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Corporate Claims Bulletin: April 2020 edition

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

14-05-2020

Liability

Barclays Bank plc v Various Claimants [2020] UKSC 13

The issue before Court was whether Barclays Bank “BB” was vicariously liable for the sexual assaults allegedly committed between 1968 and about 1984 by the late Dr Gordon Bates (“GB”) on the 126 claimants in this group action.

Background

After successful interviews, job applicants were only offered a position if they passed a medical examination. BB arranged the appointments and gave applicants a “Barclays Confidential Medical Report” from to be filled in. GB was paid a fee for each report.

The examinations were carried out unchaperoned and many of the applicants were aged 16 & under at the time of the examinations.

High Court and Appeal Court

The High Court held that BB was vicariously liable for any assaults that GB was proved to have perpetrated. The Court of Appeal upheld the decision.

The High Court and the Court of Appeal adopted the approach in Catholic Child Welfare Society v Various Claimants [2012] UKSC 56, which was to decide whether it was “fair, just and reasonable” to impose vicarious liability upon a person for the torts of another person who is not his employee the following must be considered:

  1. the employer is more likely to have the means to compensate the victim and can be expected to have insured against that liability
  2. the tort will have been committed as a result of activity being taken by the employee on behalf of the employer
  3. the employee’s activity is likely to be part of the business activity of the employer
  4. the employer, by employing the employee to carry on the activity, will have created the risk of the tort committed by the employee
  5. the employee will, to a greater or lesser degree, have been under the control of the employer

On the facts, both the High Court and Court of Appeal found that the five factors were applicable to BB’s relationship with the doctor.

Supreme Court

It is trite law that one who hires an independent contractor is, in general, not liable for torts committed by said contractor, in the course of the execution of the work. The classic distinction between employment and relationships akin to employment, on the one hand, and the relationship with an independent contractor, on the other hand, has not been altered by recent case law.

The five key considerations in Catholic Child Welfare Society are helpful to identify whether the relationship between the employer and the negligent party is sufficiently akin to employment to make it fair, just and reasonable to impose vicarious liability. Where it is clear that the tortfeasor is carrying on his own independent business, it is not necessary to consider the five incidents.

On the facts, it was clear that GB was not at any time an employee of BB or anything close to an employee. Therefore BB was held not liable.

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WM Morrisons Supermarkets plc (Appellant) v Various Claimants (Respondent) [2020] UKSC 12

In this matter, the issues before the Supreme Court were:

(1)  whether, on the facts, Morrisons (“M”) could be held vicariously liable for the wrongs committed by its employee

(2) whether the Data Protection Act 1998 (“DPA 1998”) excluded the imposition of vicarious liability for:

(a) statutory torts committed by an employee data controller under DPA 1998, or

(b) misuse of private information and breach of confidence.

Background

In November 2013, M gave one of its senior internal auditors, “AS”, access to the payroll data of its entire workforce, so that he could provide the data to M’s external auditors (KPMG) for statutory auditing purposes.

In 2014, without M’s knowledge or permission, AS copied the payroll data of almost 100,000 of M’s employees onto a personal USB stick and posted them to a file sharing website. He also anonymously reported the breach to three newspapers. Subsequently he was jailed for eight years.

9,263 affected current and former employees brought a group action against M alleging both primary liability and vicarious liability for:

(1) breaches of certain provisions of DPA 1998;

(2) the tort of misuse of private information; and

(3) breach of confidence.

High Court and Court of Appeal

The High Court rejected all claims of primary liability against M under DPA 1998, but ruled that M was vicariously liable for AS’ actions in disclosing the payroll data. This is despite DPA 1998 not expressly providing for vicarious liability.

M’s appeal to the Court of Appeal was unanimously dismissed.

Supreme Court

The Court had to decide whether the wrongful conduct had been so closely connected with the acts that AS had been authorised to do that it might fairly and properly be regarded as done by the employee while acting in the ordinary course of his employment.

Was Morrisons vicariously liable?

It was the Supreme Court’s view that both the High Court and Court of Appeal had misunderstood the principles governing vicarious liability. The disclosure of the data on the internet by AS did not form part of their functions or field of activities as an employee and it had not been an act which he had been authorised to do. The Court could therefore look at the matter afresh.

Although there had been a close temporal link and an unbroken chain of causation linking the provision of the data to AS, for the purpose of transmitting it to the auditors and his disclosing it on the internet, a temporal or causal connection had not in itself satisfied the close connection test.

The reason why AS had acted wrongfully (whether he had been acting on his employer's business or for purely personal reasons) was highly material. It was clear that AS was not acting to further M’s business but that he was pursuing a personal vendetta, seeking vengeance for disciplinary proceedings some months earlier.

While the five factors listed in Catholic Child Welfare Society v Various Claimants (FC) [2012] UKSC 56, para [35], were present, they were not relevant as AS was an employee and these factors were relevant where the wrongdoing was committed by someone who was not an employee, and to determine whether the relationship was sufficiently akin to employment for the doctrine of vicarious liability to apply.

M was therefore not vicariously liable for the actions of an employee who deliberately leaked the company’s payroll data online

Does the DPA 1998 exclude the imposition of vicarious liability?

Since DPA 1998 neither expressly nor impliedly indicates otherwise, the principle of vicarious liability applies to the breach of the obligations imposed and to the breach of obligations arising at common law or in equity, committed by an employee who is a data controller in the course of his employment.

It was irrelevant that a data controller’s statutory liability under the DPA 1998 is based on a lack of reasonable care, while vicarious liability for an employee’s conduct requires no proof of fault.

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Sarfraz (a protected party suing by his brother and litigation friend) v Akhtar and another [2020] EWHC 782 (QB)

Background

The claimant, defendant and two other men went drinking together in Birmingham until about 1.00 am the following morning. Sarfraz (“S”), Akhtar (“A”) and one of the other men got into S’s car. A drove while S was in the front passenger seat. A drove too fast and hit the central reservation losing control of the car and causing it to roll several times before colliding with a metal gate. S suffered a severe traumatic brain injury in the accident. He sued A and ERS Syndicate Management Limited, who insured S to drive the car. S had not given A permission to drive the car.

The claim against the insurer is brought pursuant to s.151 of the Road Traffic Act 1988 on the basis that the insurer has a contingent liability to satisfy any judgment that might be obtained against A.

The insurer applied for the claim to be struck out, alternatively it seeks summary judgment on the basis that its contingent liability is excluded by s.151(4) of the Act

Strike out the claim and summary judgment

A court may strike out Particulars of Claim pursuant to CPR3.4(2)(a) if the pleading “discloses no reasonable grounds for bringing the claim.” The focus of the enquiry is upon the pleading and the court must assume the truth of the pleaded case. The court must be certain that the case is hopeless before it can be struck out.

A court may give summary judgment pursuant to CPR 24.2:

The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if –

(a) it considers that –

(i) that claimant has no real prospect of succeeding on the claim or issue; or

(ii) that defendant has no real prospect of successfully defending the claim or issue; and

(b) there is no other compelling reason why the case or issue should be disposed of at a trial.

If the claimant has no real prospect of succeeding on the claim and there is no other compelling reason why the case should be disposed of at a trial. Part 24 requires analysis of the evidence, but summary judgment can only be given in clear cases and the court should not weigh competing evidence and make findings upon the papers.

Issues and decisions

An 'excluded liability' is defined by s 151(4) as:

'... a liability in respect of the death of, or bodily injury to, or damage to the property of any person who, at the time of the use which gave rise to the liability, was allowing himself to be carried in or upon the vehicle and knew or had reason to believe that the vehicle had been stolen or unlawfully taken, not being a person who

(a) did not know and had no reason to believe that the vehicle had been stolen or unlawfully taken until after the commencement of his journey, and

(b) could not reasonably have been expected to have alighted from the vehicle. In this subsection the reference to a person being carried in or upon a vehicle includes a reference to a person entering or getting on to, or alighting from, the vehicle.'

The court found that “unlawfully taken” is a reference to the vehicle being taken without authority contrary to s 12 of the Theft Act 1968. Irrespective of whether  S152(4) refers to the criminal offence, the car could not be said to have been 'unlawfully taken' until it had been driven away. Taking possession of the keys, sitting in the driver's seat and even turning the key were all acts that fell short of actually having taken the car.

After the car had been driven off there was no reasonable opportunity for SS to have alighted before the accident.

The Court assumed that S go into the car to prevent A from taking it and he had not allowed himself to have been carried in the car

The application was dismissed.

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Practice and Procedure

Promontoria (Chestnut) Ltd v Steeds and another [2020] EWHC 693 (QB)

This case related to an application by Mr and Mrs Steeds (“S”) for permission to appeal a case management decision in the County Court relating to specific disclosure.

Background

During the hearing of their application, S believed that the Judge’s interventions were hostile and that he embarrassed and belittled their counsel.

S then sought permission to appeal the decision. One of their proposed grounds of appeal was that the County Court hearing was unfair because Judge Gregory did not allow their counsel to address the court properly, alternatively, that the judge displayed apparent bias.

High Court Decision

The court allowed S’ application to listen to the recording of the hearing in the County Court before giving judgment, because the sharpness of exchanges between counsel and Judge, could not be conveyed in the transcript.

The court had to consider whether an informed and objective observer would have concluded that there had not been a fair hearing or there was an appearance of bias from the Judge.

The Court confirmed:

  • judges can test and challenge submissions and can be robust, particularly with counsel
  • being robust is not to be equated with apparent bias and that proactive case management is expected of judge
  • counsel had been able to make her submissions
  • accordingly, an informed and objective observer would not have regarded the Judge’s conduct as denying S a fair hearing or displaying apparent bias
  • it was ‘plainly wrong and thoroughly distasteful for a judge to bully any lawyer’ or any other participant in court proceedings

Practical implications

Recordings may be useful in providing appeal courts with further context as to exchanges between judges and lawyers and other participants in proceedings and may well become a valuable and readily available tool in cases alleging judicial misconduct

A robust judge or difficult hearing must be understood to be different from an unfair hearing or apparent bias.

Practitioners would be well advised to take special care in ensuring that their submissions are cogent so as not to attract unnecessary judicial criticism.

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TMO Renewables Ltd v Reeves and another [2020] EWHC 789 (Ch)

The issue in this appeal is whether one of the liquidators of TMO has waived litigation privilege in respect of an expert report. The Deputy Master held that it had and TMO appealed that finding.

Background

A report was obtained in relation to losses which TMO alleged were caused by breach of contract or fiduciary or statutory duties on the part of the five defendants. The pleaded losses amount to £19.5 million.

After draft particulars of claim was sent in 2017, the fourth defendant asked for an explanation of how the figure was calculated and made reference to the serious potential consequences of exaggerated claims. TMO’s reply stated that they obtained advice from a reputable valuation expert with considerable experience of valuing companies in the relevant sector.

After the claim was issued the fourth defendant applied for security for costs. One of TMO’s liquidators felt that an allegation in the witness statement on behalf of the Fourth Defendant was a slur on his “professional competence.” He filed a second statement to explain the circumstances in which the claim had been valued. In the statement he gave details of the expert who drafted the report and confirmed that a discounted cash flow methodology was used to do the valuation

Court Decision

The main question as to whether there has been deployment of a document is whether the maker of a statement is deploying in court material which would otherwise be privileged.

A mere reference to a privileged document does not of itself amount to a waiver of privilege, even if the document referred to, is being relied on for some purpose.

Reliance in itself is not the test but whether the contents of the document are being relied on, rather than its effect.

Where the maker of a statement does not quote the contents of a privileged document or summarise them, but simply refers to the document's effect there is no waiver of privilege.

If statement makers go too far, they can be given a choice to either leave in the reference and produce the document or take it out and retain privilege.

If the document is referred to in order to persuade the court at an interlocutory stage to take a particular view of the merits of the case (e.g. an application for a freezing order or for summary judgment), this operates as a collateral waiver.

If use of the document can be shown to be made for a limited purpose only at the interlocutory stage, there may be no waiver

In this case:

  • the report was referred to for the narrow purpose of rebutting the allegation that the liquidators could not possibly have believed the pleaded quantum
  • the report was obtained for pleading purposes only and was not intended for use at trial
  • on the security for costs application there was no requirement to look at the underlying merits of the claim
  • the fact that the auditor company and the author of the report and his qualifications were identified, was what he was needed to identify the source of his belief
  • the references to the methods used was also to confirm that the effect of the report was to justify the belief in the £19.5 million figure
  • it is clear that the report was complex and detailed. Referring in two sentences in very broad terms to the methodology, cannot properly be said to be referring to its content, as opposed to its effect on his state of mind, in answer to the allegation that he could not possibly believe the figure

There was therefore no proper basis for the Deputy Master's conclusion that privilege had been waived in respect of the report. The appeal must be allowed and the order for its production set aside.

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Capital Funding One Ltd v Esqulant and another [2020] EWHC 981 (QB)

Background

Capital Funding One (“CFO”) was seeking a charging order over property registered in the names of Mr & Mrs Esqulant (“E”), to be used to satisfy a debt against them. Mr E. Mr & Mrs E were divorced and Mr E had never lived in the property.

Proceedings were initially issued only against Mrs E, but Mr E was later added. Before Mr E was added the Court ordered him to file a statement responding to reference in Mrs E’s statement to a letter written by Mr E confirming that he had no beneficial interest in the property. Mrs E received a copy, but not the claimant or the Court. After Mr E was added to the proceedings, directions were made for filing and serving a witness statement. Mr E did not serve witness statements.

Nearly 3 weeks before the trial, Mrs E asked CFO to include Mr E's witness statement in the trial bundle. CFO did not query the request or request a copy of the statement. Mrs E applied for a witness summons against Mr E to ensure that he would attend the trial. Hard copies of the trial bundle was served. The index referred to the witness statement of Mr E, but the statement itself was omitted.

Mrs E’s skeleton referred to the witness statement of Mr E and quoted from it and referred to a witness summons served on Mr E. At the hearing on 9 September 2019 the Judge gave permission for Mrs E to call Mr E to give oral evidence, but the statement was not permitted.

The Court found that Mr E did not have any beneficial interest in the property. CFO applied for permission to appeal, which was refused.

Court’s discretion to allow the oral evidence of Mr E:

The Court had to look at 5 points:

  1. the reason why the evidence was not put forward before them. Mrs E apprehended that CFO had the statement
  2. the significance of the evidence. Mr E’s evidence was so pivotal that the result of the case might turn upon it
  3. the prejudice to the applicant if the application is refused. It cannot be a prejudice simply because the case was more likely to be proven with the evidence than without it. Not being able to prepare for cross-examination is a real prejudice, but in this matter it was not prejudicial
  4. the prejudice to the other parties if the application is allowed. Excluding the evidence would have meant that Mrs E would not have been able to adduce evidence of potentially decisive importance to her case
  5. the need to do justice to all the parties having regard to the overriding objective. If the evidence had not been admitted, Mrs E would not have had a proper opportunity to present her case.  The prejudice to Mrs E of exclusion of the evidence greatly exceeds any prejudice to CFO of admission of the evidence
  • there was no surprise to CFO as the statement was referred to by Mrs E
  • there was no collusion between Mr and Mrs E to ambush CFO
  • Mrs E’s solicitors believed that CFO had the statement

Mr E did not appear for himself to seek relief from sanctions, but as someone required by Mrs E and under compulsion to attend because of a witness summons;

Permission was still required under CPR 32.10 for Mr E to give oral evidence, but this required explanation from the perspective of the default of Mrs E in failing to serve a witness statement. It did not require permission from the perspective of the disobedience of Mr E in failing to serve witness statements.

Denton Test

A cross notice was filed by Mrs E to allow Mr E’s evidence to be allowed as Mrs E’s witness evidence. As permission should have been sought earlier this was an application for relief from sanctions and the Court applied the Denton test and found that the breach was serious, but that there was a good reason for the breach and evaluating all the circumstances of the case as a whole and dealing justly with the case, relief from sanctions should be granted. 

If an application had been made for relief from sanctions, it would have been granted.

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Zenith Logistics Services (UK) Ltd and other companies v Coury; UUU v BBB [2020] EWHC 774 (QB)

Background

The judgment concerns two cases. One was a commercial claim. Some of the parties had settled and wanted the proceedings stayed on confidential terms by using a Tomlin order which referred to a confidential settlement agreement kept by the parties’ solicitors. The Master declined to allow this and the parties appealed.

In the second case the defendant had threatened disclosure of certain confidential information and the claimant had obtained an injunction saying this would amount to harassment and/or misuse of private information and/or blackmail. The parties settled by way of a consent order where the defendant gave certain confidential undertakings to the court, which related to the defendant promising to keep information secret, a payment plan in respect of some costs and a general release of other claims.

Court decision

In the case of a Tomlin order, the court had no business considering the terms of a schedule (where both parties were represented at least) before the time came for any enforcement proceedings.

A consent order was different since it directly engaged the court’s coercive powers. The parties' proposals for confidentiality did impinge on the open justice principle. The draft order had to be subjected to close scrutiny, to determine the extent of the derogations from open justice that were involved, and the extent to which they were shown to be necessary.

The Court found that the confidential aspects were justified since they related to the private information at issue, or to financial terms.

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Costs

Hutson and others v Tata Steel UK Ltd [2020] EWHC 771 (QB)

The claimants significantly exceeded the budgeted allowances and applied to retrospectively increase their budget. The reason for the increase was that an unsuccessful application by the defendant had caused the procedural timetable to be extended and had caused additional unforeseen expenditure.

The court concluded that the evidence in support of the application was inadequate and the effect of the defendant’s application was overstated. The costs budget was therefore not increased.

Background

This is a group action claim for injuries suffered by being exposed to dust and fumes at work. For costs budgeting purposes the litigation had been divided into different phases. Phase one had spanned 13 March 2018 to 20 March 2020; and phase two then commenced.

The claimants applied to amend their budgeted costs for phase 1 for a Case Management Conference (“CMC”) and Costs Case Management Conference (“CCMC”) by £125,548.82.

During the course of phase one the defendant made an unsuccessful application for limitation to be tried as a preliminary issue. This application, along with judicial unavailability, had caused a case management conference (CMC) and a costs and case management conference (CCMC) to be adjourned for six months.

It was the claimants’ case that the defendant’s application prolonged the procedural timetable by approximately one year and caused unforeseen, additional expenditure to be incurred and was therefore a ‘significant development’ for the purposes of CPR PD 3E, para 7.6.

High Court Decision

Can the court increase the allowances in respect of budgeted costs where the work had already been done, or can such amendments only be made in respect of costs which were yet to be incurred?

Without deciding whether it had jurisdiction the court proceeded on the assumption that it did, and turned to address the substantive merits of the application.

Had there been significant developments?

  • whilst the defendant’s application was unforeseen, its consequences were not significant. Lengthy adjournments alone did not necessarily amount to a significant development
  • the court considered the evidence which was said to support the variation and concluded that it was inadequate
  • the court rejected the argument that all the work required in respect of each CMC was duplicated each time the CMC was listed. This argument was ‘pitching the case significantly too high’
  • some elements of the claimants’ proposed budgets had very significantly exceeded what had been allowed
  • even where a significant development is established, the court has the discretion to decline to approve a revised budget
  • the claimants’ justifications for increasing their budget were painted with such a broad brush that they could not be properly scrutinised
  • it was open to the claimants to attempt to argue that there is a good reason to depart from the approved budget at any detailed assessment hearing

The application to revise the budget was dismissed.

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Ho v Adelekun (No 2) [2020] EWCA Civ 517,

Where Qualified One-Way Costs Shifting (“QOCS”) preclude or limit a defendant enforcing costs against a claimant’s damages can a defendant set off their costs against a claimant’s costs?

The Court of Appeal in Howe v Motor Insurer’s Bureau (No 2) [2017] Lexis Citation 473 held that QOCS did not preclude set-off. The Court found that set-off is not a form of enforcement. CPR 44.14 enables enforcement without the permission of the Court whereas CPR 44.12 requires the Court’s permission to set off costs.

Adelekun, argued that Howe was per incuriam and therefore not binding. The court dismissed this contention and held that they were bound by Howe to rule that QOCS did not preclude costs set off.

Background

Adelekun (“A”) sued Ho (“H”) for damages following a RTA. H did not admit liability and the claim fell out of the portal. Proceedings were issued on 7 January 2015. On 19 April 2017 H made a Part 36 offer of £30,000. On 21 April 2017 the offer was accepted by e-mail and a “Tomlin” order was subsequently made by consent on 24 April. The matter went to Court on costs only

Court of Appeal found that A was restricted to fixed costs of £16,705.15 and H was entitled to her costs for the costs hearing and of the appeals in the County Court and the Court of Appeal.

H sought to set-off her costs against the costs to which A was entitled as part of the settlement of her substantive claim.

Court of Appeal Decision

Jurisdiction to order set off:

There were compelling reasons for constructing ‘enforcement’ within CPR 44.14 as including costs set-off.

The decision in Howe was not made per incuriam and court was bound to hold that there was jurisdiction to order set off.

Both Newey LJ and Males LJ in short concurring judgments expressed the view that this was a point which might merit reconsideration by the Rules Committee. Permission was granted to appeal to the Supreme Court on this point.

Discretion:

The court accepted that set off was appropriate.

The court also held that H was entitled to her costs of the costs hearing at first instance.

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Other news

Amendments to CPR PD 51R

The amendments to CPR PD 51R i.e. the Online Civil Money Claims Pilot came into force on Tuesday 14 April 2020. The amendments apply to all claims submitted to the court after 11 am 14 April 2020. Included within the amendments is the extension of certain aspects of the pilot to any county court hearing centre.

What are the amendments?

Defences and Admissions must be submitted by completing the Form online and be submitted electronically and cannot be submitted by post.

DQ can be considered and the claim transferred by legal advisor instead of a Judge

APIL and FOIL issue guidance on conducting claims during coronavirus (COVID-19) crisis

The Association of Personal Injury Lawyers (APIL) and Forum for Insurance Lawyers (FOIL) have published guidance to assist claimant and defendant lawyers handling personal injury claims amid the coronavirus (COVID-19) outbreak. The agreement stresses the importance of efficient communications. and the guidelines include

  • accepting services via email
  • agreeing to use some form of video conferencing for medical examinations when appropriate
  • extending limitation periods where necessary
  • advice on best practice relating to medical examinations, exchange of evidence and interim payments
  • recommendation that practitioners consent to requests for extensions. They also ask that, where possible, parties should exchange their costs budgets

Ex-solicitor allowed to work in firm seven months after strike-off

The solicitor had been struck off in October after drafting a letter to help a client conceal the extent of a damages settlement from her husband.

Permission was granted for him  to return to be employed by a regulated firm as a marketing and administration assistant. His work will be directly supervised by managing director and in her absence he will not work in the office.

COVID-19: Judiciary website outlines civil circuit court guidance

The Judiciary has published a Civil circuit guidance page, detailing COVID-19 guidance issued in different circuits in England - Midlands, Northern, North Eastern, South Eastern and Western circuits.

Practitioners are encouraged to check the page for specific guidance in relation to the court in which they are litigating. Matters are developing rapidly, so practitioners should check the position regularly.