the lack of promptness. An important circumstance was that there was a realistic defence on liability. It was not a shadowy defence. Further, the present was a case where the court could form no view as to the outcome of the trial. The lack of promptness in all the circumstances of the case would not make it just to dismiss the application.

The court was not satisfied that any delay to the potential trial date for a trial on liability and quantum had been more than five weeks. In the context of a case where there was a two-and-a-quarter year gap between notification of the claim and the service of proceedings, it would be quite disproportionate to refuse to set aside the default judgment on that basis

Relief from Sanctions Cockell (trading as Cockell Building Services) v Holton[2015] EWHC 1117 (TCC) The claimant builder carried out some remedial work for the defendant after a fire at the defendant’s house. The claimant brought a claim against the defendant for the alleged underpayment. The defendant filed a counterclaim, alleging bad workmanship. He failed to comply with an unless order to serve and file with the

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court a re-pleaded counterclaim by a certain date in March 2015 and before the trial in July and the counterclaim was struck out. The defendant applied for relief from sanctions. The Technology and Construction Court ruled that the application for relief from sanctions had to fail where there had been a serious and substantial breach of the order. However, the defendant was permitted to amend his defence to plead the material in the new draft of the counterclaim as a defence to the claimant’s claim in respect of the alleged underpayment.

In December 2010, a fire occurred in the defendant’s Grade II listed house and caused substantial damage. The claimant builder was employed to remove the debris and make the building safe and to carry out remedial work (stage 2). A dispute arose over the terms of the contract. The defendant contended that the claimant was entitled to a reasonable sum for the work done for stage 2. The claimant contended that he was entitled to charge agreed rates for that work, plus a 20% mark-up to cover administration management, overheads and profit.

The defendant instructed forensic accountants, who concluded that the claimant had been overcharging and had been overpaid by some £223,000. The claimant brought proceedings for sums allegedly due under the construction contract. Trial of the claim was due to take place on 13 July. The defendant’s counterclaim alleged bad workmanship in relation to the repairs done by the claimant. A judge directed the defendant to re-plead his counterclaim by 21 January 2015 (the order). He did not do so. The defendant also failed to comply with an unless order to serve and file with the court a re-pleaded counterclaim by 4pm on 20 March 2015. At 15.46 on 20 March, the defendant’s solicitors sent the amended defence and counterclaim by email to the claimant’s solicitors. An email with the same attachments was purportedly sent to the court, but was returned as undelivered due to the wrong email address being typed. The counterclaim was automatically struck out. The defendant applied for relief from sanctions on 25 March in order to restore the counterclaim.

The issue for consideration was whether the defendant should be granted relief from sanctions. Consideration was given to CPR 3.9(1) and to Denton v TH White Ltd; Decadent Vapours Ltd v Bevan; Utilise TDS Ltd v Davies[2015] 1 All ER 880 (Denton).

The court ruled: CPR 3.9 (1), as interpreted in Denton, required the court to have regard, in particular, to the two factors there mentioned, namely the need: (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders. The closer to trial an amendment was made, the clearer and better particularised it had to be (see [59], [92] of the judgment).

83

The proposed amendments fell far short of the degree of particularisation and clarity that was necessary in order to comply with the order. In those circumstances, even if the amended counterclaim had been filed in time, the defendant would still not have complied with the order. It had not just been a technical breach as a result of a failure to file the document with the court in time, but a serious and substantial breach of the terms of the order. It could not be dismissed as anything approaching trivial or de minimis. The persistent failure to serve the re-pleaded counterclaim after 21 January 2015 was a factor that could be taken into account at the first stage.

No good, coherent or even faintly plausible reason had been advanced to justify the astonishing delay in the receipt by the defendant’s solicitors of the information that had been required to re-plead the counterclaim. The information that had been provided had then fallen short of what was required to provide a re-pleaded counterclaim of sufficient particularity and clarity. There was no excuse whatever for the failure to serve a properly pleaded counterclaim in time. The provision of the necessary information for the re-pleading of the counterclaim was left until the 11th hour. Those who left necessary steps until just before the deadline had to take the risk of a last minute slip up. The claimant would be irretrievably prejudiced if he were to be required to meet that claim in time for a trial on 13 July.

To permit the defendant to advance his counterclaim on the basis of the version served on 20 March would disrupt the efficient conduct of the litigation. The evidence demonstrated a complete absence of any regard for the orders of the court. However, if the counterclaim in respect of the alleged defects was struck out that would not prevent the defendant from applying to amend his defence to allege that the claimant’s work was not worth the amount claimed owing to the presence of the defects.

It would be unfair to allow the claimant to pursue his claim for the balance of the value of his work without giving the defendant the right to deploy that defence. The fairest course would be to permit the defendant to amend his defence to plead the material in the new draft of the counterclaim as a defence to the claimant’s claim in respect of the alleged underpayment.

However, the defendant would not be granted relief from sanctions so as to permit him to pursue a counterclaim, either in the form that was served on 20 March 2015 or in the form of the new draft Accordingly, the defendant’s application for relief from sanctions failed

84

Discount Rate CICA LHS (by his Litigation Friends and Deputies, JBO and SJB) v First Tier Tribunal (Criminal Injuries Compensation) [2015] EWHC 1077 (Admin) The claimant sought judicial review of the decision of the defendant First-tier Tribunal (Criminal Injuries Compensation) (the FTT) that the appropriate discount rate for future loss in his claim for criminal injuries compensation was 2.5%. The Administrative Court, in dismissing the application, held that, properly construed, the Criminal Injuries Compensation Scheme meant that the discount rate should be whatever the rate happened to be in the civil courts at the time of assessment. As that was the discount rate determined by the Lord Chancellor, under s 1(1) of the Damages Act 1996, the FTT had rejected the claimant’s arguments for substantially the right reasons.

In July 1992, the claimant suffered injuries as a result of the gross negligence, amounting to criminal conduct, of his mother in having left him unsupervised in the presence of an accessible bottle of methadone. In consequence, he suffered a severe brain injury, which had rendered him significantly disabled in terms of his physical, neurological and neuropsychiatric condition. In March 1993, an application was made to the interested party, the Criminal Injuries Compensation Authority, on the claimant’s behalf for compensation for criminal injury. In January 1997, he was held eligible and, in March 2012, there was a hearing before the defendant Firsttier Tribunal (Criminal Injuries Compensation) (the FTT). Shortly before the hearing date, the parties agreed the quantum of the claim, subject only to the appropriate discount rate for future losses. The FTT subsequently concluded that the correct interpretation of ‘compensation will be assessed in accordance with common law damages’ in para 12 of the Criminal Injuries Compensation Scheme (the Scheme) was that it should seek to follow the general principles of compensation used by courts to quantify pecuniary and non-pecuniary damages so as to provide broad equivalence to, rather than identify with quantification of, damages recoverable in court claims for personal injuries. Given that approach, it was inevitable that it should conclude that it was both necessary and appropriate that it should apply the discount rate determined by the Lord Chancellor under the Damages Act 1996, namely 2.5%. The claimant sought judicial review of that decision.

The issues for determination were:

(i)

the correct interpretation of the phrase ‘compensation will be assessed in

accordance with common law damages’ in para 12 of the Scheme;

whether the FTT was bound or entitled to take into account the discount

(ii)

rate determined by the Lord Chancellor under s 1(1) of the Act; and 85

(iii) whether it was appropriate for the FTT to take a different discount rate,

under s 1(2) of the Act. The claimant’s main argument was that, unless the

Scheme provided otherwise, it was the common law to which the

decision-maker had to turn in assessing claims for compensation. It

alternatively contended that the FTT should have capitalised a periodical

payments order which would hypothetically have been made in a civil

court so as to achieve a lump sum, such that the relevant figure provided

the true comparator.

The application would be dismissed.

The objective of the Scheme was nothing more elaborate than to achieve a similar level of financial outcome for the victim of a crime of violence as compared to the victim of a tortfeasor with a civil claim. That was what was meant by the phrase ‘in accordance with common law damages’ in the context of a provision which laid down the basis of assessment. Thus construed, the only means by which that outcome might be attained was by applying the Lord Chancellor’s rate, because that was the rate systematically applied by the civil courts. The application of common law principles stricto sensu was not the basis of assessment laid down in the Scheme. Further, it was not appropriate to capitalise the notional periodical payments order which would have been awarded in a civil court and carry out the comparative exercise on such a footing. Not merely was that wholly strained and artificial, it was met by the obvious objection that there was no provision for periodical payments orders under the scheme. Furthermore, the approach at common law had never been to capitalise periodical payments orders so as to obtain a lump sum. Periodical payments orders and lump sums were calculated in very different ways. The most sensible option was that the Scheme meant that the discount rate should be whatever the rate happened to be in the civil courts at the time of assessment. It was not specified in the terms of para 12 of the Scheme, but it emerged from the true construction of the wording which had, in fact, been deployed (see [50]-[52], [56] of the judgment).

As the basis of assessment of common law damages required the application of the methodology a civil court would adopt to a comparable claim, the FTT had rejected the claimant’s arguments for substantially the right reasons.

86

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Section 7 June 2015

Costs Begum v Birmingham City Council [2015] EWCA Civ 386 Court of Appeal, Civil Division Practice – Civil litigation. The claimant local authority tenant was successful in her action against the authority. The claimant succeeded in her claim for breach of statutory duty, but failed in her claims for negligence and misrepresentation based upon substantially the same facts. The judge made a costs order which effectively wiped out the damages that she had recovered in the litigation. The claimant appealed. The Court of Appeal amended the costs order to more effectively reflect the various issues.

In 2001, the claimant became a joint tenant of a local authority property with Mr M. In 2003-4 the claimant purchased the house from the authority under the right to buy provisions of the Housing Act 1985. Subsequently cracking appeared in the rear extension of the house. The claimant and Mr M made a claim on their insurers.

The insurers refused to pay on the ground that the damage was attributable to preexisting defects. The claimant and Mr M intimated a claim against the authority for the cost of the necessary remedial works. The council denied liability. Proceedings were issued against the council, initially in Mr M’s name and then the claimant’s name was substituted. The claimant was successful on breach of statutory duty under s 125 (4A) of the 1985 Act. The judge held that there had been two causes of the damage to the house, namely:

(i)

lack of wall ties between the right-hand corner of the rear wall of the back

addition and the adjoining property (defect 1); and

inadequate foundations, which progressively caused damage in the form

(ii)

of cracking in and displacement of the associated drains (defect 2). It

found that the authority was aware of defect 1 and ought to have

disclosed it and therefore the authority was in breach of its statutory duty

under s 125 (4A) of the 1985 Act and liable to the claimant in damages.

The authority was not aware of or liable for defect 2. The judge dismissed

the claimant’s claims for negligence and misrepresentation. The judge

88

was unable on the material before him to determine the relative

causative potency of defect 1 and defect 2. There was a further hearing

in November 2013 to deal with causation and quantum. In his judgment

he held that defect 1 had caused 90% of the damage and defect 2

(inadequate foundations) caused 10% of the damage. He held that if the

authority had disclosed defect 1, the claimant would have insisted upon

rectification before purchasing the property.

The judge assessed remedial costs at £71,178 and general damages for

inconvenience at £11,500. After deducting 10% in respect of defect 2

(for which the authority was not liable) and making other adjustments he

awarded damages of £74,876 to the claimant.

Costs-Period 1 In respect of costs, the judge made no order for costs in respect of the period before issue of proceedings. In respect of the period from issue to 14th May 2012 (which the judge called ‘period 1’), he ordered the claimant to pay the defendant’s costs subject to one proviso. The proviso was that the authority should pay the claimant’s cost of obtaining expert evidence during that period. That produced the consequence that each party was required to pay the costs of the other side’s expert during period 1.

Period 2 In respect of the period 14 May 2012 to 4 June 2013 (which the judge called ‘period 2’), he ordered the defendant to pay 40% of the claimant’s costs.

Period 3 In respect of the period 5 June 2013 to 18 December 2013 (which the judge called ‘period 3’), he ordered the defendant to pay 80% of the claimant’s costs.

The reasons were:

(i)

during period 1, the action was bound to fail because the claimant’s only

pleaded claim was for negligence and misrepresentation;

during period 2 the claimant was pursuing three causes of action only one

(ii)

of which succeeded, namely her claim for breach of statutory duty;

(iii) if the claimant’s case had been properly pleaded, all issues would have

been dealt with in the hearing during May 2013. Therefore the claimant’s

inadequate pleading caused matters to be dealt with in two hearings

rather than one hearing. On the other hand all the evidence at both

89

hearings needed to be deployed in any event. In order to reflect the

inefficient way in which the litigation proceeded the claimant should

recover 80%, rather than 100%, of her costs during period 3.

The claimant was aggrieved by the judge’s costs order and appealed.

The claimant submitted that her case was and always had been that the authority was at fault in failing to refer back to its own records and to alert the claimant to serious structural defects before selling the property to her. The claimant’s pleaded claims for negligence, misrepresentation and breach of statutory duty were different labels which the pleader applied to the same underlying facts. The factual and expert evidence which both parties assembled was directed to those facts. Both parties would have prepared and adduced substantially the same evidence, even if the claimant had only ever pleaded her claim as one for breach of statutory duty.

The appeal would be allowed.

The proper way to reflect the claimant’s lack of success on negligence and misrepresentation would be to make a discount of 15% from the claimant’s costs up to 4 June 2013. The court accepted that at trial a modest amount of time had been spent debating the legal issues. The claimant effectively abandoned her case on misrepresentation at that stage, but not her claim in negligence, which was the subject of some argument. The claimant would recover 85% of her pre-issue costs and 85% of her costs during periods 1 and 2 (see [32]-[34] of the judgment).

Beoco Ltd v Alfa Laval Co Ltd [1994] 4 All ER 464 distinguished.

Summary Judgement Axton v GE Money Mortgages Ltd and another [2015] EWHC 1343 (QB) Summary judgment was entered for the first defendant, pursuant to CPR 24.2, (on the ground that the claim had no real prospect of success) in respect of the whole of the claimants’ claim against the first defendant under s 140A-C of the Consumer Credit Act 1974. The Queen’s Bench Division, in dismissing the claimants’ appeal and upholding the order, held, inter alia, that it could not be that the burden of proof imposed by s 140B(9) of the Act had been intended to mean that, in a case where an unfair relationship was alleged, no summary disposal should ever take place.

In the circumstances, it had been fully open to the judge to have found that the test in CPR 24.2 had been satisfied and to have given summary judgment.

90

Human Rights Act Wright v Lord Chancellor [2015] EWHC 1477 (QB) Human rights – Right to liberty and security. After having served nearly six years’ imprisonment, the Court of Appeal, Criminal Division, allowed the claimant’s appeal and imposed a total determinate sentence of three years and six months (see [2013] EWCA Crim 70). The claimant issued proceedings for damages under ss 6(1) and 7(1) (a) of the Human Rights Act 1998 and art 5(1)(a) of the European Convention on Human Rights. The Queen’s Bench Division, in dismissing the application, held that the sentence had been passed by a competent court, acting within its jurisdiction, within due procedure and without arbitrariness. In any event, the claim was met by a defence under the limitation period.

In April 2007, the Crown Court sentenced the claimant to imprisonment for public protection, with a minimum term of three years and six months for assault causing grievous bodily harm and affray. That sentence was subsequently varied, as neither offence was a serious specified offence punishable with a sentence of ten years or more. Instead, extended sentences, which were purportedly set to run for consecutive custodial terms of three years and six months followed by concurrent extension periods of five years, were substituted.

In January 2013, the claimant’s appeal against those sentences was allowed and a total determinate sentence of three years and six months was imposed, and the claimant’s immediate release was ordered, as he had served almost six years (see [2013] EWCA Crim 70). The claimant issued proceedings against the defendant Lord Chancellor for damages under ss 6(1) and 7(1)(a) of the Human Rights Act 1998 and art 5(1)(a) of the European Convention on Human Rights.

The issue for determination was whether the claimant’s detention under the flawed order had been incompatible with his Convention rights. The Lord Chancellor submitted that the claim was out of time.

The application would be dismissed.

In order to show that the detention had been incompatible with his Convention rights, a claimant had to establish one of four requirements:

(i)

the court had had no jurisdiction over the case;

(ii)

there had been a gross and obvious error in the exceptional sense;

(iii) the court had failed to observe a statutory condition precedent; or

91

(iv) the court had acted in an arbitrary manner by virtue of bad faith or failing

to attempt to apply the law correctly. The fact that a sentence had

been outside the terms of a statute could not deprive the court of its

jurisdiction. Particularly as jurisdiction had to exist until the point at which

an unlawful sentence was passed. A sentence passed in good faith, even

if in error, did not, without more, amount to such a gross and obvious error

to meet the high threshold required. It was not enough to support an

allegation that the court had acted in an arbitrary fashion or that the

detention imposed had been arbitrary simply to identify the fact that the

court had been in error. The fact that the judge had imposed the wrong

sentence did not alone make the sentencing process or the consequent

detention arbitrary (see [18], [21], [22], [24] of the judgment).

The sentence passed in the present case had been unlawful. The remedy lay in an appeal to the Court of Appeal, Criminal Division, within time or, in any event, during the period of the sentence which the claimant had been bound to serve. The sentence had been passed by a competent court, acting within its jurisdiction, within due procedure and without arbitrariness.

In any event, the claim was met by a defence under the limitation period (see [35], [36] of the judgment).

Insurer Liability –Guernsey Zurich Insurance plc UK Branch v International Energy Group Ltd [2015] UKSC 33 Supreme Court Lord Neubgerger P, Lord Mance, Lord Clarke, Lord Sumption, Lord Reed, Lord Carnwath and Lord Hodge SCJJ Insurance – Indemnity insurance. The Court of Appeal, Civil Division, held that the appellant insurer was liable for 100% of the compensation paid by the respondent Guernsey company to a victim of mesothelioma and for its defence costs. The insurer appealed.

The Supreme Court, in allowing the appeal in part, held that Barker v Corus (UK) Ltd; Murray v British Shipbuilders (Hydrodynamics) Ltd; Patterson v Smiths Dock Ltd and others ([2006] 3 All ER 785) remained as part of the common law of England and applied in Guernsey where it had not been superseded by the Compensation Act 2006. However, the insurer remained liable for 100% of the defence costs.

92

A company (GGLCL) had employed C for a period of over 27 years and, during such employment, had exposed him to asbestos dust. The respondent (IEG) was a solvent Guernsey company and the successor in title of GGLCL. C subsequently contracted and died of mesothelioma. He had brought proceedings against IEG, claiming that he had sustained mesothelioma consequent on his exposure to asbestos dust through his 27-year period of employment with GGLCL. IEG settled his claim by a compensation payment consisting of £250,000 in damages and interest, plus £15,300 towards C’s costs. It also incurred defence costs of £13,151.60. IEG looked to GGLCL’s liability insurers under policies in force during the period of exposure. Two had been identified, the second had provided insurance for six years under a policy (the policy) and the appellant (Zurich) had succeeded to its insurance liabilities.

IEG notified a claim for its total loss to Zurich, which offered to meet 22.08% of the damages and interest paid to C, and of the defence costs incurred. That proportion reflected the relationship between the six years of the insurance and the 27-year period of exposure by GGLCL, and was arrived at on the basis that IEG’s liability to C was incurred and increased from day to day throughout the 27 years, while only six years of such liability fell within the relevant insurance. The judge accepted Zurich’s case regarding compensation, but not the defence costs and held Zurich liable to pay £71,729.84 in full discharge of its policy liabilities, being its relevant proportion of such compensation plus 100% of the defence costs (see [2012] EWHC 69 (Comm)).

The Court of Appeal, Civil Division, allowed IEG’s appeal and ordered Zurich to pay £278,451.60, representing 100% of both the compensation paid and defence costs incurred by IEG. Zurich appealed.

The issues for determination were, first, whether, apart from the Compensation Act 2006, the proportionate recovery rule in Barker v Corus (UK) Ltd; Murray v British Shipbuilders (Hydrodynamics) Ltd; Patterson v Smiths Dock Ltd and others ([2006] 3 All ER 785) (Barker) still existed at common law, not in the United Kingdom, where it had been superseded by the Act, but in Guernsey where no such statute existed. There was no issue that, if Barker remained good law, then IEG’s liability in respect of the six years of cover had been and was for a proportionate part, namely 22.08%, of the full compensation which IEG had, in fact, paid.

Second, if Barker did not apply, whether, where the person responsible for exposing a mesothelioma victim had the benefit of liability insurance covering only part of the period for which he had exposed the victim and the person responsible had incurred an expense or liability which was not proportionate, an insurer who had covered only part of the whole exposure period had to bear the whole expense or liability.

The parties and interveners accepted that such an insurer had to, at least in the first instance, answer for the whole expense or liability. The further question then arose

93

whether such an insurer was in any way entitled to recoup himself proportionately, and if so from whom, when during the period of exposure the employer had chosen either to insure with other insurers, not to insure at all or no identifiable insurer could be shown to have covered the employer.

Third, whether Zurich was liable for 100% of its defence costs. Consideration was given to Durham v BAI (Run Off) Ltd (in scheme of arrangement) and other cases; Re Employers’ Liability Policy ‘Trigger’ Litigation ([2012] 3 All ER 1161) (Trigger).

The appeal would be allowed in part.

(1)

Barker held that a person responsible for exposure was liable, not for

the whole damages attributable to the mesothelioma, but only in

proportion to his own contribution to the overall exposure, probably

measured by the duration and intensity of the particular exposure for

which he was responsible. The UK Parliament had reacted immediately

to Barker by the Act, reversing the ruling that recovery should be

proportionate. Trigger provided that, where an employer was insured

against liability for a disease suffered by an employee which had been

caused during the insurance period, the necessary causal requirement

or link was satisfied in the case of mesothelioma by the employer’s

negligent exposure of the victim during such period to asbestos and so

to the risk of suffering mesothelioma, with the result that the insurer had to

indemnify the employer against the liability so incurred. The UK

Parliament’s reaction to Barker had been its right, but it had not altered

the common law position apart from statute or had any necessary effect

in jurisdictions where the common law position had not been statutorily

modified. Further, the court in Trigger had seen itself as applying what

Barker had established and there had been no issue about or challenge

to the correctness of Barker. In those circumstances, it would, on the face

of it, be surprising to find that Trigger had consigned Barker to history.

Accordingly, Trigger could not be said to have affected or undermined

the reasoning in Barker. Neither the Act nor Trigger was inconsistent with

or undermined the decision in Barker (see [4], [5], [7], [27]-[29], [31], [103]

of the judgment).

Barker had not been overruled by Trigger and remained as part of the

common law of England, which was to be taken as the same as the

common law of Guernsey. It followed that the appeal had to succeed as

regards the compensation and interest paid by IEG to C because Barker

continued to represent the common law position which applied to

Guernsey (see [31], [103], [179], [201] of the judgment).

94

The Court of Appeal had been wrong to set aside the judge’s judgment,

which should be restored on that aspect (see [35], [103], [179], [201] of the

judgment).

Fairchild v Glenhaven Funeral Services Ltd; Fox v Spousal (Midlands) Ltd;

Matthews v Associated Portland Cement Manufacturers (1978) Ltd

[2002] 3 All ER 305 applied; Barker v Corus UK Ltd; Murray v British

Shipbuilders (Hydrodynamics) Ltd; Patterson v Smiths Dock Ltd [2006] 3 All

ER 785 applied; Durham v BAI (Run Off) Ltd (in scheme of arrangement)

[2012] 3 All ER 1161 applied.

(Lord Sumption, Lord Neuberger and Lord Reed dissenting) Had Barker

(2)

not applied, so long as the insured had insured itself for the whole period

for which it exposed the victim, the insurer could ask for no more and had

to, as Trigger decided, bear the whole of any liability which the insured

incurred. The palliative in that situation was of course that an employer/

insured would have a right to contribution against any other person who

had been, negligently or in breach of duty, responsible for exposing

the victim to asbestos and its insurer would, after meeting the insurance

claim, be subrogated to that right to contribution against the other

responsible source of exposure. Further, the concomitant of insurance

liability had to be a recognition that the law could and should redress the

unjust and wholly anomalous burden which would otherwise fall on any

particular insurer with whom insurance had only been taken out for part of

the total period of exposure by the insured, by recognising an obligation

on the part of the insured to contribute pro tanto to such liability as a self-

insurer (see [54], [77], [103] of the judgment).

Had Barker not applied, there was no policy inconsistency between

recognising that the terms of the insurances made Zurich answerable in

the first instance for IEG’s liability towards C and recognising an equity,

based on consideration of the wider circumstances, requiring IEG itself

to contribute towards Zurich’s costs of meeting such liability. Accordingly,

Zurich would be entitled to look to IEG to make a contribution based

on the proportionate part of the overall risk in respect of which it had not

placed insurance with Zurich’s predecessor and in respect of which Zurich

had not recovered contribution from any other insurer (see [72], [78], [103]

of the judgment).

Had the Act been applicable, Zurich would have been recognised as

having rights both to look to the other identified insurer for a pro rata share

95

of liability and to require IEG to bear an appropriate contribution (see [96]

of the judgment).

Barker v Corus UK Ltd; Murray v British Shipbuilders (Hydrodynamics) Ltd;

Patterson v Smiths Dock Ltd [2006] 3 All ER 785 considered; Durham v BAI

(Run Off) Ltd (in scheme of arrangement) [2012] 3 All ER 1161 considered.

There was nothing to suggest that the defence costs would have been

(3)

any less had the claim against IEG been confined to the six-year

period covered by the policy. Further, under the policy, it was recoverable

on the conventional basis that IEG could prove that it had incurred, as a

matter of fact or probability, actual financial loss in the circumstances

covered by the policy. Once it was shown that an insured had, on

a conventional basis, incurred defence costs which were covered on the

face of the policy wording, there was no reason to construe the wording

as requiring some diminution in the insured’s recovery, merely because

the defence costs so incurred had also benefited some other uninsured

defendant. Furthermore, there were significant differences between

the defence costs incurred by IEG and the hypothetical position regarding

compensation in circumstances covered by the Act (see [38], [94], [95],

[103] of the judgment).

There was no right to contribution in respect of defence costs (see [95],

[103] of the judgment).

New Zealand Forest Products Ltd v New Zealand Insurance Co Ltd [1997] 1

WLR 1237 considered.

Decision of Court of Appeal, Civil Division, [2013] 3 All ER 395 Reversed

In Part.

Insurers Obligations – Privy Council Ram (Administrator of the estate of Pearl Baboolal) v Motor and General Insurance Company Ltd [2015] UKPC 22 Privy Council Lord Mance, Lord Clarke, Lord Sumption, Lord Carnwath and Lord HodgeTrinidad and Tobago

Fatal accident. PB was killed in a motor vehicle accident. The appellant

administratrix of her estate obtained judgment against the driver. The

appellant raised an action against the respondent insurer, which pleaded

96

that it had already paid out the maximum $1m to third parties with

claims arising out of the accident and had discharged its contractual

liabilities. The appellant was granted summary judgment, but the Court of

Appeal of the Republic of Trinidad and Tobago allowed the respondent’s

appeal.

The Privy Council, in dismissing the appellant’s appeal, held that s 10 of the

Motor Vehicles Insurance (Third-Party Risks) Act (Ch 48:51) contained

no provision authorising the insurer to delay paying a claim established

against its insured in order to enable other claimants to catch up so as to

allow the rateable payment of multiple claimants on a limited insurance

fund.

PB was killed in a motor vehicle accident when she was a passenger in a maxi-taxi driven by RG. Several people were killed or seriously injured in the accident, resulting in legal claims against RG. The appellant administratrix of PB’s estate commenced an action against RG. She gave notice of the action to the respondent, RG’s insurers (MGI). The appellant obtained judgment against RG and damages were assessed in the sum of $81,000. The appellant raised an action against MGI, under s 10 of the Motor Vehicles Insurance (Third-Party Risks) Act (Ch 48:51) (for the provision, see [7] of the judgment), in which she claimed the $81,000, together with interest and costs.

MGI lodged a defence, in which it asserted that its liability to third parties in respect of the claims arising out of one accident was limited to $1m, both by contract and by statute. MGI pleaded that it had already paid out the maximum $1m to third parties with claims arising out of the accident and that it had, thus, already discharged its contractual liabilities to its insured, which reflected the statutory requirements in s 4(2)(f) of the Act (for the provision, see [6] of the judgment). In the action against MGI, the appellant applied for summary judgment. She was granted a decree for $81,000, interest and costs. On MGI’s application, the order was set aside and the application for summary judgment proceeded to a contested hearing. Summary judgment was subsequently granted to the appellant, the judge having found that MGI had failed to take into account the total claims, as s 4(2) (f) of the Act required. The judge held that the insurance company had, first, to ascertain who the third party claimants were and the extent of their claims before it could apply the insurance money to meet the total claims. The Act did not give an insurance company a free hand to select which claims to settle and which third parties it would leave without a remedy. MGI should have applied to the court so as to devise a scheme to allow it to meet its liability under s 4(2)(f) of the Act. MGI appealed. The Court of Appeal of the Republic of Trinidad and Tobago allowed MGI’s appeal. It held that, where an insurer had a limited fund to meet the claims of

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multiple claimants, it was legitimate to pay the claims in chronological priority until the insurance was exhausted. The appellant’s application for summary judgment was dismissed and the action was dismissed. The appellant appealed.

The principal issue was whether an insurance company, before it paid third party claims under an insurance policy which had a contractual monetary limit on the aggregate of claims arising out of one event which equated with the statutory minimum cover, had to:

(i)

ascertain the total claims which arose from the event; and

(ii)

where the total exceeded the limit, devise a scheme for the proportionate

payment of the claims.

The appeal would be dismissed.

Section 4(2)(f) of the Act had not created a mechanism for the insurance company to pay third parties. It specified the minimum level of cover which an insurance policy had to provide in order for the vehicle owner to comply with his obligation under s 3 of the Act. Thus, s 4(2)(f) had not provided ‘protection’ to the insurer. Instead, the issue was how an insurance company was lawfully to administer a limited insurance fund to meet third party claims arising from a multiple-victim accident. Section 10 of the Act imposed the obligation on the insurer to pay third parties once they had obtained judgment against the insured. The Board had consistently interpreted s 10 of the Act, and similar provisions in statutes in other jurisdictions, as having limited the third party claimant’s right to recover directly from the insurance company the sums which the relevant statute required the policy to cover. An arrangement that prevented a victim being left in the cold, if the insurer paid out the available funds to other claimants before all injured persons had established their claims, was inconsistent with the Act as drafted. Section 10 of the Act envisaged that a third party would establish his claim against the insured and imposed on the insurance company the obligation to pay that claim. It contained no provision authorising the insurer to delay paying a claim established against its insured in order to enable other claimants to catch up so as to allow the rateable payment of multiple claimants on a limited insurance fund. Such delays could be significant, particularly if liability were in issue in some claims.

On the contrary, the Act would enable a claimant, in an appropriate case, to take enforcement proceedings against an insurer’s assets. In addition, an insurer that delayed payment would be exposed to additional interest charges, which it could have avoided by prompt payment, if the insurance fund turned out to have been sufficient to meet all claims (see [14]-[18] of the judgment).

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On the balance of probabilities, MGI had exhausted the $1m insurance in meeting claims against RG that had been established before the appellant had established her claim. MGI had acted lawfully in having paid out the insurance fund as and when each claimant had established his or her claim against its insured (see [13], [14] of the judgment).

Suttle v Simmons [1989] 2 Lloyd’s Rep 227 considered; Goberdhan v Caribbean Insurance Co Ltd [1998] 2 Lloyd’s Rep 449 considered.

Claim Form Service Chopra and another v Bank of Singapore Ltd and another [2015] EWHC 1549 (Ch) Claim form – Service. The claimants brought proceedings alleging that they had been mis-sold certain bonds. The Chancery Division held that the claimants had not validly served the claim form on the first defendant bank (IAPB) in accordance with CPR 6.9(2), in circumstances where IAPB was not carrying out its business in the United Kingdom. The claim against its parent company, the second defendant, was struck out pursuant to CPR 3.4(2)(a) on the ground that the particulars of claim disclosed no reasonable grounds for bringing the claim.

In June and July 2008, the claimants each invested US$200,000 in a bond issued by OJSC Financial Leasing Company (FLC). The claimants’ purchases were arranged by the first defendant company (IAPB). FLC subsequently defaulted on the bonds.

The claimants alleged that the bonds were mis-sold to them, in particular because IAPB had represented to them that they were ‘quasi-Russian sovereign risk’ when that was not the case. IAPB was a company registered in Singapore with premises in Singapore. IAPB was not registered at Companies House as a foreign company, nor was it an authorised person under the Financial Services and Markets Act 2000.

It was contended that IAPB did not carry on business or have any presence in the United Kingdom. The second defendant (OCBC), IAPB’s parent company since January 2010, was also registered in Singapore. OCBC had a registered UK branch office (OCBC London), which was an authorised person under the Act and was regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). In June 2014, the claimants commenced the present claim against the defendants by issuing a claim form. In October, the claimants purported to serve the claim form upon both defendants at OCBC’s premises in London (see [57]-[60] of the judgment). CPR 6.9(2) enabled a claim form to be served on a company or corporation other than one registered in England and Wales at ‘[a]ny person within the jurisdiction where the corporation carries on its activities; or any place of business

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of the company within the jurisdiction’. The defendants applied for, among other things: (i) a declaration that IAPB had not been validly served; and (ii) an order striking out the claim against OCBC. The claimants had not made any application for permission to serve the claim form on IAPB outside the jurisdiction.

The principal issues were first, whether the claim form had been validly served on IAPB and secondly, whether the claim against OCBC should be struck out pursuant to CPR 3.4(2)(a).

The first issue turned on the question of jurisdiction. The claimants contended that, at the time of the service of the claim form, IAPB had a place where it carried on its activities, or place of business in the UK, namely OCBC London’s offices.

It submitted that:

(i)

in reality, IAPB was carrying on a private banking business in the UK from

OCBC London’s premises;

all the decisions with regard to IAPB’s private banking business were made

(ii)

in London; and

(iii) OCBC London was a representative of IAPB which had authority to

contract on behalf of IAPB.

The court ruled:

(1)

The evidence had not established that IAPB was carrying on a private

banking business in the United Kingdom. On the contrary, the evidence

showed that the defendants were careful to ensure that IAPB did not carry

on business in the UK, where it was not regulated by the FCA and PRA,

and to ensure that business in the UK was carried out by OCBC London,

which was so regulated.

Further, the evidence was that the business was controlled from

Singapore. In respect of the claimants’ third submission, the matters relied

upon did not show that IAPB carried on its activities, or had a place of

business, in England. Furthermore, it was not such an exceptional case

that the court should exercise its power to retrospectively to dispense with

service of the claim form (see [109], [110], [113], [116] of the judgment).

The claimants had not validly served the claim form on IAPB in

accordance with CPR 6.9(2). The court would decline to dispense with

service of the claim form on IAPB (see [113], [116], [155] of the judgment).

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Adams v Cape Industries plc [1991] 1 All ER 929 applied; Olafsson v

Gissurarson [2008] All ER (D) 11 (Mar) applied; Act Dampskib Hercules

v Grand Trunk Pacific Rly Co [1912] 1 KB 222 considered; South India

Shipping Corpn Ltd v Export-Import Bank of Korea [1985] 2 All ER 219

considered; Sea Assets Ltd v PT Garuda Indonesia [2000] 4 All ER 371

considered.

(2)

In the circumstances, the claim against OCBC should be struck out

pursuant to CPR 3.4(2)(a) on the ground that the particulars of claim

disclosed no reasonable grounds for bringing the claim (see [117] of the

judgment).

The claim would be struck out against OCBC (see [155] of the judgment).

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Section 8 July 2015

Professional Negligence: Standard Letters Can be Dangerous The Court of Appeal in Proctor v Raleys Solicitors [2015] EWCA Civ 400 robustly rejected submissions that financial constraints and economic pressures require solicitors to ‘commoditise’ their advice.

Lord Justice Tomlinson warned against over-reliance on standard letters and tick-box questionnaires to discharge the duty owed to clients to ensure they fully understand the instructions that are provided. Raleys defended the claim on the basis that they properly advised Proctor – they sent three standard advisory letters and questionnaires to Proctor but did not meet with or speak directly to him.

The case concerned a claim by Proctor that Raleys failed to adequately advise him that he could pursue a claim for loss of ‘services’ – assistance with DIY, gardening as a result of his personal injury claim for excessive exposure to vibration, which led to the development of vibration white finger.

The Claimant relied upon the words of Donaldson L.J. in Carradine Properties v CJ Freeman Co [1999] Lloyds Rep PN 48 when he said “an inexperienced client will need and be entitled to expect the solicitor to take a much broader view of the scope of his retainer and of his duties than will be the case with an experienced client”.

Lord Tomlinson said “The solicitors were dealing with a client who could fairly be regarded as unsophisticated in the relevant field. The written advice given to him was unclear, and there were clear indications that it may not have been understood. It is not asking much of a solicitor in such circumstances to make sure that his client understands the opportunity apparently being passed up”.

This case is stark reminder to practitioners of an unforgiving approach by the courts who are not interested in the commercial realties of a particular type of litigation. The case is relevant to civil litigators who have embraced modern technology with work flows and standard letters.

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A Trustee to a Bankruptcy cannot be held Personally Liable for the Costs of Previous Hearings when pursuing an Appeal BPE Solicitors has lost the latest round in a long-running costs saga against a former client who had sued it for profession negligence.

In the latest decision, the Supreme Court held that if a trustee to a bankruptcy decides to pursue an appeal against a firm of solicitors he will not be held personally liable for costs of previous hearings.

In BPE Solicitors and another (Respondents) v Gabriel (Appellant) [2015] UKSC 39, an application for directions for a pending appeal, the Supreme Court considered the background to the negligence claim brought by appellant Richard Gabriel against BPE. The case arose following a £200,000 loan made by Gabriel to his business partner, Peter Little, to develop a site at the former RAF base Kemble Airfield in Gloucestershire. BPE was instructed to record the loan agreement in writing.

However, Little used the money to pay off a host personal debts and failed to secure the loan against the undeveloped property, which was eventually sold for a nominal sum.

In the High Court, Judge Robert Englehart QC awarded Gabriel £200,000 in damages and ordered the former solicitors to pay his costs. The Court of Appeal, however, reduced the damages to a trifling £2, set aside the costs order, and ordered the claimant to pay the solicitors’ costs of the proceedings up to and including the appeal.

In March 2014, Gabriel was made bankrupt and Mr Hughes-Holland appointed as his trustee in bankruptcy. At the same time, permission was also granted for the claimant’s appeal to the Supreme Court. The right to pursue the appeal then rested with the trustee.

BPE Solicitors argued that the trustee should be personally liable for the costs of the proceedings if he lost the appeal.

Hughes-Holland accepted that if he were to pursue Gabriel’s appeal and lost, he would be personally liable for the BPE’s costs before the Supreme Court. However, he argued he was not personally at risk by virtue of adopting the appeal as trustee in bankruptcy for the solicitors’ costs of the proceedings before the High Court and the Court of Appeal.

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The court heard how, if the appeal is successful, Gabriel’s creditors would receive between 23p and 25p in the pound, instead of between 3p and 5p. But if HughesHolland pursued the appeal, lost, and was ordered to pay the costs of appeal and of the previous hearings, the costs liability would exceed the value of the estate and the trustee would have to make up the difference on his own.

Lord Sumption, giving the only judgment, said that Gabriel was responsible for the entire conduct of the trial and appeal, and the costs order which was made against him by the Court of Appeal was a provable debt in his bankruptcy.

It would, therefore, be contrary to principle for Gabriel’s trustee to be held liable for costs in the proceedings, as this would give the solicitors an unwarranted priority for their claim under the Court of Appeal’s costs order.

Damages: You Have to Prove Your Loss It perhaps trite to state but a party claiming damages must bring evidence to court to prove the losses it claims. However, adducing evidence which actually proves the losses claimed often gives rise to difficulties in all spheres of litigation.

The judgment of His Honour Judge David Grant in Saint Gobain Building Distribution Ltd -v- Hillmead Joinery (Swindon) Limited [2015] EWHC B7 (TCC), provides a useful example of failures to adduce evidence which would have established a loss. The defendant was counterclaiming damages of £376,408.69 for defects to bonded panels. The judge dismissed the counterclaim but considered issues in relation to damages and stated, inter alia, that: “The consequence of these deficiencies is that there is simply insufficient or inadequate evidence to enable appropriate findings of fact to be made upon which an award of damages in respect of these items could be based”

CPR Case Law Roundup Another Warning about Late Service of Evidence: Vladimir Sloutsker v Olga Romanova [2015] EWHC 545 (QB) Relief from sanctions was sought for late service of evidence. Applying the Denton test, the court held that the breach was serious. The explanation for the breach was “straightforward but unimpressive”; on the day the evidence should have been served, most of the day had been taken up with finalising the evidence, and the solicitor’s attention was then required on urgent matters in other cases. Nevertheless,

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when all of the other factors were considered (not at the extreme end of seriousness, not deliberate, no serious effect upon the efficient progress or cost of this or other litigation, very short delay in service) relief was granted with the court noting that post Denton, compliance is not an end in itself, a more nuanced approach is required.

How Prompt is Prompt When Applying to Set Aside? : Priestley v Dunbar and Co [2015] EWHC 987 (Ch) Do we have a definition of promptness? This case is a useful reminder of the post -Denton approach to setting a judgment aside and the relevant factors.HHJ Beherens stated the following: “Promptness only relates to the period relating to the application to set aside the judgment. This is clear from the wording of CPR 13.3(2) and is confirmed in paragraph 30 of the judgment of Males J in Newland Shipping v Toba Trading [2014] EWHC 1986.

However, as Males J pointed out “promptness” needs to be assessed in context.

Furthermore delay prior to the entry of judgment can be taken into account as part of the general discretion to set aside a judgment. “ … I would accordingly construe “promptly” here to require, not that an applicant has been guilty of no needless delay whatever, but rather that he has acted with all reasonable celerity in the circumstances.” (per Simon Brown LJ in Regency Rolls v Carnall [2000] EWCA Civ 379) “… promptness now carries much greater weight than before. It is not a condition that must be satisfied before the court can grant relief, because other factors may carry sufficient weight to persuade the court that relief should be granted, even though the application was not made promptly. The strength of the defence may well be one. However, promptness will always be a factor of considerable significance, as the judge recognised in paragraph 27 of his judgment, and if there has been a marked failure to make the application promptly, the court may well be justified in refusing relief, notwithstanding the possibility that the defendant might succeed at trial.” (per Moore-Bick LJ in Standard Bank v Agrinvest [2010] EWCA Civ 1400)

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Costs: Part 36, Partial Success and Entitlement?

Issues based costs orders and Part 36 - Webb v Liverpool Women’s NHS Foundation Trust [2015] EWHC 449 (QB) Partial success in litigation can mean only part of a claim succeeds in which case a costs order is likely to reflect the result. In Webb v Liverpool Women’s NHS Foundation Trust however, the claimant obtained at trial 100% of her claim. However, the High Court took the view that because she had alleged negligence on two bases (firstly that the obstetrician was negligent and secondly that the midwives were negligent) and had won only on the first it was right to make a costs order only in respect of the first basis. The claimant was as a result deprived of the Part 36 enhancements in respect of her costs relating to the second basis for the claim.

His Honour Judge Saffman took the view that there were two discrete allegations of negligence and that following Multiplex Constructions UK Ltd v Cleveland Bridge UK Ltd [2008] EWHC 2280 TCC it was right to make a proportionate costs order. The judge then reasoned that Part 36 did not alter that position and that following Thinc Group Ltd v Jeremy Kingdom [2013] EWCA Civ 1306 the consequences of Part 36.14 apply unless and to the extent that it is unjust that they should do so – permutations were permitted in order to do justice.

Cost Budgeting: Pitfalls for Commercial Litigators Commercial litigators could be opening themselves up to potential professional negligence claims over costs budgeting failures, a survey of the sector suggests.

More than two-thirds of 912 commercial litigation partners at the UK’s top 200 firms reported incurring costs over and above the agreed budget level. But only 11% made an application to revise the agreed costs budget upwards.

The survey was conducted by cost specialist Just Costs Solicitors based in Manchester. Of those who revised the budget upwards, more than half of respondents cited significant developments in litigation. Nearly a third said it was because of a combination of developments and ‘simple overspend’.

Managing director Paul Shenton said it was ‘very difficult’ for solicitors to recover an overspend without applying to revise the approved budget upwards.

He said: ‘This research suggests the majority of solicitors are either unaware that a mechanism exists for budgets to be revised or believe any such application will automatically fail so there is no point in pursuing it.

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‘If clients are paying, win or lose, this is a potential professional negligence issue. If law firms are limited to what they recover, then they are effectively working for free.’

Earlier this month, Lord Justice Jackson, the architect of controversial costs management reforms, said costs budgeting had worked well and brought ‘substantial’ benefits for court users since it was introduced as part of civil litigation reforms two years ago.

He predicted that costs management would be accepted as an ‘entirely normal discipline’ within 10 years.

Nearly three-quarters of respondents to the Just Costs survey said they had prepared a Precedent H costs budget, which had subsequently been approved by the court or agreed between the parties.

Shenton said: ‘Courts have sent a number of stark warning to lawyers that a failure to conduct litigation within the confines of the budget is going to result in a proportion of the costs being irrecoverable between the parties.

‘The fact that every one of the respondents has confirmed that they monitor their ongoing costs indicates that solicitors are aware of the need to ensure that litigation is conducted within the budgeted amount.

‘However, if solicitors are monitoring their costs… there are obviously flaws in the process due to the overspend in so many cases.’

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Section 9 August 2015

Coventry v Lawrence: A Sigh of Relief for Practitioners as the Supreme Court Endorses the Old CFA Rules Judgement The Supreme Court has handed down its long awaited decision in Coventry v Lawrence [2015] UKSC 50. A 7 Justice panel held, in a majority judgment given by Lords Neuberger and Dyson, that the CFA regime was compatible with the Article 6 right to of fair access to a court. Although the Court recognised that uplifts and ATE premium would often mean that overall the costs would be disproportionate, and the old rules and practice direction contained many other deficiencies, the fact is that how to best fund litigation was a broad question for Parliament and the final scheme was justifiable and so compatible with the Convention. This was because it was justified in light of the withdrawal of legal aid, was made after wide consultation and fell within the wide area of discretionary judgment for Parliament and the Government. The Court was alarmed at the practical consequences of finding the old scheme was not compatible: “The scheme as a whole was a rational and coherent scheme for providing access to justice to those to whom it would probably otherwise have been denied. It was subject to certain safeguards. The government was entitled to a considerable area of discretionary judgment in choosing the scheme that it considered would strike the right balance between the interests of appellants and respondents whilst at the same time securing access to justice to those who would previously have qualified for legal aid. It had to find a solution to the problem created by the withdrawal of legal aid. The government has now produced three different schemes. Each was produced after wide consultation. Each has generated considerable criticism. As already indicated, once civil legal aid was constrained to the extent that it was in 1999, it became impossible to come up with a solution which would meet with universal approval. This is relevant to the question whether the 1999 Act scheme struck a fair balance between the interests of different litigants “paragraph 83.

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Commentary The Judgments are a wonderful analysis of the authorities and in some ways a depressing reminder to practitioners who had fallen foul of the old rules. There seemed little doubt that any other decision would have been given and perhaps this is the last word on the old CFA system which provided a good living for members of the Bar but was nightmare for anyone who was trying to make a living out of civil litigation. As my old principal use to say, “ never trust judges and barristers when it come to costs issues” as they are removed from the reality of a law firm and clients but this case now provides the certainty, if there was any doubt, over the lawfulness of the original scheme.

Claim Forms Are For Service: Another Salutary Reminder It is curious that having seen so many professional negligence claims over the past 25 years arising out of the service of claim forms, it is still surprising that practitioners will make the wrong assumptions about dates and addresses for service etc.

There is a short but helpful report on Lawtel of the decision of Stewart J in Dzekova -vThomas Eggar PPL (QBD 17/07/2015) and a timely reminder during the holiday season of leaving matters to the last minute.

The claimant issued a claim form against a firm of solicitors. Shortly before the expiry date the claimant’s solicitor telephoned the firm to find out the address for service as the firm had more than one office. He spoke to the managing partner’s personal assistant and, since she was told that the matter was confidential, she gave the managing partner’s address. The master held that the personal assistant had ostensible authority to bind the firm. The defendant appealed.

The personal assistant had not understood the issues that were addressed to her.

No-one at the defendant firm had represented that the assistant had authority in relation to service. The fact she had authority in relation to confidential documents was not sufficient. The appeal was allowed. Service of the claim form failed as there was no discretion to do otherwise.

NB: The Service rules are set out in CPR 6 and there is a useful table at CPR6.9 (2)

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Court Bundles: Another Warning from Jackson LJ In a judgment delivered in July, Jackson L.J. made some robust remarks about the quality of the appeal bundle. In Illife -v- Feltham Construction Ltd [2015] EWCA Civ 715 there was an appeal relating to a summary judgment order in multi-party litigation concerning fire damage. The Court of Appeal allowed the appeal.

However Jackson L.J. made some observations about the state of the appeal bundle: “Part 5. The Court of Appeal bundle

50

Paragraph 27 of Practice Direction 52C sets out clear rules concerning

what should be included and – more importantly – what should be

omitted from bundles prepared for the Court of Appeal. In particular,

paragraph 27 (1) provides that the appeal bundle “must contain only

those documents relevant to the appeal”.

51

In the last TCC appeal which I heard (a complex case concerning the

construction of a road in Gibraltar) the parties were scrupulous in

complying with that rule. They thereby saved the court much valuable

time. Not so in the present case. Here the parties set about doing precisely

the opposite.

52

The present appeal bundle (ignoring the authorities bundle) contains 2,550

pages. This includes numerous duplicates and irrelevant documents. There

are at least two copies of Dr Goudsmit’s report and at least two copies

of the JCT contract. The arrangement of the correspondence is, to put it

charitably, chaotic. It is certainly not chronological. For example, I

managed to track down the architect’s important letter of 12th May 2011

at page 1807. His follow-up letter dated 16th June 2011 is tucked away

at page 2148. Mr Dearie’s email of 26th September 2011 (about the gap

around the flue) is at page 359.Amongst the jumble of correspondence

there are copies of superfluous authorities. The brief chronology furnished

by the parties does not contain any page references to aid the hapless

judge as he/she struggles to piece together the story of what happened.

53

The appeal bundle should be an aid to the court, not an obstacle

course. The practice direction governing the conduct of appeals is not

difficult to understand. It serves a serious purpose. Experienced

practitioners should do what it says

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54

In the present case, as I indicated during argument, whatever the

outcome of the appeal no party will be entitled to recover any costs

referable to the preparation of the bundle.”

Appeal Delays and New Guidance The Master of the Rolls has issued a new Practice Guidance effective 1 August 2015, which extends the time by which the Court of Appeal should hear appeals (Judiciary: Practice Guidance: Court of Appeal Hear-by-Dates) The covering note states that the extensions are “necessary for the efficient management of the work of the court”, given the 67% increase in permission to appeal applications and the 3% increase in appeals since the last Practice note was issued in 2003. The guidance replaces that note. The number of Court of Appeal judges has increased by 1 in those 12 years.

Statement of Truth: Not for the Office Cat In Akram -v- Secretary of State for the Home Department [2015] EWHC 1359 (Admin) Sir Brian Leveson considered a case where a principal of a solicitor’s firm had signed a statement of truth in an application. He personally attested that the grounds of the application were true. However, subsequently he sent a letter stating he did not see the application and it was prepared by a caseworker.

Citing previous authorities, he stated the following:

25. The statement of truth is not an irrelevant mantra or mere verbiage. This

Court has now on a number of occasions reiterated the substantial

importance attached to qualified lawyers being in a position diligently

and carefully to scrutinise applications made to the Court. In Awuku (No

2) & Others (10th December 2012), the then President of the Queen’s

Bench Division, Sir John Thomas, stated:

“It is not sufficient for an application to be made by a caseworker without

scrutiny by a qualified lawyer.”

26. That observation was made in the context of an application to the Court

on an ex parte basis. However, in our view, it applies equally to all

applications to the High Court. If, in a given case, an application is

drafted by a trainee or caseworker, then it is of high importance that it

should be overseen by an experienced lawyer and that a statement of

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truth in the name of that experienced lawyer should accurately reflect the

fact that the lawyer in question takes ownership and responsibility of the

facts and matters set out in the application.”

The logic of course is that a false statement of truth which is attested can lead to contempt and this is why it is critical to make sure that any court application is overseen and approved by an experienced lawyer.

Witness Evidence: Quality not Quantity Will Always Prevail In Tao Ma -v- St George’s Healthcare NHS Trust [2015] EWHC 1866 (QB) Eady J looked at the judicial approach to witnesses and the standard of proof, stressing that the assessment of witness evidence is not a “numbers game” The claimant brought a defamation action alleging she was libelled by hospital staff. Much of the case centred on what happened in the Accident and Emergency Department.

I have quoted below some key observations which should be used as a helpful reminder particularly when you are dealing with what I would call a “heated” civil action, with a number of witnesses: In circumstances of this kind, there is inevitably involved an element of subjective impression. Each of the witnesses who gave evidence would, if truthful, be giving his or her impression of what happened. For example, one cannot measure precisely what is “heated” or “loud” in the course of discussions or what is “confrontational”.

Some allowance has to be made for that, by asking whether a reasonable onlooker could or would have described the relevant conduct in those terms. I am not suggesting that the defence of justification is inappropriate for the reason that these words were comment rather than fact, but simply that some descriptive terms are flexible and imprecise. On the other hand, a court should be able to determine, yea or nay, whether if a witness was struck in the chest it took place in circumstances giving rise to a defence, as is alleged here, by way of self-defence...

The standard of proof in a civil claim of this kind is on the balance of probabilities.

Which of competing or alternative scenarios is more likely to have happened? It is, however, recognised that the more serious, or the less likely, an allegation of fact appears to be, so the evidence in support of it will require to be correspondingly more cogent and persuasive. In this context, I was invited to consider the House of Lords speeches in Re D[2008] UKHL 33,[2008] 1 WLR 1499. This case provides an illustration. In so far as it is suggested that several professional witnesses have

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conspired to mislead the court about what happened, whether out of a desire to protect themselves from criticism or for any other reason, the evidence would need to be such as to overcome the prima facie implausibility inherent in such a scenario.

Of course, it is possible that such wrongdoing may occur, and sometimes it does, as certain notorious cases in the past have demonstrated, but the judge (or jury as the case may be) needs to examine every aspect of the evidence with particular care before coming to such a conclusion...

I would add that in determining the cogency of evidence, in the face of conflicting accounts, the court will always guard against treating the exercise as a “numbers game�; that is to say, it cannot be right simply to hand the palm to whichever side has managed to muster the greater cohort of witnesses. In cases where a conspiracy really has taken place, it may well be that several people will be prepared to lie in order to advance their purpose. Close scrutiny is therefore required.

I shall accordingly address the testimony of each of the witnesses who went into the witness box, individually, and I shall begin with those called on behalf of the defendant because it has the burden of establishing where the truth lies. It is also the case, as I have noted above, that they (or at least some of them) are alleged to have been prompted by malice in publishing what they did. Although in this respect the burden lies on the Claimant, it is intimately bound up with their primary evidence of what happened that evening and will be assessed at the same time.�

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Section 10 September 2015

Proportionality and Other Costs Issues This is an important judgment which should be read by all those involved in complex civil litigation. In BP -v- Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs) Master Gordon-Saker considered several issues relating to proportionality; the format of bills and the costs of costs budgeting.

In a careful judgment, analysing the work undertaken before 1st April 2013, and after applying the old and new tests of proportionality (not retrospective), he said: “Having conducted an assessment of the reasonableness of the individual items, standing back, profit costs, counsel’s fees, experts’ fees and other disbursements of £138,202.97 are not, in my judgment, disproportionate. This was a complex clinical negligence case which settled less than 2 weeks before trial. The costs allowed bear a reasonable relationship to the sums in issue in the proceedings (a claim for £440,000 which settled for £205,000), even allowing for the costs incurred before 1st April 2013, and to the complexity of the litigation”.

He also looked some issues relating to the format of the bill and how the costs budgeting phases should be dealt with and said: “Accordingly on detailed assessment it will be necessary to identify (a) the costs of initially completing Precedent H and (b) all other costs of the budgeting and costs management process. Where a costs management order has been made and the receiving party’s budget has been agreed by the paying party or approved by the court it will be both necessary and convenient that the bill be divided so as to identify the costs of initially completing Precedent H and the other costs of the budgeting and costs management process, unless those costs can be clearly identified in some other way. In the present case it was necessary for the parties to spend time in the hearing to identify the items of work which related to the budgeting and costs management process. Had the overall result been different the Claimant may have been expected to pay the costs of that in any event”

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Costs Budgeting: A Sanity Check In GSK Project Management Ltd -v- QPR Holdings Ltd [2015] EWHC 2274 Mr Justice Stuart-Smith gave a robust and critical judgment and some helpful guidance on costs budgeting and the dangers of “over-budgeting”.

I have included a few passages from the judgment which are bound to be repeated in other cases: “It is hard to imagine anything more sterile than arguing about a grossly excessive costs estimate. It does not go to the issues, it is wasteful of Court and the parties’ time, and it offends against the obligation to keep costs to the reasonable minimum (both in the fact of the estimate and the need to whittle it down). This costs estimate was grossly excessive, being overstated by almost 100% in relative terms and nearly £400,000 in absolute terms”.

In response to the claimant’s defence of the bill, based upon conduct, he said: “At one point in the attempt to justify its exorbitant costs estimate, the Claimant submitted that this litigation has been and is “combative”. That is plain and obvious from the length, approach and tone of both the Statements of Case and the correspondence included in the materials for this CMC. It does not begin to justify the level of incurred and prospective costs set out in the Claimant’s Precedent H. I respectfully repeat and adopt the recent observations of Edwards-Stuart J in Gotch v Enelco Ltd [2015] EWHC 1802 (TCC), where he said: “It is therefore time to say, in the clearest terms, that parties and their solicitors can no longer conduct litigation in a manner which does not keep the proportionality of the costs being incurred at the forefront of their minds at all times.

It is no longer acceptable – if it ever was – for the parties to pursue issues or applications that have no real impact on the issues that are central to the dispute.

Further, it is no longer acceptable for solicitors to carry on a war of attrition by correspondence, whether instructed to do so or not; it is the parties who are the subject of the duty in CPR 1.3, not merely their solicitors”.

He also had something to say about Counsel’s fees-unusual -as it is normally the solicitors who are on the receiving end: “Counsel’s fees for trial preparation and the four day hearing amount to £43,300.

As a sanity check, I asked how long a trial such as this should take to prepare. The answer was about a week, which seems generous for a case such as this given the extent of Counsel’s prior involvement. Assuming 50 hours of preparation and then 12

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hours per day during the trial suggests about 100 hours involvement in preparation and presentation. That would suggest something in the region of £30,000 given Counsel’s charging rate of £300 per hour. Putting this in perspective, if trial preparation and the trial are treated as two week’s work, £30,000 for the two weeks equates to £15,000 per week or (assuming a 40 week working year) an annualised rate of £600,000 per annum. With these considerations in mind I find it impossible to conclude that the Court should sanction more than £30,000 as being reasonable and proportionate on the facts of this case. Since I have already allowed £4,500 for the trial preparation period, there remains £25,500 for the trial period” The court also held that the claimant should pay the additional costs caused by the costs budget dispute and the claimant’s solicitor was required to notify their clients of the terms of the judgment.

The Need for Expert Evidence: Proportionality and Necessity Practitioners have felt a sense of unease relating to the use of experts since the rule changes in April 2013. Anecdotally, there have been reports of judges making orders which have affected the ability of a party to provide cogent evidence in support of their case, effectively shutting them out.

In British Airways Plc -v- Spencer [2015] EWHC 2477 (Ch), Mr Justice Warren gave some helpful guidance and may have calmed the nerves of those who feared the worst.

The judge overturned a case management decision that expert evidence was not necessary and allowed expert actuarial evidence to be called. There is a detailed judgement but in a helpful passage he said: “A judgment needs to be made in every case and, in making that judgment, it is relevant to consider whether, on the one hand, the evidence is necessary (in the sense that a decision cannot be made without it) or whether it is of very marginal relevance with the court being well able to decide the issue without it, in which case a balance has to be struck and the proportionality of its admission assessed.

In striking that balance, the court should, in my judgment, be prepared to take into account disparate factors including the value of the claim, the effect of a judgment either way on the parties, who is to pay for the commissioning of the evidence on each side and the delay, if any, which the production of such evidence would entail (particularly delay which might result in the vacating of a trial date).”

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Litigation Can be Bad for your Health: Warning to Clients about Risks In Thomas -v- Albutt [2015] EWHC Mr Justice Morgan considered, among other things, the duty owed by a barrister (and lawyers generally) to The claimants were bringing an action against the defendant barrister alleging negligence in the conduct of a judicial review where planning consent granted to them was set aside. (The judge rejected almost all the allegations of negligence, the one criticism he made was not causative of any loss). One of the issues was a general failure to warn about the risks of litigation. This is a tightrope for practitioners.

The approved the following passage from Queen Elizabeth’s Grammar School Blackburn Ltd v Banks Wilson [2002] PNLR 300, where it was pointed out the possibility of and the risk of their construction of a covenant being wrong, given that they were advising a lay client, Sedley LJ said at [51]: “Clients, I know, want two inconsistent things. They want confident advice on which they can act, and they want cautionary advice about the risks of doing so. It is a solicitor’s unhappy lot to have to try to satisfy both requirements simultaneously.”

In Thomas the court stated : “It is the duty of the solicitor to state not only his opinion as to the correct construction but he will also normally be expected to point out, where appropriate, that there are arguments to the contrary and what the consequences are of his opinion not being upheld” So far as he knew, Mr and Mrs Thomas were determined to fight the judicial review and his job was to get on with it. On 29 September 2009, he did express his opinion on the case more generally and he expressed the view that it was well worth fighting the judicial review and that it was difficult to predict the course of the litigation. In that context, I do not regard the reference to the risks as to costs being “low” as inappropriate or negligent.”

NB: See the interesting discussion in the SRA “Walking the line: the balancing of duties in litigation”.

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Airline Delay Litigation: Recent Case law His Honour Judge Platts at Manchester County Court on 14th August ruled in favour of a number of claimants in the flight delay test case Goel and Trivedi v Ryanair [2015] (unreported).

The court held that Ryanair cannot dictate how long passengers have to claim flight delay compensation through a clause in its small print.

Ryanair has been arguing that by accepting the airline’s Terms and Conditions when they buy a ticket, passengers agree that they only have two years to take a claim to court, despite the Supreme Court saying they have six years.

But Article 15 of Flight Delay Regulation EC 261/2004 states that airlines “cannot limit or restrict the rights contained in the Regulations.”

His Honour Judge Platts upheld Article 15 saying of the airline’s two year Terms and Conditions argument: “On any view that must amount to a restriction or limit on the airline’s obligation to pay and thus fall foul of Article 15.1” As Goel and Trivedi v Ryanair is a test case, it is likely that all other flight compensation claims in England and Wales across will now follow the decision.

As such, the ruling stands to benefit approximately 2.66million Ryanair passengers (around £610million in compensation).

Flight delay Regulation EC 261/2004 entitles passengers to claim flight compensation of up to €600 per person for delays of three hours or more, as long as the delay was not caused by ‘extraordinary circumstances’.

The law states that airlines must apply the limitation period (how long a passenger has to take the claim to court) of the country where the claim is lodged. The Supreme Court ruling in Dawson v Thomson Airways clarified that passengers in England and Wales have six years to take a claim to court in October 2014.

Judge Platts suggested that Ryanair did not have this latest legal argument in mind when the Terms and Conditions were drawn up.

Judge Platts said that Ryanair’s complicated legal argument: “…requires a somewhat ingenious legal analysis which I doubt was in the mind of the parties when the contract was made.”

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Litigation Round Up. James Baxter produces helpful reviews of litigation trends in the New Law Journal.

There is an interesting review “Litigation Trends- Fees a Crowd” published with the help of The London Solicitors Litigation Association The 600% increase in court fees is seen by many as a slap in the face for Jackson with a whopping 90% of respondents said it will affect a client’s decision to issue he court fee hike. One quote says it all : “The Ritz is probably cheaper now than the Central London County Court”.

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Section 11 October 2015

Social Media and Litigation In civil claims, the parties regularly check social media sites to see if there is anything that may call into question a party’s or witnesses credibility. Civil litigators will see from the judgment of Judge Seymour in Cirencester Friendly Society -v- Parkin [2015] EWHC 1750(QB) another example of how the social media can be a powerful weapon in litigation. Here we have a case of a defendant helpfully providing compelling evidence against himself.

The claimant friendly society commenced an action for a declaration that it was not liable to pay sums to a “member” due to non-disclosure. The Financial Ombudsman had, twice, held that that the claimant should pay. On the second occasion the claimant refused to pay and issued proceedings. The defendant did not really engage in the proceedings. However it was necessary for the claimant to obtain a judgment.

The learned judge stated: “Nemesis overtook from Mr Parkin most dramatically because, like so many people nowadays, in particular those who seem minded to seek to perpetrate frauds, he seemed incapable of keeping off the Internet and sharing the true nature of his activities through social media”...

“I set aside the award made by the Financial Ombudsman Service on 10 September 2010 and I declare that Mr Parkin obtained the award by the Financial Ombudsman Service on 10 September 2010 by fraud and, as a consequence, that award is, and was, unenforceable. I set aside the award made by the Financial Ombudsman Service on 25 July 2012 and I declare that the defendant, Mr Parkin, obtained that award by fraud and that, as a consequence, that award is unenforceable”.

Relief from Sanctions: Recent Cases For those who think that the effects of Mitchell have completely dissipated think again. In Ali v CIS General Insurance (2015), unreported, Judge Cryan sitting in Central London County Court upheld the decision of District Judge Coonan, to strike out the claimant’s claim for failure to comply with an order for specific disclosure.

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Applying the three stage test set out in Denton, the Judge concluded that the claimant’s breach of the order was real and far from trivial, that the claimant had failed to give an explanation for the failure to comply with the order and that the claimant’s failure to comply threatened the trial date that had been set. The Judge also concluded that the District Judge’s order, striking out the claim was within her discretion.

On the other hand, relief from sanctions following late service of the notice of funding was granted by Mr Justice Simon in Jackson -v- Thompson Solicitors (& others) [2015] EWHC 549 (QB).

Here the claimant had lost an action against multiple defendants and was ordered to pay the costs. One of the defendants (Lord Prescott) entered into a CFA with his solicitors. Notice of funding was given on the 3rd May 2012 which was late (either three or seven weeks late). The claimant took the point on assessment and also took the point that no formal notice had been given of the CFA between Lord Prescott and senior and junior counsel, although this had been notification in correspondence the relevant dates had not been given.

The delay in serving notification of the CFA was neither serious nor significant. It had no impact on the conduct of litigation, nor had it impacted on other court users. The claimant raised no objection to the notice when it was sent and had not indicated that he was prejudiced by the delay. The court was concerned with the seriousness and significance of the breach and the claimant had not been able to point to any material prejudice caused by the delay. Looking at the issues, including issues of proportionality and compliance, relief from sanctions should be granted.

Witness Evidence, Letters before Action and Pleadings His Honour Judge Lopez has been very busy in the Birmingham County Court. In the recent case of Bartlett -v- The English Cricket Board Association of Cricket Officials [2015] WL 5037730, he provides us with some useful points on the reliability of witness evidence after the passage of time.

The claimant brought a personal injury claim after he was injured when fielding in a cricket match and performing a sliding stop. The basis of his claim was that the pitch was unsafe to play and that the match officials had negligently allowed cricket to be played on a ground that was too wet.

In finding against the claimant, he stated: “I find the account given by the Claimant in the letter before action and his detailed

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statement in these proceedings as to the way in which he executed the sliding stop technique was accurate and that which he gave in his oral evidence was incorrect.

“It is a matter of common sense and experience that, in general, the recollection of a witness is likely to be better closer to the index incident than further from the event in question. Put bluntly, memories are likely to fade and the more time that passes the greater that risk. Further, it also the case that, in general, a witness’ recollection of an event is likely to be better if it involves an unusual incident or an unfolding series of events rather than an occurrence which is of no real interest at the time and only later becomes relevant or important.”

This case demonstrates what my principal said many years ago: you win weak cases through diligent preparation and consistency and lose good cases by the opposite.

Delay and Abuse of Process When I qualified in 1989, applications for dismissal for want of prosecution were common place, with cases dragging on for over 10 years not raising too many eyebrows. I even recall amending a Statement of Claim 10 years after the cause of action had accrued and obtaining leave with costs!

Practitioners will recall the House of Lords in Birkett v James [1978] AC 297, which held that the power of the court to dismiss an action for want of prosecution should be exercised only where the plaintiff’s default had been intentional and contumelious or where there had been inordinate and inexcusable delay on his or his lawyers’ part giving rise to a substantial risk that a fair trial would not be possible or to serious prejudice to the defendant, and that a plaintiff whose action was dismissed for want of prosecution before the limitation period had expired was, save in an exceptional case, entitled to issue a fresh writ for the same cause of action.

The judgment of Master Bowles in Solland International Ltd -v- Clifford Harris & Co [2015] EWHC 2018 (Ch) is timely reminder that the world has changed and delay is now seen in terms of months not year. Following a litany of delays by the claimant’s solicitors, the action was struck out. The key headline is that a failure to progress the action for 31 months amounted to an abuse of process. The test is no longer whether a fair trial or fair disposal is no longer possible but the wider discretionary powers.

The Master concluded that “... in taking no active steps between April 2012 and, eventually, November 2014 to pursue their Claim, the Claimants acted in knowing and total disregard of the rules and of the requirements of modern litigation...It seems to me to be wholly fair that litigants who, having started litigation, elect to allow that

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litigation to sink into indefinite abeyance, who have had no serious and settled intent to pursue that litigation and who have, in consequence, acted, in respect of that litigation, in knowing disregard of their obligation to the court and to the opposing party, should not be allowed to carry out with litigation conducted in that manner. It is equally fair that the opposing party, faced with litigation carried on in this fashion, should not be expected to have to continue to meet such litigation.

Civil Court System Review: An Online Civil Court?

In the past couple of weeks, consultation has already started with stakeholders regarding the reform of the civil court structure.

From the judiciary’s website it states that: “An essential part of the HMCTS reform programme involves deciding how best to deliver civil justice in England and Wales in a modern age of information technology. The Lord Chief Justice and the Master of the Rolls, as Head of Civil Justice, have asked Lord Justice Briggs to carry out an urgent review of the structure of the courts which deliver civil justice. His work is designed to align optimally with the reform programme and in addition to look at the overall structure of civil justice. He will also look at the relationship of those courts with the Family Court and with the various tribunals. This will help to ensure that the reform programme designs a service which makes best use of the large capital investment proposed and provides a modern, efficient and accessible civil dispute resolution service for all.

Lord Justice Briggs will be assisted by a small team and will be supported by the Civil Judicial Engagement Group in an advisory capacity. He will also be seeking a wide range of views about this large subject during the next few months.

He has been asked to produce an interim report by the end of 2015�

Hot on the agenda will the development of an online court. Given the rather embarrassing experience of IT projects involving the court service this may be more aspirational than real as money will of course need to found to pay for the necessary changes.

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Flight Delay Compensation: A Ruling from the ECJ In last month’s newsletter, I covered this developing area of law and the judgement of His Honour Judge Platts at Manchester County Court on 14th August who ruled in favour of a number of claimants in the flight delay test case Goel and Trivedi v Ryanair [2015] (unreported).

We now have the European Court of Justice (ECJ) reaching the same conclusion as UK domestic courts that stranded airline passengers will be eligible for compensation payouts caused by technical problems.

In a case brought by the Dutch airline KLM, the judge decided that unexpected technical problems can no longer count as an “extraordinary circumstance”, opening the door to claims of up to €600 (£437) a passenger.

Last year, the Supreme Court, refused permission to appeal in the case of Jet2.com Limited v Huzar and Thomson Airways Limited v Dawson[2014], where the Court of Appeal reached the same conclusion in a case brought by a passenger who wanted compensation for a 27-hour delay, but the decision was only legally binding in England and Wales.

Curiously, despite these rulings thousands of people who have tried to lodge a claim have been fobbed off by airlines. In the past few weeks, Britain’s aviation regulator, the Civil Aviation Authority, began enforcement action against Ryanair to make the budget airline pay compensation to thousands of delayed passengers in the wake of the European court judgment.

But critics say airlines have been suffering collective amnesia about the cause of delays since the court ruling. “We often hear from passengers that they were told of ‘technical issues’ at the airport, only for it to change when the passenger goes to make a claim,” says a spokesperson from Bott & Co, a legal firm that specialises in flight delay claims and represented passengers’ interests in the KLM case. “In our experience most airlines do it in some cases.”

Since the court ruling, airlines have been turning “technical problems” into a “hidden manufacturing defect” which does count as an “extraordinary circumstance” and which would, if genuine, oblige the airline to ground its entire fleet.

“Before the ruling fewer than 5% of passenger claims represented by Bott & Co were met with the defence of hidden manufacturing defect,” says the spokesperson.

“Now, around 79% of the claims we have going through the court system are using that defence. In some cases, airlines have even changed the defence from ‘technical problems’ to ‘hidden manufacturing defect’ on the very same claim. One

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major airline did not file a single ‘hidden manufacturing defect’ defence until March 2015, when we received 500 in the space of six weeks! We won on all those.”

Following the ECJ ruling, enabling claims for technical faults, it is expected that the “hidden manufacturing defect” defence will become even more popular.

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Section 12 November 2015

SUMMARY JUDGMENT: GUIDANCE FROM THE COURT OF APPEAL WITH DISPUTED FACTS Claimants have always treaded carefully with summary judgment applications where the facts are clearly disputed even though the defendant’s case is barely credible. In Optaglio Limited -v- Tethal [2015] EWCA Civ 1002, the Court of Appeal considered the issue of how far a judge can determine disputed issues of fact in a summary judgment application. The claimant was appealing an order whereby the defendants had been granted summary judgment. The claimant was alleging negligence on the part of the defendants when they were directors of the claimant company.

Lord Justice Floyd set out the relevant principles s follows: “It is well settled that an application for summary judgment should not be allowed to develop into a mini-trial of disputed issues of fact. On the other hand: ” …that does not mean that the court has to accept without analysis everything said by a party in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporary documents. If so, issues which are dependent upon those factual assertions may be susceptible of disposal at an early stage so as to save the cost and delay of trying an issue the outcome of which is inevitable” seeED&F Man Liquid Products Ltd v Patel and another[2003] EWCA Civ 472 at paragraph 10.

Given the nature of the summary judgment test, the court can only dispose of factual issues in this way when there is no real prospect of the evidence of one side on that issue being accepted. I would add that it is incumbent on a judge giving summary judgment on the basis that an account of a witness is to be disbelieved to explain with reasonable particularity what it is about the contemporary record or other evidence which justified rejecting his evidence.”

Floyd LJ then went onto to deal with the central issue in this case: “Mr Jonathan Cohen, who appeared for Optaglio, takes issue with paragraph 26 of the judge’s judgment where the judge refers to using credible contemporaneous material to

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contradict bare assertions or denials and “give it appropriate weight”. He suggests that this passage indicates that what the judge thought he was engaging in was a process of weighing up and balancing conflicting evidence. That was inappropriate on a summary judgment application. Mr Mold, who appeared for the respondents, submits that the judge was simply reflecting the passage from ED&F Man Liquid Products which I have quoted above.

I think that the reference to giving the contemporary material appropriate weight is somewhat ambiguous. In order to justify disposing of a factual issue at the summary judgment stage the contemporary material must be sufficient to allow the court to say that the contrary assertion has no real prospect of success. This is not really a question of weight, or of weighing competing material. However, if I were otherwise satisfied that the judge had applied the principles correctly, I would not have been inclined to allow the appeal on this ground alone.”

ALLOCATION TO THE SMALL CLAIMS COURT: FINACIAL MIS-SELLING CASES In Williams -v- Santander UK PLC [2015] EW Misc B37(CC) District Judge Stamenkovich considered an application to re-allocate a case from the small claims track. The claimant was seeking damages (£5,000 – £7,500) from the defendant for alleged negligence in the selling of an investment policy. After consideration of detailed submissions from both parties in the Directions Questionnaires the judge allocated the matter to the small claims track. The claimant made an application for the action to be re-allocated.

I have set out below some key parts of the judgement which shows not only some of the key principles to be followed but a shift in allowing a case which in the past would have been comfortably allocated to the fast track even though the claim was modest. For those undertaking financial mis-selling cases, this case must be a worrying development.

“District Judge Atkinson considered all of those submissions and this is very clear from his Order, because this was not just a straight forward tick box allocation as sometimes is the case on a lot of the small claims track hearings. It was a considered allocation because he actually gives a reason for his allocation at the start of his Order.

The court, when considering reallocation, having had a considered allocation decision made, (which I cannot find that Judge Atkinson’s decision was anything other than that), Miss Skittrell, on behalf of the Defendant, reminds the court that CPR 26(10) is the Rule governing reallocation. The notes in the White Book says: 127

“There has to be a good reason to reallocate and Judges have an unfettered discretion.”

In 11.2 of the Practice Direction to Part 26 it says: “Where there has been a change in circumstances since an order was made allocating the claim to a track, the court may re-allocate.”

Quite clearly here there is no change in circumstance that has been argued on behalf of the Claimant, nor has there been any good reason why this claim should be re-allocated other than to the track it has been re-allocated to?

When one looks at the matter, overall and the overriding objectives here, which Judge Atkinson clearly had in mind when dealing with the allocation – which all Judges have to – we have to deal with cases in ways which are proportionate. We have to deal with cases justly and we have to deal with cases expeditiously and fairly, allotting to it an appropriate share of court resources. The amount involved is clearly well within the small claims track here. To quote Judge Atkinson: “Costs incurred in any other track would be wholly disproportionate to the money involved.” The importance of the case and the complexities of the issues are other matters, to which the court has have regard, when looking at it justly and at proportionate cost.

The complexity of the issues: I think I have already dealt with. Saving expense: The small claims track, clearly is a claims track where the court seeks to save the parties’ expense and it has the added advantage, of course, of offering the parties a free mediation service. The courts always bear in mind cases which are, as this is, and,indeed, as was referred to by in Judge Atkinson in his Order, capable of settlement through such a free mediation service. That would cost the claimant nothing. There are alternatives which Mr Varmer says, of course, the Claimant is not obliged to embark upon, e.g. the FOS. However, of course, the parties are obliged, when a Judge directs mediation, to give that very careful consideration. Therefore, keeping the parties on an equal footing through that mediation service is something, of course, the court also had in mind...

Therefore, as far as this court is concerned, I can see no reason to sit as a Court of Appeal from my fellow Judge in terms of allocation, bearing in mind all the representations were available to him at the time of allocation, and they have simply been repeated today”

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APPLICATION TO AMEND PLEADINGS ORDERED -COSTS PENALTY DUE TO FAILURE TO CONSENT A decision of HH Judge Purle QC in the High Court (Chancery Division), unreported, sitting in Birmingham, 30th September 2015 is of real value to practitioners when faced with a party who unreasonably refuses consent to a routine order.

On 13 April 2015 His Honour Judge Purle QC struck out Particulars of Claim; under the terms of an unless order, the Claimants were given the opportunity to substitute the Particulars of Claim by way of an application to amend (to be lodged by no later than 6 May 2015. New particulars were drafted by leading counsel and an application was made in time.

The Applicants invited the Respondent to consent to the introduction of the Particulars to save time and cost. The Respondent adopted a stance whereby they did not oppose the application but refused to consent to it. Further efforts were made by the Applicants to obtain consent to avoid the need for a hearing but to no avail.

The Judge held that the Defendants’ stance had been unreasonable and that they should have co-operated and agreed to directions by way of consent. There was no need for the hearing to have gone ahead. The Claimants were thus entitled to the costs for the attendance of the hearing.

CPR 36: OFFER LETTERS At a recent lecture I gave with Professor Regan in Manchester, we both shared similar stories of practitioners who recounted the same story: parties were routinely failing to comply with the rules when making offers to settle under CPR36.

Remembers of course that CPR 36 is a highly prescriptive and self-contained code: Gibbon v Manchester City Council [2010] 1 WLR 2081.

The decision of Mr Justice Morgan in Tim-Alexander Gunther Nikolaus Hertel -vArtemis International Sarl [2015] EWHC 2848 (Ch) although a complicated claim is worth reading. The fact that the offer made was not a Part 36 offer (despite both parties calling it such and, initially, agreeing it was) made a major difference in relation to the award of costs. He stated at paragraph 41 the following: “The Claimants sought to avoid this prima facie result by relying on r. 36.3(2) which provides that a Part 36 offer may be made at any time, including before the commencement of proceedings. The offer letter in this case was not sent before

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the commencement of proceedings so that this rule has no direct application in this case. However, it was argued that if it were right that it is possible to make a Part 36 offer in relation to a claim before proceedings are commenced then it followed that for the purposes of r. 36.2(2)(d), the references to the whole of the claim or to part of the claim included references to a claim which had not been brought when the offer was made but which was subsequently brought. It was then submitted that (on the basis of my findings as to when the amendment to the claim was made in this case) the offer was made in relation to a part of the claim which although it was not part of the claim at the date of the offer, it later became part of the claim when the Deputy Master granted permission to amend. It was said that what had happened was essentially what was covered by r. 36.3(2). I do not accept that argument. R. 36.3(2) does not in terms cover this case. To deal with the circumstances of the present case, there would need to be a further provision which extended that rule to a case like the present. As Part 36 is a highly prescriptive and self-contained code, it does not seem to me to be right to add in further provisions on the basis that they would have an analogous effect to the express provisions of Part 36.

In this case, I hold that the offer letter did not comply with the mandatory requirements of r. 36.2(2)(d) and it therefore follows that it was not a Part 36 offer”

COSTS BUDGETING: A NEW PRECEDENT Q A gentle reminder to everyone that these new rules came into force last month.

CPR 47.6 is amended from 1 October 2015 such that the documents to be served when commencing detailed assessment will now include: “if a costs management order has been made, a breakdown of the costs claimed for each phase of the proceedings” The civil procedure rules are here and the amendments to the Practice Directions are here 81st Update PD Making Document There is a new “Precedent Q” Model form of breakdown of the costs claimed for each phase of the proceedings. The new Model Precedent Q can be found on this link showing the format of the breakdown.

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INSOLVENCY PROCEEDINGS EXEMPTION: LORD JUSTICE JACKSON SPEAKS OUT The Law Society Gazette covered a lecture given by Lord Justice Jackson who has urged the government to ditch one of the final exemptions to his civil justice reforms.

Speaking at the 2015 Mustill lecture in Leeds, Jackson said the exemption for insolvency proceedings should not continue.

Jackson, whose reforms formed the backdrop to part two of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, said firms affected have had ‘more than enough’ time to prepare for changes.

In February, the Ministry of Justice said it would delay dropping the exemption - due to happen in 2015 - ‘for the time being’. A subsequent report of the likely effect of LASPO on insolvency litigation found many cases of recovery against rogue directors would not get off the ground if subject to the new rules.

But Jackson said the 2015 timescale for dropping the exemption should stand and described recoverability of after-the-event insurance and success fees both scrapped in LASPO - as ‘an instrument of oppression, which is liable to crush defendants who have a good defence’.

He added that recoverability drives up the overall costs of litigation and that it would be ‘perfectly possible’ to bring insolvency litigation without the benefit of recoverability.

Jackson argued that those litigating using conditional fee agreements and ATE insurance had enjoyed a ‘windfall’ which created a ‘hopelessly unequal playing field’.

‘Many defendants in insolvency litigation backed by CFAs/ATE are individuals and often they are of modest means,’ he added.

‘It is wrong in principle to force all defendants in insolvency cases backed by CFAs/ ATE to litigate at massive disadvantage.’

He suggested that only when LASPO is applied will the Insolvency Service take ‘proper steps’ to control litigation costs, and that neither insolvency practitioners or lawyers have ‘sufficient incentive’ to do so under the exemption.

‘It is in the public interest that the assets of insolvent companies and individuals be recovered by office-holders (who are strangers to the insolvent estate) for distribution to creditors, so far as this is lawful and possible.

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‘There is also, however, a public interest in controlling litigation costs generally.

Excessive litigation costs are wasteful of the nation’s resources.’

Jackson said this ‘insolvency carve-out’, which sets out a special set of rules for insolvency cases, subjects defendants to a ‘form of blackmail’ which drives them to settle early, even if they have good prospects of success.

Graham Rumney, chief executive of insolvency trade body R3, which has campaigned to keep the exemption, said many of the points raised by Jackson apply to the funding of litigation in general and not apply to the specific case of insolvency.

He said: ’Lord Justice Jackson fails to address the fact that it is ordinary creditors – from small businesses to HMRC – that benefit from the exemption. Without the exemption, creditors face seeing £160m of their money stay in rogue directors’ hands every year. ’Lord Justice Jackson talks about ‘levelling the playing field’; in reality, it is the exemption that levels the playing field. Without it, directors, bankrupts or third parties have no incentive to return money to creditors that they have wrongfully taken.

They can act with impunity.’

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