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Corporate Claims Bulletin January 2018

  • United Kingdom
  • Personal injury claims litigation - Personal Injury Bulletin

16-02-2018

Liability

Cooke v Swansea City Council (2017) EWCA Civ 2142

The claimant, a 78 year old male sustained injury when he slipped in one of Swansea City Council’s 46 car parks. He sought to bring a claim for his injuries under s.2(2) of the Occupier’s Liability Act 1957, which states that occupiers should take ‘reasonable care’ to ensure the ‘reasonable safety’ of visitors to their premises.

The claimant argued that by failing to grit the area as a matter of course in cold weather, or employ staff to report regularly on the condition of the car park, they were in breach of this duty.

The Council’s system for unmanned car parks was to respond to reports of ice from the public, rather than grit every time a freeze was forecast. At such a time they would be focused on gritting the highways and manned car parks.

Employees, who may attend the unmanned car parks from time to time, were not instructed to report on icy conditions.

Judgment at first instance

At trial the court concluded that the “reactive system” in place was reasonable and that there was no breach of duty. The claimant appealed.

Appeal

In upholding the trial judge’s decision the Court of Appeal emphasised the need for there to be a balancing exercise when assessing what is ‘reasonable’.
Four key factors were considered:

1. How likely someone could be injured

The defendant argued that the risk of ice in cold weather is an obvious danger, People out and about in cold weather can be reasonably expected to watch out for ice and to take care. The Car Park did not pose a particular risk compared to any other of the defendant’s car parks. There had been no reports of previous accidents.

2. How severe the injury could be

The defendant conceded that an injury due to slipping on ice may be trivial or serious.

3. The social values of the activity (in this case offering a car park) which gives rise to the risk

The defendant submitted that the car parks provide the useful facility of 24 hour parking. If gritting of unmanned car parks, such as the Car Park, is required whenever there is a report of icy conditions the defendant is likely to have to prohibit their use in all its unmanned car parks in periods of adverse weather, to the considerable convenience of local residents and visitors.

4. The cost of prevention.

The defendant argued that the alternative to closing the car parks would be manning them or arranging regular gritting. Such gritting would have to be by hand and would involve significant use of staff and materials. They submitted that his would be a costly reaction to the risk and would have diverted resources from areas requiring them more.

The court considered that these were compelling reasons. They were of the view that a small car park with low foot fall of Council workers, which was low priority on the gritting schedule did not require the defendant to take any steps beyond their current regime whenever icy conditions were reported.

Appeal upheld.

Practice and Procedure

London Organising Committee of the Olympic and Paralympic Games (in liquidation) v Sinfield

The claimant sustained injury whilst volunteering at the 2012 Games in London. Liability was admitted, leaving quantum in dispute.

Damages for the claimant’s injury were eventually agreed in the sum of £16,000.00.

The claimant owned a property with a 2 acre garden which required maintaining. The claimant stated in his preliminary schedule of loss that prior to the accident he had done the larger proportion of the gardening, assisted by his wife. However, since sustaining the injury the claimant could not assist his wife and had hired a gardener. He stated that the gardener assisted for 2 hours per week in the winter and 4 hours per week in the summer, at a rate of £13 per hour. For the period from 9 September 2012 to the date of the schedule the claimant put forward a figure of £4,992.00 plus interest in the sum of £79.87.

At paragraph 8 of the schedule it stated:

“The claimant would probably at some point have required assistance with gardening and employed a gardener in any event whilst continuing to do some work himself. Presuming the Claimant’s ability to carry out gardening would have reduced as he got older, perhaps managing 2 hours per week initially future gardening is claimed at one hour per week”.

Damages for future loss were pleaded at £8,961.31. Bringing the total claim for gardening to the sum of £13,953.31 (excluding interest). The total value of special damages claimed was £33,340.86, therefore the gardening element equated to 41.9% of the total special damages claimed and 28% of the damages overall.

When the time came for disclosure, the claimant served a list of documents which stated:

“I certify that I understand the duty of disclosure and to the best of my knowledge I have carried out that duty. I further certify that the list of documents set out in or attached to this form, is a complete list of all documents which are or have been in my control and which I am obliged under this order to disclose.

I understand that I must inform the court and the other parties immediately if any further document required to be disclosed by Rule 31.6 come into my control at any time before the conclusion of the case.”

Items 14-15 on the list were referred to as ‘Invoices Mervyn Price – Gardener’ for the periods October –November 2012 and March – November 2013 respectively. Items 16 – 20 were described as ‘Invoices Dan Hardy – Gardener’ for the periods March – November 2014, March – November 2015, March – May 2016, June 2016 and July 2016.

An updated Schedules of Damages was served by the claimant in September 2016 maintaining the claims for past and future losses. With adjustments for losses the claim for gardening now stood at £14,785.31.

In October 2016 witness statements were exchanged. At paragraph 30 of the claimant’s statement the claimant said the following:

“Pre accident Christine and I did all the gardening. We have a 2 acre garden which needs a lot of upkeep. Christine does some of the garden but it is impossible for her to do it alone and so we now employ a gardener. Over the winter months the gardener only does a couple of hours a week, but in the summer months this increases to 4 hours per week”.

The defendants were of the view that something was amiss and took a statement from the gardener, Mr Price.

In September 2016 Mr Price provided the statement (which he would later support orally at trial) where he stated that he did not produce the invoices which the claimant had referred to in his list of documents. Furthermore, he had worked for the claimant since 2005.

In 2014 when he retire, Mr Price reduced his hours to 4 per week for 11 months of the year and 2 per week in January. His hours had not changed after the claimant’s injury. He went on to say that the claimant’s statement was not true in relation to the gardening and he felt it was important to set out the correct position.

The defendant then pleaded fundamental dishonesty.

In response the claimant drafted a supplementary statement. In this statement he accepted that paragraph 30 of his first statement was worded ‘badly’. He said that he and his wife had done a lot of gardening, and that after the accident he was unable to do any of it. He also admitted preparing the invoices himself, stating that:

“In my business if we pay someone by cheque but they do not raise an invoice we prepared the invoice for the same amount. This is known as self-billing. I was only trying to show what I had paid Mr Price”.

An updated schedule was served in March 2017, the gardening head of loss was reduced to £1,657.99 for gratuitous assistance, as he accepted that he probably would have required assistance in the garden in any event within 3 years of the date of the accident.

Judgment at first instance

The defendant continued to plead fundamental dishonesty, seeking dismissal of the claim under the Criminal Justice and Courts Act 2015 s.57.

The judge rejected the defendant’s arguments, finding that the claimant had not been dishonest, but rather “muddled, confused and careless”, in relation to the first schedule. He had been dishonest in creating false invoices and in stating in his witness statement that the accident had caused him to employ a gardener for the first time. The dishonesty however did not contaminate the entire claim.

This was a genuine claim for personal injury, it just “went wrong”. The claimant was careless and then dishonest.

The judge found the claimant not to be fundamentally dishonest, but had he been, that it would have been unjust for the claim to be dismissed for dishonesty relating to a peripheral part of the claim as the remainder of it was genuine.

Total award £27,750.00.

Appeal

Correct approach to Criminal Justice and Courts Act 2015 s.57:

Where an application is made by a defendant for dismissal of a claim under s.57, the court should firstly consider whether the claimant is entitled to damages. If not then this is the end of the matter and QOCs should be disapplied under CPR r.44.16.

If the claimant is found to be entitled to damages, the judge must determine whether the defendant has proved on the balance of probabilities that the claimant was fundamentally dishonest in relation to the primary claim and/or a related claim and that he had substantially affected the presentation (in respect of either liability or quantum) in a way which potentially adversely affected the defendant in a significant way, judged in the context of particular facts and circumstances of the litigation.

If the judge is so satisfied the claimant has been fundamentally dishonest, he has to dismiss the claim, including any element of the primary claim which appears to be honest. Unless, as per s.57(2) he was satisfied that the claimant would suffer substantial injustice.

“Substantial injustice” has to mean more than the mere fact that the claimant would lose his damages for the honest heads of loss. This is due to s.57(3), which was plainly intended to be punitive and act as a deterrent to dishonestly exaggerated claims. If claimants were permitted to retain their ‘honest’ damages this would water down the effect of s.57(3).

The claimant did not put forward any evidence of substantial injustice.

The appeal court concluded that both pieces of dishonesty in this claim were pre meditated and maintained over many months. Had it not been for the defendant’s actions the claimant was unlikely to recant the heads of loss he had pleaded. This would have resulted in the defendant paying out far more than in would have done on honest evidence.

Claim for damages dismissed under s.57(2).

Angus Watson v Nationwide Accident Repair Services Limited (unreported)

The matter concerned claims for both personal injury and hire charges, which on their own came to £17,000.00. The defendant succeeded on liability, meaning that both heads of loss were dismissed.

The claim was subject to QOCS, giving the claimant costs protection, therefore in principle the defendant was not entitled to their costs. However, as the credit hire company, Progress Vehicle Management Limited had a financial benefit in the claim the defendant pursued a third party costs order against them. There was no suggestion of dishonesty by any of the parties in the proceedings.

The defendant recovered 100% of the costs of defending the claim and making the application. The court found:

1. Prestige Vehicle Management had a significant financial benefit in the claim seeking to recover in excess of £17,000.00 in credit hire. Recovery of the hire charges from the claimant would be to go against standard business practice;

2. Prestige Vehicle Management had ultimate and total control over the litigation which was demonstrated by their terms and conditions. The credit hire company was “locked together” with the litigation.

This case presents a warning to credit hire companies that they cannot hide behind QOCS and use the claimant’s personal injury claim to provide them with protection from liability for the defendant’s costs.

Lion Walk Ltd v Singh (unreported)

The dispute was as to whether the defendant had paid £75,000.00 cash to the claimant. To support his defence the defendant disclosed a number of documents which were purportedly “receipts” signed by the director of the claimant’s company, acknowledging receipt of the money.

The claimant challenged the validity of the documents, disputing that the signatures on the documents were genuine. To support their challenge they applied to the court to have the documents assessed by a handwriting expert.

The defendant contested the application, submitting that CPR r.32.19 provided a timetable for a party to challenge the authenticity of the other parties disclosure. They argued that failure to challenge the documents under CPR r.32.19 was tantamount to accepting the documents as authentic.

The claimant responded that it could not have deemed to have accepted the authenticity of fraudulent documents as authentic and therefore had not breached the deeming provision in r.32.19.

Application granted.

The court held that, although the defendant was right to say that there had been non-compliance with r.32.19, it would be contrary to the interests of justice for the court to allow the case to proceed in the knowledge that there might have been fraud.

Despite the failure it was in the interests of justice to allow the claimant to have the document assessed by a handwriting expert, where the signature itself was being challenged and to also challenge the authenticity of the documents at trial.

May v Wavell Group Ltd (unreported)

The claimant, guitarist Brian May, appealed against a detailed assessment of costs following his acceptance of the defendant’s part 36 offer, in a private nuisance claim.

The parties involved in the action were neighbours and the claim stemmed from noise generated by construction work on the defendant’s residential property.

The claim for damages was brought for more than £50,000.00, but less than £100,000.00. The claimant accepted a Part 36 for £25,000.00 at which point a defence had not yet been filed.

The claimant’s produced a bill for costs for just over £208,000.00. The costs judge reduced the sums, after assessing the reasonableness of individual items of costs and then further reduced them to take account of proportionality and early settlement.

He made a costs order of £35,000.00 plus VAT.

The test

The rules require a costs judge, when assessing costs on the standard basis, to assess on an item-by-item basis whether the costs were reasonable, having regard to, among other things, the factors in r.44.4(3), and to then consider whether the total figure was proportionate having regard to the definition of that word in r.44.3(5).

Reasonableness is a matter of judgement rather than discretion and requires a judge costs to attribute weight to each of the factors in r.44.3(5), a) through to e):

(a) the sums in issue in the proceedings;

(b) the value of any non-monetary relief in issue in the proceedings;

(c) the complexity of the litigation;

(d) any additional work generated by the conduct of the paying party; and

(e) any wider factors involved in the proceedings, such as reputation or public importance.

In addition, the word proportionate was intended to have consistent interpretation across r.44.3(2), r.44.3(5) and r.44.4, which means that the court was to have regard to all the circumstances, including, but not limited to, the further factors specified in r.44.4(3), even though these are not specifically referred to in r.44.3. The costs judge has to take a step back and look at the whole picture.

An objective balance should be reached to achieve the policy objectives of compensating the receiving party for their expenditure without requiring the paying party to pay more than the litigation warranted. This means that costs might be proportionate even if they exceed the sums in issue.

It is good practice for a costs judge to have both tests (reasonableness and proportionality) in mind when carrying out an assessment, but continue to cross-check the figures to see whether they fell within the range of proportionality and then make an adjustment if necessary.

It is not a case of a costs judge bypass an item by item assessment in favour of a global figure which they consider to be proportionate.

Appeal

The claimant appealed on the basis that the judge had incorrectly interpreted and improperly applied the test of proportionality under CPR r 44.3(5).

It was deemed on appeal that the costs judge had considerably undervalued the sums in issue and given too little weight to the complexity of the litigation. He also took into consideration the early settlement and reduced the costs to account for this.

A new assessment was undertaken, with a proper assessment of the factors under CPR r.44.3(5). Greater weight was given to the sums in issue, the complexity of the litigation. The notional reduction for early settlement was discounted.

The reduction on an item-by-item basis assessment was unusually large, albeit unchallenged on appeal.

When the reasonable costs were compared against a value of between £50,000.00 and £100,000.00 in what was considered to be reasonably complex claim, requiring specialist expert evidence, in what was expected to be hard fought litigation, they suddenly appeared less disproportionate.

The court fees and the costs of drawing the bill were not reduced and a smaller reduction was applied to the expert’s fees than to the profit costs, reflecting the essential part played by expert evidence.

The proportionate figure was £75,000.00 plus VAT.

Accident Exchange Limited, Automotive Insurance Solutions Group PLC v Colin McLean, Suzanne Forrest, Morgan Cole (a firm), Morgan Cole LLP, Neil Forsyth, Keoghs (a firm), Keoghs LLP, Melanie Mooney, Lyons Davidson (a firm) and Neil Partridge [2018] EWHC 23 (Comm)

Background to the substantive claim:

The claim concerns the activities of a company called Autofocus Limited (“AF”), which is now in liquidation.

When it was operational it provided forensic services for cases where questions arose about hire rates recoverable by a claimant, hiring a vehicle on credit terms, after an accident. AF produced thousands of such reports and according to the claimants, between 2005 and 2010 AF’s evidence was used in around 4,700 cases.

The insurers of the defendant drivers wanted to show that the credit hire rate was higher than the Basic Hire Rate (“BHR”), so AF produced reports for them about the BHR comparable vehicle.

The reports purported to contain the results of the research and surveys carried out by AF.

In 2009, in the case of Glossop v Salvesen Logistics Limited it became apparent that an employee of AF had falsely claimed to have based the evidence on information from car hire companies who had been contacted about their hire rates.

The first defendant and the second defendant were directors of AF. The other eight defendants are solicitors who acted for defendant drivers facing claims by the claimants’ clients to recover the hire charges for replacement vehicles.

The claimants allege that this reflected the common practice of AF. They submitted that in the years before AF finally went into liquidation in 2010, it was involved in “systemic and endemic” fabrication of evidence about rates and the research carried out, so as to deceive business such as those owned by the claimants.

The claimants brought the action against AF for damages for conspiracy and deceit. Alleging that between 2005 and July 2010 they were party to a scheme, or schemes, to produce false or misleading information and deploy it in litigation against the claimants in settlement of negotiations.

The applications

In June 2016 it was ordered that the parties give standard disclosure, but that generally documents relating solely to conduct and disposal of individual credit hire claims should be disclosed in respect of a sample of cases.

Issues about disclosure lead to two applications being put before the court.

1. The claimants brought applications against the solicitor defendants in which it seeks inspection of documents over which the solicitor defendants assert privilege on behalf of their clients. The key issue being whether the documents are protected by the so-called “iniquity exception” defeating any claim for privilege.

The iniquity exception, also known as the ‘crime-fraud exception’ (which can be misleading as it is not restricted to criminal or fraudulent activities) is where a person consults a solicitor in furtherance of a criminal purpose, whether or not the solicitor knowingly assists in the furtherance of such purpose, the communications between the client and the solicitor do not attract legal professional privilege.

This principle is not confined to abuse of the client/solicitor relationship for criminal purposes, but extends to civil fraud or other equivalent underhand conduct, which is a breach of the duty of good faith, or contrary to public policy or the interests of justice.

2. Morgan Cole and Lyons Davidson applied for disclosure of documents held by solicitors who were instructed to pursue claims in the names of the claimants’ clients to recover credit hire charges. Here the issue was whether the documents were in the control of the claimants, and whether their clients had privilege in the documents which protects them from being disclosed.

In relation to the first application, the court considered that the iniquity exception did not apply to the documents which the claimants sought to inspect.

In previous cases in which third party iniquity had deprived an innocent client of the protection of privilege, the wrongdoer and the client had had a relationship, nexus, or close connection, separate from the dealings with a solicitor, and that relationship was used by the wrongdoer to advance the wrongdoing.

In this case AF’s wrongdoing was ‘parasitic’ upon an existing client/lawyer relationship, which has been created for normal and legitimate purpose. The claimant’s application was refused.

In relation to the second application, the court looked at clause 4.21 of the rental agreements entered into between the claimants and their clients provided:

“We may instruct an Appointed Representative in Your name and You authorise him to provide Us with all the information about the Claim (including copies of all relevant documents) which We reasonably require”.

This clause only provided for the client to waive privilege to the extent that the claimants could receive the relevant information and documents. It did not provide for a wider waiver of privilege entitling  the claimants to provide the information and documents to third parties.

The privilege could not be waived by one of the privilege holders alone, and the claimants were not to be regarded as primary privilege holders or as having the power or authority to waive that privilege. AF’s application was also refused.

The case is listed for trial in October 2018.

Other news

MOJ put on notice by information commissioner

The MOJ has become the first central government department to be served with an enforcement notice by the Information Commissioner’s Office (“ICO”).
It was ‘told off’ back in December for delays in responding to ‘subject access requests’ (inquiries from individuals on data held about them). The Data Protection Act 1998 requires data controllers to respond to such requests ‘without undue delay’.

The notice stated that the ICO has considered a large number of complaints about the department’s handling of the subject access requests. In July 2017 there was a backlog of 919 such requests, some dating back to 2012.

'The commissioner takes the view that damage or distress to individuals is likely as a result of them being denied the opportunity of correcting inaccurate personal data about them, which may be processed by the data controller, because they are unable to establish what personal data are being processed within the statutory timescale.’

The notice also cites article 8 of the European Convention on Human Rights, stating that the 'right to respect for private and family life, home and correspondence… has been unlawfully interfered with by reason of the failure of the data controller to respond to subject access requests in compliance with the DPA’.

Among other measures, the notice requires the secretary of state for justice to inform the individuals with outstanding requests by 31 October 2018 whether any personal data about them has been processed and to supply each of them with a copy of any such personal data so processed. The secretary of state must also provide the commissioner with a monthly progress report.

MOJ spending huge sums on consultants help to deliver digital courts

Critics have expressed concerns over the sums being spent and the lack of detail about contracts as well as a history of failure and delays in government IT projects.

£30m is being paid to PwC as part of a £1bn drive to modernise the courts and expand the types of hearings that can be conducted via computer.

Another contract, to the tune of £1.3m, has been won by consulting firm Methods.

NHS compensation payouts 'unsustainable', say health leaders

Payouts given to NHS patients who have been victims of negligence should be reduced because they are “unsustainable”, health service leaders have told the Justice Secretary.

The change in the discount rate from 2.5% to -0.75% has heavily impacted the level of damages which are now being paid out in medical negligence claims. As a general rule, the larger proportion of these claims are for future care, the costs of which can add up to millions of pounds. The payout in 2017 rose to 1.7bn, with the annual costs almost doubling since 2010/11. The first case settled under the new rules saw an NHS trust forced to nearly triple its payout to a 10-year-old girl left with cerebral palsy from £3.8m to £9.3m.

NHS services leaders argue that the impact of the amounts being paid out are having a negative impact upon the money which the NHS can put towards basic care. They are calling for “more fundamental reforms” such as introducing fixed-costs schemes for claims up to the value of £250,000. Government proposals currently only suggest caps up to £25,000.

In response, a Ministry of Justice spokesperson said: “All personal injury victims should of course be fully compensated, but the costs involved should also be proportionate.

“To help ensure this happens, we have set out proposals for a fairer way of setting the personal injury discount rate, as well as asking the Civil Justice Council to look at measures to control costs in clinical negligence cases.”

The spokesperson added that the ministry will soon be responding to the justice select committee’s report on their proposals to reform the way the personal injury discount rate is set.