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Corporate Claims Bulletin _ february 2017

  • United Kingdom
  • Litigation and dispute management
  • Personal injury claims litigation - Personal Injury Bulletin

08-03-2017

Welcome to the new edition of the Eversheds Sutherland Corporate Claims Bulletin, which provides an overview of recent case law and important legislation changes from February 2017.

We hope you find this briefing useful and informative. If you require any further information, please find our contact details at the end of this newsletter.

Top Stories

MOJ reduces discount rate from 2.5% to -0.75%

In the biggest shake up since 2001, the MOJ has announced a radical reduction in the discount rate, increasing dramatically the value of future loss claims and expecting to cost the insurance industry billions.

Read full article here

Government closes consultation on review of low value soft tissue injury damages

Proposals are for a fixed tariff for minor soft tissue and psychological injuries resolving within 24 months, together with raising the small claims limit to £5,000 for whiplash claims and £2,000 for other personal injuries. The changes are to be brought in on 1 October 2018.

Read full article here

Liability

Cavanagh v Witley Parish Council & Kevin Shepherd Tree Surgeons QBD _ 14 February 2017

In January 2012, a bus driven by the Claimant was hit by a tree which fell from Witley Parish Council’s (D1) land. The Claimant suffered severe injuries but the matter was listed for a split trial and this decision relates to liability.

D1 accepted that the tree was on their land and that they owed a duty of care to act as a reasonable and prudent landowner, including a duty to avoid apparent danger and a duty to carry out inspections. D1 operated a system of 3 yearly inspections, the tree having been inspected in 2006 and 2009 by Kevin Shepherd Tree Surgeon (D2). It was also common ground between the parties that the cause of the tree falling was extensively decayed roots, with high winds being a contributing factor.

Both D1 and D2 defended the claims to trial. The Claimant alleged that the decay in the tree would have been discoverable upon inspection by a competent arboriculturist at any time in the 4-5 years before it fell. The Claimant said that D1 was negligent in having employed D2 who did not have the appropriate experience or qualifications, and neither did they ensure that they had adequate liability insurance. They also claimed that D1’s system of 3 yearly inspections was inadequate and the tree should have been inspected at 18-24 month intervals.

D1 denied these allegations, defending its system of inspection and defending D2’s competence. They had acted reasonably in relying upon D2’s reports which had shown no issues with the tree. D1 also disputed that the defect would have been visible in 2009 and relied upon expert evidence to support that position. D1’s expert was the only 1 of the three to actually examine the remains of the tree and he was therefore able to more accurately predict its growth rate prior to falling.

D2 also denied the allegations against him saying that he had not in fact inspected the tree in 2009 because he had said to D1 that he needed maps and plans showing the trees to be inspected, and he had not received these from D1 despite requests. D2 said that he told D1 he had not inspected this tree by marking on the inspection report “no works”. D1 had interpreted this to mean that it had been inspected but did not require any remedial works.

Expert arboriculturists were called by each party. The experts for the Claimant and D1 were largely in agreement, that this tree was in a high risk location and there were a number of guidance documents which assisted to determine the nature of the duties, including a Forestry Commission guide. However the expert relied upon by D2 gave inconsistent evidence and the Judge was not impressed with how he presented. Neither was the Judge persuaded by D2’s own evidence, or that of his wife, as to the facts relating to the tree inspections. He disbelieved D2’s assertions that he had requested maps from D1 saying that these assertions were a “complete work of fiction” and he rejected D2’s evidence that he had not inspected the tree, as he had initially told his solicitors that he had inspected it and only changed his mind later when he realised he didn’t have insurance cover and “panicked”.

The Judge held that:

  • D2 had inspected the tree
  • D2 had not detected the decay, but he accepted D1’s expert evidence about the date the decay would have been visible, concluding that it would not have been visible until later than 2009 in any event
  • the negligence of D2 was not therefore causative
  • the tree was in a high risk possible, being beside a road, and following the Forestry Commission Guidance the tree should have been inspected more frequently than every 3 years, at least every 2 years
  • a 2 yearly inspection would have discovered the decaying roots before the accident

Judgment was given for the Claimant against D1 and the claim against D2 was dismissed.

Practice and Procedure

Dhanji v Al-Najar & Others EWHC 193 _ 18 January 2017

This case was a commercial dispute relating to breach of trust but it came before the High Court on two interim applications. Firstly, an application by the Claimant for Judgment in default of a defence, and secondly an application by the defendants for relief from sanctions and/or an extension of time to file their defence.

Proceedings were issued on 4 October 2016 following protracted pre action correspondence. The date of service was 7 October 2016 and the last date for filing and serving a defence was 3 November 2016.

On 1 November 2016 the defendant’s solicitors realised they would need an extension of time but they did not request one until 15 November 2016 by which time the claimant’s solicitors had already issued their application for Judgment. The request for an extension was therefore refused, but not until 22 November 2016.

In the meantime the Defendant’s solicitors filed a Defence and counterclaim, received by the Court on 21 November 2016, but they did not serve it on the claimant’s solicitors or notify them that they had filed it.

The defendants solicitors took no action until they lodged the present application on 16 January 2017.

The claimant said in their application that following the Mitchell and Denton cases, the Court should not grant relief because the breach was not trivial, but serious and significant, and the Court agreed.

The Court then looked at the reason for the breach and concluded that the defendant’s solicitors had been incompetent, ignored the rules (particularly relating to service of the defence on the claimant’s solicitors – which they said they didn’t realise they needed to do) and there was no adequate explanation.

The third stage of the test was to consider the whole circumstances of the case. Although the court accepted that the defendant’s solicitors had behaved inefficiently and with little regard for the rules, going so far as to say they were incompetent and unprofessional, the court did not consider that the breach ought to be relieved because it could be dealt with in other ways, such as costs sanctions. The Court therefore extended time for service of the Defence.

This is another example of the lower courts leniently applying the Mitchell and Denton rules, in rather an extreme set of circumstances.

Costs

Rezek-Clarke v Moorfields Eye Hospital High Court Costs Office _ 17 February 2017

This is a medical negligence claim in which liability was admitted prior to proceedings. Proceedings were served in May 2015 and a settlement was agreed by the parties in July 2015. The claimant accepted the sum of £3250.

In October 2015 the claimant’s solicitors served a bill of costs totalling £72,320.85 which included an ATE premium of £31,976.49. The parties were unable to reach agreement and the Court undertook a provisional assessment in October 2016, reducing the claimant’s costs to £24,604.40. On 26 August 2016 the claimant requested an oral hearing to challenge the Judge’s finding that their bill had been disproportionate and to challenge the reduction made.

The defendant’s position was that the original bill was wholly disproportionate considering the low value of the claim and accepted the Judge’s provisional assessment as reasonable. The evidence looked at the basis of assessment of the ATE premium which appeared to have been calculated on the basis of 200% of the medical report costs. The Defendant produced evidence that appropriate cover was available for between £595 and £3,500.

The claimant disputed the provisional assessment on the basis of the Defendant’s conduct and claimed that causation was complex. There were also investigations into other potential defendants who were not ultimately pursued.

The Judge held that the claimant’s solicitors ought to have made an early assessment of the likely value of the claim and conducted the litigation accordingly. The Judge rejected the argument that profit costs should be assessed separately from additional liabilities, as post April 2013 a party’s costs ought to be looked at as a whole and any item can be disallowed or reduced if disproportionate even if reasonably or necessarily incurred.

The Judge maintained that his reduction of the ATE premium from £31,976.49 to £2,120 was reasonable and that the costs overall were disproportionate. He made slight increases to the sums allowed but they remained disproportionate. The total allowed at the final hearing hasn’t been reported.

Merrix v Heart of England NHS QBD _ 13 October 2016

The claimant was successful in her claim for damages in a clinical negligence claim. During the course of negotiations regarding recovery of the claimant’s costs, a preliminary issue arose as follows:

“to what extent, if at all, does the costs budgeting regime under CPR Part 3 fetter the powers and discretion of the costs Judge at a detailed assessment of costs under CPR Part 7”.

The Court was asked to consider the relationship between costs budgeting and costs assessment.

The claimant’s position was that if her costs are claimed at or less than the figure approved for that phase in her budget then they should be assessed as claimed, without further consideration. There should only be a reduction where the Defendant can prove a good reason to depart from the budget.

The defendant’s position was that the costs Judge’s discretion is not fettered by the budget figures and the budget is just one factor to be considered in determining reasonable and proportionate costs.

The Court examined CPR Parts 44, 47 regarding detailed assessment and 3 regarding budgeting. They found that the purpose of approving and/or agreeing costs budgets is to set a limit on recoverable costs subject always to the ordinary principles of costs assessment. Costs budgeting does not replace the detailed assessment process, or the requirement of reasonableness and proportionality. Budgeting and detailed assessment perform different functions and there is no inconsistency between them in real terms. Budgeting is a case management tool to set the landscape of a claim. Detailed assessment is the closer examination of that landscape at the conclusion of a claim.

The Court therefore concluded that the powers and discretion of the costs Judge at detailed assessment are not fettered by the budgeting regime, save that the budgeted figures should not be exceeded unless there is a good reason.

Other news

Changes to Court fees from 6 March 2017

Hearing and trial fees increase

Compulsory e-filing at the Rolls Building from April 2017

From April 2017 it will no longer be possible to issue claims, applications or file documents on paper at the Rolls Building. The e-filing system must be used.

88th CPR update from 6 April 2017

Includes – legal advisers given powers to deal with some District Judge duties, including applications for extensions of time, and applications to substitute parties.

  • tighter sanctions for non-payment of trial fees
  • amendments to CPR Part 3 regarding costs budgeting the clarify the court’s powers to record comments regarding incurred costs

For more information contact

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