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Eversheds Sutherland’s Corporate Claims Bulletin: October 2020 Edition

  • United Kingdom
  • Health and safety
  • Litigation and dispute management
  • Personal injury claims litigation

20-11-2020

LIABILITY

Henderson (A Protected Party, by her litigation friend, The Official Solicitor) v Dorset Healthcare University NHS Foundation Trust [2020] UKSC 43

The issue before the Supreme Court was whether the claimant was entitled to recover damages following the negligence of the health authority in not returning her to hospital, which resulted in her killing her mother.  The Court of Appeal had previously ruled that the claim was precluded from succeeding due to the doctrine of illegality.

Background

The claimant, who suffers from paranoid schizophrenia, killed her mother during a psychotic episode.  The claimant accepted a plea in the criminal case of manslaughter by reason of diminished responsibility and she was sentenced to detention by way of a hospital order.  The health authority admitted negligence by failing to return the claimant to hospital prior to the killing.  It is not disputed that the killing would not have occurred but for the negligence of the health authority. 

The claimant sought various heads of damage, including general damages for PTSD suffered after the event, general damages for loss of liberty, a claim for future treatment and the future cost of a case manager or support worker, and a claim for the lost share of her mother’s estate that she was unable to inherit due to the Forfeiture Act 1982. 

Lower Courts

The court at first instance, as well as the Court of Appeal, found that they were bound by the House of Lords decision in the case of Gray v Thames Trains Ltd [2009] UKHL 33 and could not allow the claimant to recover damages on grounds that to do so would go against public policy and the illegality doctrine.  The judgment in Gray highlighted that there was a need to avoid inconsistency so as to maintain the integrity of the legal system. It would be inconsistent of the law to incarcerate a person for their criminal acts and then compensate them in the civil courts for the financial consequences. 

Supreme Court

The claimant appealed to the Supreme Court and asserted that Gray can be distinguished.  The claimant also argued that Gray was decided contrary to the flexible policy-based approach to illegality endorsed by the Supreme Court in Patel v Mirza [2016] UKSC 42.  In Patel it was held by a majority that there are three criteria for the court to consider before an illegality defence can succeed.

In essence there is a balancing act at stages one and two, looking at the public policy reasons why the claim is prohibited and whether the denial of the claim enhances that reason, whilst also looking at public policy reasons that might be relevant if the claim is denied.  The final stage is then a proportionality test; would the denial of the claim be a proportionate response?

The claimant argued that Foskett J commented when sentencing the claimant, that she did not bear a significant degree of responsibility for what she did, yet in Gray this was not the case, he was found to have a significant degree of responsibility for his actions.

 However, the Supreme Court found that the degree of personal responsibility was not part of the reasoning when deciding Gray, the crucial factor was whether the claimant has been found to be criminally responsible.

The court considered that the fundamental policy consideration in Gray was the need for consistency so as to maintain the integrity of the legal system.  They also confirmed that this was the main policy question in Patel. There would be no consistency if the civil courts allowed damages to be paid to compensate them for a deliberate criminal act.  The claimant argued that the hospital order was not a criminal punishment.  The court decided that just because there was no prison sentence it did not mean that the claimant was not to blame for the killing.

The Supreme Court looked at the three considerations from Patel and found that the policy point regarding consistency, as well deterring unlawful killing and protecting the public were not outweighed by any public policy consideration raised by the claimant.  The court also found that the offence was an intentional killing, regardless of the degree of responsibility of the claimant, and so the denial of the claim was proportionate.

The court rejected the claimant’s assertion that Gray was not compatible with Patel, finding it was entirely compliant. Therefore, the Supreme Court dismissed the appeal and no damages were payable to the claimant. 

PRACTICE AND PROCEDURE

Sheeran & Ors v Chokri & Ors [2020] EWHC 2806

This case looked at whether a suitable response to a Part 18 Request for information could simply be that the party making the request are not entitled to a response.

Background

The claimants are songwriters who brought an action seeking a declaration from the defendant that their song “Shape of You” did not infringe copyright of a song written by the defendant.

The defendant served a Part 18 Request for Information on the claimants on 1 April 2020 seeking a response within 14 days.  The claimants did not respond to the request in any way, not to confirm a response will follow, or to dispute the validity of the request nor to request an extension.

The defendants, in accordance with PD18.5.5, made a without notice application on 23 April 2020 and asked for an order that the claimants are to respond. The court made the order on 27 April 2020, ordering the claimants to respond by 4.30pm on 15 May 2020.  The order summarily assessed the costs of the application and also included the provision for any party to apply to set aside of vary the order no later than 7 days from service of the order.  

The claimants served a response on 6 May 2020.  Their response to requests 1 to 18 was that the requests were not confined to matters which were necessary and proportionate for the defendants to prepare their case, or to understand the case they have to meet.  They answered requests 19 – 22.

The defendant made a further application on 8 May 2020 seeking an order that unless the claimants respond to requests 1 – 18 the claim and defence to the counterclaim shall be struck out and judgment be entered for the defendants.

The application was listed to be heard on the same date of the CCMC which took place 16 July 2020.  The defendants position was that the claimants were ordered to answer the requests by way of the order dated 27 April 2020 and that the claimants were now not entitled to object to the nature of the request.  The chance to do that was within the 14 days after service of the request, or within an application within 7 days of service of the order 27 April 2020.  The claimants considered that the starting position should be whether the Part 18 requests were reasonable.

The court found with the defendants on this point.  The court found that the claimants failed to respond to the original Part 18 within the 14 days allowed, failed to make an application within 7 days of the order dated 27 April 2020, failed to apply ahead of 4.30pm on 15 May 2020 nor even in advance of the CCMC.

The court considered the claimants were ordered to respond to the Part 18 Request and so a “not entitled” response was not compliance and the claimants should have made an application to vary the order dated 27 April 2020.

The claimants made an oral application for an extension of time in order to make an application to set aside the 27 April order.  The court considered the Denton test.  It found that the breach was serious and significant.  The claimants’ legal team were off sick when the original Part 18 request was received, suffering with Covid.  It was argued that this was the reason they could not respond prior to the defendant applying on 23 April 2020.  Whilst the court accepted this may be good reason up to that stage, there is no such reason why no application has been made since.  The court found that there had been no good reason for non-compliance.

In order to consider the third limb, considering all the circumstances is it just to allow relief from sanctions, the judge considered whether the claimants objection to the Part 18 request had any merits.  On review he considered that there were strong grounds for the application to succeed, and so relief was granted to the claimants in order for them to make the necessary application. 

Mason v Laing [2020]

Background

The claimant brought a claim for damages under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents. The claimant obtained one expert report from a GP which was not disclosed. The claimant then obtained a further report from an Orthopaedic Surgeon and a Psychologist. The claimant disclosed all three reports together and looked to rely upon them all at the Stage 3 hearing.

First Instance

The District Judge who heard the Stage 3 hearing held that the two subsequent reports had been obtained outside the scope of the Protocol, in particular paragraph 7.8B(2) which says:-

A further medical report, whether from the first expert instructed or from an expert in another discipline, will only be justified where –

(a)  it is recommended in the first expert’s report; and

(b)  that report has first been disclosed to the defendant”

There was no dispute that the first expert recommended a report from another expert in certain circumstances. However, the first report had not been disclosed to the defendant prior to the instruction of other experts.  The District Judge therefore found the two further reports not to be “justified” and used only the initial report at the Stage 3 hearing.

Appeal

The claimant appealed this decision on the basis that the court had no power to debar the two reports, but even if it did, the judge chose to exercise that power wrongly. 

The claimant looked at the practice direction to Part 8B of the CPR.  At paragraph 7.1 of PD 8B, it says “The parties may not rely upon evidence unless – (1) it has been served in accordance with paragraph 6.4”.  Paragraph 6.4 says “The claimant’s evidence as set out in paragraph 6.1 must be served on the defendant with the claim form”.  Paragraph 6.1 says “The claimant must file with the claim form – (3) copies of medical reports”.  The claimant then highlights that the Protocol, at paragraph 7.32 sets out the Stage 2 Settlement Pack contents which includes “a medical report or reports”. 

The defence argued that PD 8B also says at paragraph 6.3 “…the claimant must only file those documents in paragraph 6.1 where they have already been sent to the defendant under the relevant Protocol”.

HHJ Gosnell held that in his view the court should look to see if there was compliance with the protocol and then use the rules to help resolve the Stage 3 hearing. 

He also considered whether the interpretation of paragraph 7.8B (2) of the Protocol was correct.  He held that additional reports are only “justified” if the Protocol was followed.  It wasn’t followed and therefore the reports were not justified, and if this is the case then it cannot be relied upon.

The claimants final suggestion was that it was open to the court to look at the prejudice to the parties and could exercise discretion as to whether the medical evidence can be used.  HHJ Gosnell found that the Protocols are strictly applied and are prescriptive and so held that the court had no discretion in this regard. The appeal was therefore dismissed. 

Diriye v Bojaj & Anor [2020] EWCA Civ 1400

The Court of Appeal considered two issues in this appeal. The first involved service using Royal Mail’s “Signed for 1st class” service, with the second dealing with an application for relief from sanctions which also provided guidance regarding the issue of pleading when asserting the claimant was impecunious.

Background

The claimant was pursuing a claim for whiplash along with special damages with the bulk of it being £12,048.29 for credit hire charges. 

An order was made on 7 March 2018 allocating the claim to the fast track and provided directions through to a trial listed for 1 November 2018. As part of the order, there was a direction that said that unless by 4pm on 4 April 2018 the claimant files and serves a reply to the defence setting out all facts in support of any assertion that the claimant was impecunious at the commencement of and during the hire of the vehicle in question, the claimant shall be debarred from relying upon the fact of impecuniosity for determining the appropriate rate of hire. 

The claimant posted the reply on 4 April 2018 at 17:36 using the Royal Mail’s “Signed for 1st class” service.

The claimant made an application for relief from sanctions on 31 May 2018, which was issued 5 June 2018 and heard on 21 August 2018. 

Lower Courts

There was an issue as to how late the claimant was in serving his Reply to the Defence.  The response was posted on 4 April 2018 and so the District Judge needed to assess if the method of posting should be considered the same as first class posting, and so a deemed date the second day after posting, or whether service is the date that the letter is signed for.  The District Judge held that the date of service will be the date the letter was signed for as that is the confirmed date of receipt.  The circuit judge agreed with this approach. It was held therefore, that the Reply to the Defence was served 5 days late. 

The court went on to deal with the application for relief from sanctions.  The District Judge found that the breach was serious, there was no real reason for the breach and that in evaluating all of the circumstances the District Judge held that due to the delay in making the application, no relief should be given.  The circuit judge upheld that decision.

Court of Appeal

The Court of Appeal looked at the decision regarding the method of posting.  The court looked at CPR 6.26 which provides as a method of service “First class post (or other service which provides for delivery on the next business day)”.  The court held that the “Signed for 1st class” is just another species of first class post and therefore should be treated as such.  Even if it was not first class post, it must fall within the “or other service which provides for delivery on the next business day”.  The lower courts were therefore wrong to find that the service was 5 days late, it was in fact 2 days.

The court then moved on to look at the application for relief and went through the Denton three stage test.  The claimant asserted that whilst the breach was for an “unless” order, it was not an order that had been issued due to a failure to comply with an earlier order, and therefore was less serious.  In addition they submitted that whilst it may have been a serious breach, it was not significant.

The Court of Appeal did not agree with these submissions. The unless order had been made because the initial pleading regarding impecuniosity had been poor. The court then looked at the substance of the response, which simply said “As he earned cash as a minicab driver, he expended the same on bills and daily living allowances for his family”.  The court found that this is was not a reply that complied with the original order in any event. 

Even if it had been served in time, there still would have been a breach of the order.  The claimant also asserted that 2 days is not significant relying upon several judgments.  The Court of Appeal stated that the seriousness and significance can never be a simple function of the period of default. The period if a factor to consider but nothing more.  The court found that the breach was serious and significant.

The court went on to look at the second stage of Denton which is whether there were good reasons. The claimants explanations were firstly that had made a mistake and thought they could rely upon CPR 7.5 (which is service of claim forms only) with the other reason being they had problems getting the claimant into their office to finalise the instructions.  The court compare the excuses to “the dog at my homework” and did not explain at all why the unless order was not complied with. The court found there was no good reason for the breach.

The Court of Appeal then considered the third limb of the test, namely a consideration of all the circumstances of the case. They considered the delay in making the application was a key issue. The solicitors acknowledged on 17 April 2018 that they would need to make an application and yet this was not done until the end of May. They also considered the fact that the claimant and his solicitors had not dealt with the issue of impecuniosity on their initial proceedings, had not dealt with it despite the unless order and had not dealt with it within the claimant’s witness statement. The whole point is to stop the parties having to attend trial and for cross examination before impecuniosity can finally be dealt with. The Court of Appeal concluded that relief should not be provided and the appeal was dismissed.  

Telefonica UK Ltd v The Office of Communications [2020] EWCA Civ 1374

The Court of Appeal considered whether the trial judge was correct not to award additional interest on damages and costs where a claimant had beaten its Part 36 offer.

The claimant was awarded damages at trial in the sum of £54.379m, which bettered its Part 36 offer to settle by just over £4m (8% of the claim value).  The claimant sought an order for all of the enhancements applicable under Part 36.17(4).  This section says the following:-

(4) Subject to paragraph (7), where paragraph (1)(b) applies, the court must, unless it considers it unjust to do so, order that the claimant is entitled to—

(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…..

High Court

The High Court awarded the additional £75,000, which was the cap for the additional amount the court could award under Part 36.17(4)(d) as well as ordering that the claimant’s costs were to be paid on the indemnity basis,  However, the court failed to award any interest on the damages nor interest on the claimant’s costs. The judge considered that neither of the parties had acted in an unreasonable manner and due to the large numbers involved in this claim would mean that awarding interest would be disproportionate, and therefore unjust to award in favour of the claimant.  The judge considered that the enhancements he had allowed were enough to reach a just and proportionate conclusion.

Court of Appeal

The Court of Appeal were unanimous that the judge’s reasons for rejecting the additional interest were not justified. The claimant had received no more interest than it would have done had it not made any offer at all, which cannot be right. The court is to assess if the offers were genuine offers to settle, and in this case the court found that they were. The fact that the offers were for large sums of money should not be a bearing on whether additional interest should be payable, but it may well be a factor when using discretion as to the level of interest awarded.  The conduct of the parties will also be an issue taken into account when reaching a decision on the level of interest payable. 

The court likened the judge’s comments to the previous case of Carver in that the judge considered that the claimant only beat the Part 36 offer by a small percentage and therefore it would be disproportionate to award enhanced interest. Whilst the Court of Appeal agreed that proportionality is a factor, it is one that deals with the level of interest awarded, not whether to award the interest at all. With regards to the costs, whilst the trial judge considered that neither party had acted unreasonably, his finding that the costs had not materially increased was incorrect as had the offers been accepted then the trial would not have occurred.

The Court of Appeal awarded interest on both damages and costs of 3.5% from the relevant date.   

COSTS

Comberg v VivoPower International [2020] EWHC 2787

The court considered whether the defendant’s cost inclusive offer afforded them any cost protection when looking at the costs after trial.

The claimant was successful with his claim for wrongful dismissal. He was successful in some elements of his claim and unsuccessful in others. He was awarded over £600,000 in damages, but this was significantly less than he had claimed. The defendant had made an offer previously in the sum of £1.5 million pound inclusive of damages and costs. 

Upon assessment of the damages, the defendant asked that this offer be taken into account before considering an order for costs. Mr Justice Freedman held that as the costs have been rolled up into the offer, it is not possible to decide if the claimant has done better or worse.  He considered that it might be likely that with costs to be assessed he is likely to recover more than that amount and “the fact that the offer was rolled up with costs means that it does not provide costs protection”. 

This case is a reminder that whilst all inclusive offers can be attractive to defendants, they don’t offer any cost protection at a later stage in a similar way to Part 36 offers.

OTHER NEWS

Swift v Carpenter [2020] EWCA Civ 1295

The Court of Appeal have refused permission to appeal the recent decision regarding the method of calculating future accommodation claims. This was the decision to abandon the old Roberts v Johnston approach and move to a reversionary interest model. 

This may not be the end of the matter as there are reports the defendant is seeking to apply direct to the Supreme Court for permission to appeal.