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Eversheds Sutherland’s Corporate Claims Bulletin - January 2019

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

18-02-2019

COSTS

JLE v Warrington & Halton Hospitals NHS Foundation Trust [2018] EWHC B18 (Costs)

The claimant, after winning the substantive action, submitted a Bill of Costs in the sum of £615,751.00.

The claimant made a Part 36 Offer to the defendant for those costs in the sum of £425,000.00. The Offer expired a few days before the Detailed Assessment.

At the Detailed Assessment, Master McCloud awarded the Claimant £421,089.16 plus interest in the sum of £10,723.89, making total of £431,813.05.

The defendant brought the Master’s attention to the penalties given under Rule 36.17(4) (a) to (d) and argued that it would be unjust to award the 10% uplift they provide, as the claimant had only beaten her Part 36 by a small amount (nearly £7,000.00), as opposed to the roughly £43,000.00 windfall she would receive if the penalty was imposed.

The claimant responded that the Court did not have the power to sever the penalties in 36.17(4). They had to be dealt with together. The penalties were there to incentivise settlement.

Master McCloud was unable to point to a ruling on the point, but the authorities indicated that the penalties were severable and should be judged against whether it would be unjust to enforce them. She concluded that “the proportionality of the cost penalty must be applied separately for each of the sub rules in 3.17(4)”:

(a) interest on the whole or part of any sum of money (excluding interest) awarded, at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired;

(b) costs (including any recoverable pre-action costs) on the indemnity basis from the date on which the relevant period expired;

(c) interest on those costs at a rate not exceeding 10% above base rate; and

(d) provided that the case has been decided and there has not been a previous order under this sub-paragraph, an additional amount, which shall not exceed £75,000, calculated by applying the prescribed percentage set out below to an amount which is—

(i) the sum awarded to the claimant by the court; or

(ii) where there is no monetary award, the sum awarded to the claimant by the court in respect of costs—

“It is only where the cost penalty created by the 10% rule would be clearly disproportionate that one would incline to exercise the discretion to waive it… but that said, if the Court was unduly unwilling to exercise its discretion on facts such as these – for example requiring something akin to ‘exceptional circumstances’ – then a party in the position of the defendant might be discouraged from taking the risk of legitimately going as far as assessment as all, despite having various meritorious objections to the bill as drawn and which have (in this case) been shown in many instances to be correct”

She concluded that to award the 10% would be disproportionate and it would be unjust to award it.

Miss Seyi Adelekun v Mrs Stu Lai Ho 2018 WL 07019052

His Honour Judge Wulwik sitting in the Central London County Court has ruled that there was no reason for the Judge in the first instance to interfere with the costs agreement between the parties in this claim.

The substantive claim arose from a road traffic accident in 2012. The claim was commenced in the MOJ Claims Portal, but as the defendant did not admit liability the matter left the Portal.

The claimant issued proceedings in December 2014.

The claimant issued an application in January 2017 requesting that the claim be re-allocated to the multi-track, however five days prior to the application hearing the defendant made a Part 36 Offer of £30,000.00. The Defendant also indicated that they would consent to the application.

Later in the week, the claimant accepted the Part 36 Offer.

The parties prepared a Tomlin Order which provided that the defendant would pay the claimant’s reasonable costs on the standard basis.

The claimant sought costs of £42,856.34 and the parties were unable to agree whether fixed costs applied.

Deputy District Judge Harvey was of the view that fixed costs did apply, but that it was for the claimant to argue on Detailed Assessment that she should recover costs in excess of those given in the fixed costs regime due to exceptional circumstances.

The claimant appealed, arguing that the parties had made a contractual agreement and therefore the DDJ did not have any power to vary it. HHJ Wulwik upheld the appeal. The defendant had agreed that the matter be allocated to the multi-track before the Tomlin Order was signed by the parties. Therefore, the costs element of the Tomlin Order was entirely consistent with the matter being allocated to the multi-track. He could see no grounds for the Order being varied or why the Court should not give effect to the parties’ agreement.

The defendant is seeking permission for a second appeal.

PRACTICE AND PROCEDURE

Caine v Advertiser and Times Limited [2019] EWHC 39 (QB)

The claimant claimed in libel against the defendant. On 9 May 2017, the claimant issued the Claim Form, but did not serve it until 5 October 2017, over a month outside of the four month period allowed for service.

The defendant filed and served their Acknowledgement of Service on 19 October 2017, but did not raise any issues concerning jurisdiction until 7 November 2017, when they issued an application to strike out the Claim Form. The defendant argued that the claimant had failed to comply with a rule or Practice Direction i.e. CPR 3.4 (2) (c). Therefore the matter should be struck out.

On 14 May 2018, the claimant argued that the defendant had accepted the jurisdiction as they had failed to challenge the Claim Form within 14 days of filing and serving the Acknowledgement of Service, as set out in CPR 11, the Rule which provides guidance on challenging jurisdiction.

The defendant applied for a retrospective extension of time for its application to challenge service on 18 May 2018. Or alternatively, relief from sanctions under CPR 3.1 (2) (a) and CPR 3.9.

In response, the claimant applied for a retrospective extension of time in which to serve the Claim Form.

At first instance, Master Yoxhall took the view that the authorities which required a defendant to use CPR 11 to challenge a Claim Form served out of time were wrong. Instead a defendant should use CPR 3.4 for that challenge, but in any event, they should be granted an extension of time/relief from sanctions. As a consequence he held that the claim should be permanently stayed. The application to extend time to serve the Claim Form was rejected.

The claimant appealed.

Dingemans J heard the appeal and held:

  • The Court of Appeal authority of Hoddinott v Persimmon, which required parties to use CPR 11 when asking the Court not to exercise its jurisdiction, was binding.
  • Consequently, the Master was wrong and therefore the defendant could not use CPR 3.4
  • On the facts, however, the joint effect of the defendant’s two applications was a challenge under CPR 11, insofar that:
    • the substance of the defendant’s November application was to challenge service
    • the defendant’s May application sought relief expressly from the sanctions under CPR 11
    • although neither was made under CPR 11, the May application was a response to the claimant’s CPR 11 argument

 

  • The defendant’s application was not within the requisite 14 days of the Acknowledgement of Service, but the Master correctly exercised his discretion to grant an extension of time because:
    • the defendant raised the service issue in correspondence immediately on receipt of the Claim Form
    • the defendant made an application (albeit the wrong one)
    • the Master had noted that only an extension of five days was needed
    • the defendant then responded to the claimant’s argument on CPR 11 as soon as they were raised

 

  •  The Master was right to reject the claimant’s application for an extension of time because:
    • the strict tests in CPR 7.6(3) applied to this request
    • the claimant had taken no steps to comply with the four-month period for service before it expired.

The claim should remain permanently stayed.

What should we take from this?

  • Any challenge must be made under CPR 11
  • There are legitimate criticisms about this route as CPR 3.4(2) and 2.3(1) do give the Court powers to strike out a statement of case
  • If in doubt, make applications in the alternative!

Stephen Mays (a Protected Party by his Litigation Friend, the Official Solicitor) v Drive Force (UK) Limited [2019] EWHC 5 (QB)

The claimant sustained a Traumatic Brain Injury (“TBI”) and serious orthopaedic injuries as a result of falling 3 metres from the top of a lorry on 12 June 2013. The injuries were life changing, the claimant no longer has capacity and cannot carry out paid work.

The defendant admitted liability on 3 April 2014.

During the CCMC on 5 December 2018, the defendant requested permission to adduce evidence on life expectancy. The claimant opposed the request. As a result, the Master requested that the parties submit written submissions.

At this stage the claimant, valuing the claim at more than 2 million pounds, already had permission to obtain reports from a:

  • Consultant Neurologist
  • Neuropsychologist
  • Consultant Neuropsychiatrist
  • Consultant Orthopaedic Surgeon
  • Consultant Ophthalmic Surgeon
  • Care and Case Management expert; and
  • Deputy Cost expert.

The defendant, who valued the claim between 1 and 2 million pounds, had permission to rely on the evidence of a:

  • Consultant Neurologist
  • Consultant Neuropsychologist
  • Consultant Ophthalmic Surgeon
  • Care and Case Management expert; and
  • Deputy Cost expert.

It was estimated that it would cost £15,000.00 per party to instruct a life expectancy expert.

The defendant argued that if the claimant had co-morbid conditions (he was a smoker, considered obese, had hypertension and ulcerative colitis) in addition to the index accident, the Court should have access to evidence in this issue. In the defendant’s view, it would have an impact upon the future loss element of the claim.

The claimant counter argued that life expectancy is generally treated as a clinical matter. It would set a precedent if life expectancy evidence was permitted to deal with non-accident factors.

Interestingly, the claimant’s Neurologist had already commented that there were a number of co-morbid factors which he was not able to address, as they were outside his expertise.

The Master considered the arguments posed by both parties, but concluded that the case law makes it clear that in an appropriate case the court should consider whether factors other than the index event impacted on the claimant’s life expectancy, and is likely to be assisted by expert evidence in that regard. He was not convinced that by allowing this evidence the ‘floodgates’ would be opened as the claimant argued.

The question which was then posed was who should provide the evidence?

The Master concluded that statistical evidence has a part to play, alongside the evidence provided by the clinicians. It would be considered admissible in an appropriate case (although he did not define ‘appropriate case’).

Both parties were granted permission to obtain life expectancy evidence.

What should we take from this?

  • In high value cases, life expectancy evidence may make a significant difference to quantum.
  • Statistical evidence may be admissible alongside that of clinicians in an appropriate case.
  • Ultimately, it will be a matter for a the trial judge to determine whether statistical evidence is of assistance.

Hughes Jarvis Ltd v Searle [2019] EWCA Civ 1

A witness was warned not to discuss his evidence with anyone, during an overnight adjournment whilst he was under cross-examination. The witness failed to obey these instructions by sending emails to and having conversations with a Consultant for guidance on the issues being tried. As the matter was being dealt with by the County Court, the Judge’s powers were limited to the County Courts Act 1984 and the CPR in relation to contempt.

When the Judge discovered the contempt (the witness had contradicted his evidence in chief) the respondent applied to strike out the claim.

The witness was sentenced the next day to 14 days’ imprisonment, suspended for three months.

The witness appealed against the committal order both on jurisdictional and procedural grounds.

The order under appeal recited that the judge had made an order on 25 April that the witness should not “communicate with his legal representatives or speak to anybody about his evidence in these proceedings while he remained under oath” and that the order was breached by the sending emails and having telephone conversations with the Consultant.

On appeal, Patten LJ found that the trial judge was unjustified and wrong in her approach.

By the end of the first day of the trial and before he had spoken to the consultant, the witness had already given his evidence-in-chief and had been cross-examined on a considerable part of it. This included evidence relevant to the counterclaim. Although the witness should not have spoken to anyone, the only purpose of the conversation with the Consultant was to get his opinion the effects of the potential outcome of the trial on his business, in the event that the claimant failed to obtain a possession order against the defendant.

This was opinion evidence from a third party on an issue on which the witness had previously been asked a hypothetical question and had expressed his own view. The witness then attributed his own change of opinion to what the Consultant had told him. He had identified the source of information, therefore the judge was free to attach either some or no weight to it at all, given that the Consultant was not going to be called as a witness. That did not mean that the evidence was untrue.

He then went on to make the following observations:

  • Witnesses are frequently given warnings by the trial judge not to converse with others about their evidence until after it has been completed. It protects the witness and the effectiveness of the trial process.
  • If however a witness fails to comply with the judge’s warning, it is necessary for the judge to make an assessment of the damage which it has caused.
  • If the witness has attempted to obtain information about something by email, but the email was not responded to then no damage has in fact been caused to the integrity of the trial process.
  • As regards to the conversation or conversations in this matter, the judge in the first instance took the view that this was a deliberate attempt by the witness to improve his evidence. Consequently, it meant that she could not treat any of his evidence as either credible or reliable.
  • None of what the Consultant had said touched on any of the issues relating to the counterclaim. The only basis on which the judge could treat the witness evidence on those issues as unreliable was to infer that because the witness had sought clarification about some issues, he was somehow to be treated as having given false evidence on every other issue. This was unjustified and wrong. There was no proper basis for the judge to draw any such inference, particularly in the light of the fact that the witness had been open about how he obtained the new information.
  • The judge should have investigated precisely what the limits were and the purpose of the conversations which took place and to give the witness an opportunity, if he wished to take it, to put in evidence about what had occurred. Instead the position taken was to deal with the contempt, adopting a summary procedure which denied the witness an opportunity to obtain legal advice, or of explaining himself in evidence.
  • The judge in the first instance did warn the witness about why it was important not to discuss the claim, but did not warn him that he would be in breach of a court order and in contempt of court.
  • The obvious sanction open to a judge who finds that a witness has communicated with a third party about his evidence during the course of a trial is to ascertain what was discussed, and if appropriate, to discount or give no weight to the evidence.
  • Cases are not struck out half way through a trial on the basis that they may not succeed. The judge needs to hear all of the evidence and then decided (and dismiss if necessary) the claim on its merits.

The Committal Orders were set aside and the matter was not struck out.

David Ellis v Heart of England NHS Foundation Trust [2018] EWHC 3505 (Ch)

The claimant brought an action in clinical negligence against three defendants in respect of treatment he received in 2013, which left him with life changing injuries. These injuries could have been prevented had each of the three defendants approached his symptoms in a different way than they had.

In relation to the proceedings, the claimant agreed a second extension of time for service with the first and second defendants, but not the third. Subsequently the third defendant pleaded limitation in their defence, which prompted the claimant to make an application under Section 33 of the Limitation Act 1980.

The third defendant, in their rebuttal of the claimant’s application, argued that “Denton” type principles should be considered by the court when applying their discretion under Section 33. They argued that the court should look at the entire period of delay in the claimant bringing the action against the third defendant and not simply the seven months of delay between the expiry of the agreed extension of time for issue of proceedings and the actual date of issue. Further, they submitted that the claimant had not set out their position at the earliest opportunity, as when the particulars of claim were served they contained new information which the third defendant was not aware of. Finally, they argued that there was prejudice to the third defendant as a result of the totality of the delay, which lead to a dimming of memories from the passage of time. Any prejudice to the claimant would be limited by virtue of the fact that they still had an action against the first and second defendant.

Their arguments were rejected by the judge, who responded:

“I am not persuaded by these arguments and I have no hesitation in concluding that having regard to all the circumstances of the case…it is equitable to allow the claim against the third defendant to proceed”.

He gave the following reasons for this conclusion:

  • The Court’s discretion under Section 33 is unfettered and requires the Court to look at the matter broadly.
  • The third defendant was attended by the claimant to discuss the delay in treatment with them, which would have put them on alert that a claim could be coming.
  • A formal claim form was served in May 2015, which prompted the third defendant to notify the Medical Protection Society.
  • The third defendant formulated a Letter of Response to the Letter of Claim.
  • The third defendant had already agreed one extension of time, therefore could not argue, at that stage at least, they were not content that the extension would not prejudice the third defendants’ ability to defend the claim.
  • The third defendant failed to identify any prejudice which they have suffered or will suffer.
  • The claimant on the other hand would suffer heavy prejudice.

The claimant’s application was granted.

What should we take from this?

  • A defendant arguing that they will be prejudiced if a claimant’s S33 application is granted will need to provide actual evidence that they will suffer prejudice.
  • A defendant who has already engaged with a claimant on the issues will struggle to argue prejudice.
  • If an extension for time has already been granted, it is likely that the court will consider that the extension will not prejudice the defendant’s ability to defend the claim.
  • Courts tend to side with the claimant when limitation arguments are raised, but this should not prevent a defendant from raising them, providing they can support their arguments.

Gary Joseph McDonald v Michelle Rose and others [2019] EWCA Civ 4

The Judge handed down his written judgement on 9 March 2018, having circulated a draft judgement on 7 March. The parties had been notified in advance of the judgment that they would not be required to attend.

On 8 March the applicant’s solicitors wrote to the court to advise that they were considering seeking permission to appeal. They asked the judge to formally adjourn the hearing to enable the application, but did not seek an extension of the 21 day time limit provided for in the rules under CPR 52.12.

On 9 March, having handed down the judgment, the judge ordered that the parties provided written submissions on consequential matters within 14 days, i.e. 23 March.

By email on 13 March the court notified the parties that the application for permission to appeal had been adjourned for 14 days from the 9 March and was to be dealt with in the written submissions.

The parties filed their submissions on 23 March, with the appeal being only one of the issues. In their response, the defendants opposed the appeal application and opposed any extension of time for the filling of an appellant’s notice beyond 30 March.

It was apparent that the claimant’s solicitors were not alerted to the risk that, without an extension, the 21 day time limit expired on 30 March.

The judge considered the written submissions on 18 April, refusing permission to appeal and making an order to that effect.

On 9 May the applicant filed the appellant’s notice, the last possible day if 21 days began on 18 April.

On 21 May, the applicant sought to retrospectively extend the 21 day period, although maintained that the 21 days did not begin until 18 April.

The default position set out in the CPR is that the time limit for filling a notice of appeal is 21 days from the date of the decision in question, but that time can be extended (or reduced) by the lower court.

The key authorities (Sayers v Clarke Walker in particular) state that the date which the 21 days starts to run is the date that the decision is formally announced and not the date which the formal order is received.

That gives rise to the question of how an application for permission to appeal should be made in a case where judgment in reserved or handed down in the parties’ absence.

The normal practice is for the party wishing to appeal to make the application in writing between the judgement being circulated in draft and the hand-down hearing. The application is then treated as being made “at” the hearing. If no application is made, then the lower court is no longer seized of the matter and cannot consider any retrospective application for permission.

Where a party wants more time to consider whether to appeal, the party is to request further time to appeal in writing, then the court may adjourn the hearing to give that party the opportunity to do so and for written submissions to be made. Then when the judge has granted or refused permission, he should make a direction extending the period within which Notices of Appeal should be filed.

An extension of time for filing an appellant's notice could also be required in any other situation where a permission decision was not made at the decision hearing. The length of any extension should normally be until 21 days after the permission decision, but the judge should consider whether that length of extension was really necessary in the particular case.

As the applicant failed to apply to extend the 21 day period (which began on 9 March), therefore the appellant’s notice was filed out of time.

The next question for the court, was whether or not they should extend time, which would be an application for relief from sanctions. The court considered that it was borderline, as there were some points in the applicant’s favour, but there had been a serious and relatively significant default which prolonged a difficult family dispute.

Permission to appeal was refused.

What should we take from this?

  • Applications to appeal should be made promptly after the date in which the decision is formally announced, or in any event within 21 days.
  • Applications to extend time should be made as quickly as practically possible so as to ensure that the opportunity to appeal is not lost.
  • If a draft judgment is circulated, applications to extend time to appeal should be made prior to the date which the hearing is to take place, to enable to matter to be adjourned and written submissions made.

Other News

First part of Civil Liability Act 2018 has come into force

Link to article here.

Fees Breakdown published for capped costs pilot

The breakdown of the £80,000.00 in fees which solicitors will be able to claim under the voluntary capped costs pilot for certain Business and Property Courts cases valued up to £25,000.00 has been published and commenced on 14 January 2019.

The aim is to streamline procedures, lower costs and speed up resolution of claims.

For more information contact

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