Corporate Claims Bulletin: November 2019 edition

• United Kingdom

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

06-12-2019

Practice and procedure

Wickes Building Supplies Ltd v Blair [2019] EWCA Civ 1934

An employee had an accident at work. The court had to determine whether the claimant should be allowed to rely upon a witness statement which had not been filed and served in accordance with CPR PD 8B in the context of a claim brought under the Pre-Action Protocol for Low Value Injury.

At the Stage 3 hearing in this case, a preliminary issue arose about a statement signed by the employee, which according to the employer, had not been served in accordance with the Protocol and therefore should not be used by the court.

The judge decided that the employer had not had the statement in time, so it would be wrong to permit the employee to rely upon it. He went on to order the employer to pay £2,000 in damages and £1,080 in costs. PD 8D para 9.1 addressed the situation where a defendant objected to a claim proceeding under the Protocol either because the claimant had failed to comply with the procedure under the Protocol or had filed and served additional evidence with the claim form that had not been provided in accordance with the Protocol.

The employee appealed the decision on the basis that, in accordance with para 9.1, once the judge had made the finding the employee had filed and served additional evidence with the claim form that had not been provided under the Protocol, he had to dismiss the claim and the employee could start proceedings under CPR Pt 7.

The employer submitted that para 9.1 was not triggered by the employee’s attempted late service of a statement at the Stage 3 hearing; the district judge had properly dealt with the matter under para 7.1 which pertained to evidence that could not be relied on because of filing or service defects, and there had been no need for him to consider para 9.1 at all. It contended that it had not been seeking to “oppose the claim” within para 9.1 but rather to object to the late service of evidence contrary to paras 6.3, 6.4 and 7.1.

It was held on appeal that the employer’s submissions were correct. It was not opposing the claim, merely objecting to the court considering the new evidence in the additional statement. If the employee was permitted to start proceedings under CPR Pt 7 it would essentially allow the employee to relitigate the entire claim in the hope of getting a better result.

MacKenzie v Alcoa Manufacturing (GB) Limited EWCA Civ 2110

The Court of Appeal considered the circumstances in which it will be appropriate to draw an inference adverse to the operator of a factory in industrial disease deafness cases, where there was noise in the workplace and no noise survey available.  The effect of the Court of Appeal judgement in Keefe v Isle of Man Steam Packet Company Limited (2010) EWCA Civ 683 was considered.

The Claimant started his working life in 1963 aged 16, when he was employed to work in Alcoa’s factory in Swansea.  Aluminium smelting was carried out in the factory and there was a foundry extrusion mill.  The claimant was an apprentice electrician.  His role was to install plant and maintain and repair machinery.  From 1976 to 2002 he worked at Ford Motor Company Limited and was also exposed to noise but his claim against Ford was compromised on 4 August 2017.

The claimant became aware of a hearing problem in 2012.  By the time the claim was issued it was 39 years after the relevant time of what was said to be the wrongful exposure to noise at the factory.  There were no noise surveys available from the factory which had since closed down.

The parties instructed a single joint expert, who noted that up until the Noise at Work Regulations 1989 it was understood that protection was necessary at levels of noise exposure above 90 dB(A) averaged over an 8 hour working day.  He also explained that as the claimant was working on the installation of machinery, that machinery would not be operational at the time, hence any exposure to noise during work would be limited to background noise in the mill in general. 

The expert considered the noise levels at Newport premises of British Alcan, which contained furnace areas and hot and cold mills, which were set out in a survey carried out by Sound Research Laboratories Limited in 1989.  He concluded that whilst it was accepted that the premises referred to in the survey were not those in which the claimant actually worked, the indication was that whilst there are some areas of such a mill where noise levels could exceed 90dB(A), the average level of maintenance installation employees were exposed to, would be unlikely to regularly exceed such a level. 

Without observation of contemporaneous noise surveys from the premises in which the claimant worked, it was not possible to demonstrate on the balance of probability that the claimant’s average daily exposure level would have reached or exceeded 90dB(A) during his employment.

At first instance the claimant submitted that no noise surveys had been produced and the engineering expert had been unable to provide relevant evidence because of the defendants failing in their duty to carry out a noise survey.  As such they argued that a Keefe adverse inference should be drawn.  HHJ Vosper QC noted that the duty to carry out a noise survey was said to arise by reason of the Code of Practice issued in 1972 and that the duty had only arisen in the last few years of the claimant’s employment.  He recognised the force of the defendants’ submission that in the intervening years documents were likely to have been lost and concluded that it was not possible to make a finding that the defendants were in breach of duty in failing to carry out noise survey. 

HHJ Vosper then distinguished Keefe on the basis that there was a noise survey at a similar factory and there was expert engineering evidence.  In this case, the expert’s opinion was based not solely on data from the Newport survey, but he had also had regard for the nature of the work which the claimant was carrying out and the circumstances in which it was likely that the work was done based on his own engineering evidence. 

HHJ Vosper QC dismissed the claim.

Garnham J allowed the appeal by the claimant and noted that there was no evidence of any noise survey at trial and no evidence to explain the absence of surveys. He noted that the engineering evidence simply served to explain why it was not now possible to establish to what level of noise workers would have been exposed and this served to underline the significance of the absence of a noise survey.  He held that there were no good grounds for distinguishing Keefe.

The Court of Appeal allowed the Defendant’s appeal from Garnham J.

In his leading Judgement, Lord Justice Dingemans held that the common law duty to carry out a noise survey arose in 1973. He noted that HHJ Vosper had said that it was not possible to find as fact that no noise survey had been conducted.  He warned that caution should be exercised when overturning findings of fact and that Garnham J had no sufficient basis to do so. 

Lord Justice Dingemans noted that Vosper QC had relied on expert’s evidence that it could not been shown that the claimant had regularly been exposed to noise in excess of 90dB(A) based on the nature of the claimants work, circumstances in which it was done, his own engineering experience and results from comparable factories.  He said:

“This was much more than a dismissal of the case because on the balance of probabilities it was not possible to say what was the exposure to noise.  In my judgement HHJ Vosper QC was entitled to accept engineering evidence and avoid resorting to inferences, even if they might otherwise have been drawn,  The approach taken by Garnham J. to the adverse inference risked elevating the decision in Keefe to a rule of law, rather than an example of the proper approach to finding facts in the particular case where the evidence showed that the defendant had failed in its duty to carry out noise surveys, and the claimant has been deprived of the opportunity to prove his case”.

The judgement serves as helpful guidance as to the circumstances when a Keefe adverse inference will and will not be appropriate.

Irani v Duchon [2019] EWCA Civ 1846

The Court of Appeal considered whether damages should be awarded on a Blamire basis, or that of the multiplier/multiplicand basis.

The claimant’s injuries sustained in a road traffic accident led to his redundancy and consequent loss of his immigration status in the UK.

The accident in 2013 caused injuries to the claimant’s leg and elbow, resulting in ongoing pain. He returned to work a phased basis.  Shortly afterwards he was made redundant when his employer shut down their business.   Whilst the claimant was able to secure alternative employment, his inability to find employment within 60 days had prevented his application for indefinite leave to remain.

The claimant submitted that the judge had been wrong to award damages by way of a lump-sum award on the approach in Blamire v South Cumbria HA [1933] P.I.Q.r. Q1, [1992] 10 WLUK 104 in respect of future loss of earnings and a Smith v Manchester award in respect of disadvantage on the open labour market. He argued the correct approach was the multiplier and multiplicand. He further argued that the judge had been bound to accept his evidence on his residual earning capacity in India as it was unchallenged in cross-examination.

The appeal was dismissed. The only evidence of residual earnings was a letter from a friend, a snapshot of unsuitable jobs currently available from on Indian website and various assertions made by the claimant, a number of which were specifically rejected. It was not surprising that the judge had concluded that there was no proper evidence for a finding on the level of residual earnings in India, or even that the claimant would return to India. The judge had been entitled to make a Blamire award.

The claimant’s evidence was that he would earn £10,000 per annum if he returned to work in India. That was a statement of his belief, not of fact relating to residual earnings. The defendant was not denying that the claimant had that belief, but simply asserting that belief was not probative evidence. It was apparent from the judge’s criticisms of that evidence that he rejected the claimant’s argument that in the absence of challenge his evidence should be accepted.

Appeal dismissed.

ABC v Google LLC [2019] EWHC 3020 (QB)

The case highlights the point that a relief from sanctions application cannot be used as an attempt to attack, or amend, the original order that a party has breached.

The claim form itself was issued on 22 December 2017. Prior to that, following a without notice application by the claimant, Master Yoxall made an order on 4 December 2017 granting the claimant permission to bring proceedings anonymously using the cypher “ABC”. However, paragraph 4 of that order provided that:

“When the claimant serves the claim form, he must serve a copy which shows his full name and address and a copy which is anonymised as aforesaid together with a copy of this order.”

There was no compliance with that direction. A further Order, dated 18 May 2018, requiring the claimant to comply with paragraph 4 was also not complied with.

In August 2018, the claimant brought an urgent application seeking interim injunctive relief. The judge observed that:

“it was a remarkable state of affairs that the claimant had managed to get to August 2018 when not complying with an order of the court.”

The provision of the claimant’s name “has already been ordered once by the court to be provided together with the address. The claimant is going to comply with that order, and if he does not the claim was to be struck out. The court is not in a position to progress this claim fairly and to dispose of it fairly until that information is provided.”

Claim struck out.

Singhson Ltd & Ors v Kanendran [2019] EWHC 2958 (Ch)

In an application for a mandatory injunction the court considered the danger of witness statements from solicitors purporting to give evidence as to fact.

The claimants brought an action seeking a declaration that the defendant remove certain containers and freezers from the defendant’s land on the grounds that they interfered with the claimants’ rights of way over that land. In this application the claimants sought a mandatory injunction that the objects be removed.

The claimants served two witness statements from their solicitors, and an “expert” report. Although both were taken notice by the judge, the “expert” part of the report was not considered and the statements from the solicitors carried considerably less weight than first hand evidence from the claimants themselves.

Dealing with the “expert evidence”, the judge stated that the claimants’ solicitors did not comply with CPR 35.4 (1), providing that expert evidence is admissible only with the Court’s permission. No such permission had been sought and during the application the evidence was relied upon as evidence only on the facts contained in it.

In relation to the witness statements the judge did not disregard the evidence. However, the fact that none of the claimants had chosen to make a witness statement was a concern.

The judge stated that:

“evidence should, where possible, be a written statement which contains the evidence which the witness would be allowed to give orally, signed by that person. Given the time available to the claimants to prepare for this hearing, there is no obvious reason why they could not have given direct evidence and it would have been preferable if that had been done”.

The criticisms made of some gaps in the evidence during the hearing were more powerful than might have been the case for direct evidence.

In a finely balanced application the claimants were unsuccessful. The nature of the evidence produced clearly played a part in the judge’s assessment of the discretion they had to exercise.

Edwards v Hugh James Ford Simey (a firm) [2019] UKSC 54

In a professional negligence claim against a law firm, the Supreme Court had to decide whether to take account of a retrospective downgrade in value of the original claim.

The case involved the late miner, Arthur Watkins, whose daughter pursued a claim for damages against his former employer in respect of the condition, vibration white finger (VWF).

Mr Watkins instructed Simey Solicitors, as it was then known, and in 2003 he was made an offer in respect of general damages £9,478. His solicitor advised him what additional steps he would need to take in order to pursue a claim for services (assistance with six specific domestic tasks identified under the scheme).  The advice was incorrect and Mr Watkin’s decided simply to accept the offer.  This acceptance terminated his ongoing services claim for which he might have been entitled to additional compensation. In 2010 Watkins issued the negligence claim for damages.

During the initial claim, the claimant underwent a medical examination which indicated that his VWF was of sufficient severity to entitle him to general damages and a presumption in his favour that satisfied the requirements for a service award under the Department for Trade and Industry’s tariff-based compensation scheme for VWF.

Watkins then brought proceedings in professional negligence against the law firm as he had lost the opportunity to bring a services claim under the scheme or otherwise. He died in 2014 and his daughter, Mrs Edwards, was appointed to continue the claim on behalf of his estate.

A jointly instructed medical expert (instructed as part of the professional negligence proceedings) said Watkins’ symptoms would have been insufficient to succeed on a services claim, and he would have only been offered £1,790 for general damages. Whilst the judge held that the deceased had received negligent advice, if he had received appropriate advice he would probably have rejected the settlement offer and continued to pursue his service claim. However, the medical evidence shows that we would likely have been unsuccessful and therefore he did not sustain a loss. The claim was dismissed.

The Court of Appeal quashed the judge’s decision and the firm were granted permission to appeal on the sole question of whether the prospects of success of the claim were to be judged as at the date when the claim was lost, or at the date when damages were awarded.

Lord Lloyd-Jones said that the claimant would have pursued an honest claim had he received non-negligent advice. The updated medical report was ‘not relevant’ to the issue of loss. It was held that Watkins was entitled to claim for the lost opportunity and what it would have been worth at the time.

The Supreme Court said the services claim under the scheme had a real and substantial prospect of success. The evidence of a later medical report applying a different presumption did not change that.

Lord Lloyd-Jones added that the later evidence was ‘simply not relevant when constructing the counterfactual situation which would have arisen if Mr Watkins’ solicitors had fulfilled their duty to him.’

BPS Law LLP, who represented the claimant, said:

“this judgement confirms what claimant lawyers have always thought – that claims handled under a scheme must be treated differently because schemes are intended to provide an efficient and economic system for dealing with a huge number of claims in a way that was broadly fair. To then seek to apply conventional civil procedure rules is counterproductive and goes against the purpose of the scheme in the first place.”

This ruling could pave the way for more negligence claims against law firms.

Jet 2 Holidays Ltd v Hughes & Anor [2019] EWCA Civ 1858

The Court of Appeal extended the reach of committal applications for contempt to those who make false witness statements regardless of whether there are “proceedings”.

This case involved a claim in respect of alleged holiday illness directed against the package holiday company with which the holiday had been booked. The prospective claimants served witness statements containing statements of truth in compliance with the personal injury pre action protocol. Within the statements it was asserted that food was left uncovered for long periods, food appeared to have been reused on several occasions, burgers seemed undercooked, ants and beetles were around the food areas and ants were crawling on the bread. The proposed claimants also alleged that children were being sick in the pool and their child became ill after swallowing pool water. They claimed to have started to feel ill on the second day and began being sick on the third and were acutely ill for the remainder of the holiday with diarrhoea, stomach pains, vomiting, weakness and were not fully recovered on their return home. They said that they believed that their sickness was caused by undercooked food and unhygienic conditions at the hotel.

When the claim was investigated it was found that the proposed claimants had posted various pictures and comments on Twitter and Facebook together with a video on YouTube during their holiday which showed them and their children in apparent good health  and enjoying themselves at the hotel in question. Accordingly the claims were rejected and no proceedings were issued by the proposed claimants.

The appellants sought permission to bring committal proceedings against the respondents based on the allegedly false statements in their original witness statements that had been verified by a statement of truth.

The respondents responded in further statements addressing the social media posts saying that the posts simply showed them putting on a front and trying to make the best of things and was not truly reflective of how they felt.  They stood by the allegations made in their original statements and said that they had complained at the time to the manager of the hotel.

The appellants also sought leave to amend their application for permission to include these additional statements as a part of the committal proceedings.

At first instance the judge held that in the absence of proceedings being brought committal proceedings could not be founded on a witness statement and also refused permission to add the statements made in responding to the application to the basis of the committal proceedings. 

However the Court of Appeal overturned the judgement of the High Court and held that committal proceedings could be brought in respect of witness statements made where no proceedings were ultimately issued. In addition the Court of Appeal granted permission to amend the application to include within the committal proceedings allegations what was said in the additional witness statements responding to the application.

The decision adds to the armoury of Defendants and insurers in the fight against fraudulent claims.  Claimants cannot avoid committal proceedings for contempt by not issuing the claim when a fraudulent claim has been advanced.

(Decision was that committal proceedings could be brought – they have not been brought yet so no outcome.)

Costs

Ho v Adelekun [2019] EWCA Civ 1988

The Court of Appeal had to decide whether a claimant should be paid more than the fixed costs that apply in personal injury cases that have fallen out of the portal when the Part 36 offer includes a reference to CPR r.36.13 rather than r.36.20.

The claimant’s road traffic accident fell out of the portal when liability was not admitted. The case was allocated to the fast track.

An application on behalf of the claimant was made to reallocate the claim to the multi-track and shortly before it was listed to be heard, the defendant made a Part 36 offer for £30,000. The offer letter stated that, if the offer was accepted, the appellant would pay the respondent’s costs in accordance with CPR r.36.13, “such costs to be subject to detailed assessment if not agreed.”

On the following day, the defendant confirmed agreement for the case to be reallocated to the multi-track and pressed for a response to the offer. On the next day, the claimant accepted the offer and submitted a consent order confirming settlement to vacate the upcoming reallocation hearing.

The consent order included the following provision:

“the defendant do pay the reasonable costs of the claimant on the standard basis to be the subject of detailed assessment if not agreed…”

The District Judge held the action was subject to the fixed costs regime, the claimant appealed. The claimant’s appeal to the Circuit Judge was successful. The defendant then appealed to the Court of Appeal.

During this appeal, two issues arose:

1. did the appellant’s solicitors, by their letter of 19 April 2017 (the Part 36 offer), offer to pay “conventional” rather than fixed costs?
2. If not, should the claim be re-allocated to the multi-track with retrospective disapplication of the fixed costs regime?

Issue 1

The simple reference to r.36.13 contained in the offer did not suffice to take the case out of the fixed costs regime. It was held that the letter made it clear that the defendant was intending to make an offer to which Part 36 applied.

If a party to a claim that no longer continued under the protocol offered to pay costs on a basis that departed from Pt 45, the offer was incompatible with Pt 36 and could not be an offer under that rule. The letter’s reference to “detailed assessment” was not sensible given that the defendant intended the fixed costs regime to apply, it was not wholly inapposite: the fixed costs regime did involve an assessment of some kind. It was highly unlikely that the defendant had intended to offer conventional rather than fixed costs, given that the fixed costs regime is considerably more favourable to the defendant.

The court interpreted r.45.29B to mean that where a case was transferred from the fast track to the multi-track, the fixed regime ceased to apply prospectively, not in relation to past costs.

Issue 2

The judge rejected the claimant’s argument that, notwithstanding the stay imposed by r.36.13(1) following her acceptance of the offer, the claim should be reallocated to the multi-track which would have disapplied the fixed costs regime with retrospective effect under r.46.13. Whilst the stay did not prevent the court from dealing with costs r.36.14(1) did not extend to the question of reallocation, even if it was sought with a view to obtaining a costs direction.

Even if it had been open to the judge to entertain such application, there was good reason to refuse it: it had not been included within the settlement agreement that the fixed costs regime should be displaced.

This case acts as a warning to defendants wishing to make a Part 36 offer on the basis that the fixed costs regime would apply. In such cases, defendants should refer to r.36.20 and not r.36.13, and to omit any reference to the costs being “assessed”, or assessment “on the standard basis” in any offer letter or consent order drawn up following acceptance of an offer.

Hochtief(UK) Construction Ltd and VolkerfitzpatrickLtd v Atkins Ltd [2019] EWHC 3028 (TCC)

The Technology and Construction Court considered the costs consequences where there was a marginal victory in respect of a Part 36 offer.

The claimants brought a claim against the defendant for damages in relation to a bridge and an underpass. In relation to the bridge, surface settlement of the carriageways was discovered requiring remedial works to be completed in 2012 and 2014. For the underpass, signs of leakage were found including rust staining, icicles and fine cracking which also required remedial works in 2013.

In May 2017 (after the letter of claim but before proceedings were issued), the claimant  made a Part 36 offer of £875,000 (covering both elements of the claim). The Part 36 offer was open for acceptance until 9th June 2017. At trial on 31st July 2019, the claimants were unsuccessful in relation to the underpass issue but won on the bridge issue.

The claimants obtained judgment for £879,847.76 (including interest of £77,372.41 based on an agreed rate of interest of 2% above base).  The claimants therefore beat their Part 36 offer by £4,847. Pursuant to CPR 36.17(4), the claimants sought:

• interest on the damages at 6% above base from 10th June 2017 to 31st July 2019
• costs on an indemnity basis from 10th June 2017
• interest on those costs at 6% above base from 10th June 2017
• an additional sum of £65,123.77

The relevant provision that the Court had to consider was CPR 36.17(4) which provides that in circumstances where a party has achieved a judgement sum which is at least as advantageous as its Part 36 offer, the court must, unless unjust to do so, order that the claimant is entitled to—

• 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
• costs (including any recoverable pre-action costs) on an indemnity basis from the date on which the relevant period expired
• interest on those costs at a rate not exceeding 10% above base rate
• an additional amount of 10% of the amount awarded up to £500,000 and 5% of any amount awarded over £500,000 -up to a maximum of £75,000

It was clear that the judgment sum was at least as advantageous as the Part 36 offer albeit by a small margin and Part 36.17 benefits were therefore engaged in principle. 

In considering whether it would be unjust to make the orders referred to above, CPR17 (5) provides that the court must take into account all of the circumstances of the case. 

Despite the fact that the Part 36 offer was only marginally beaten, it was not unjust to make the Orders in this case in the circumstances.  In reaching this decision the court had regard to the fact that the offer was clear and had been made at a very early stage. The parties had sufficient information on merits as extensive investigations and remedial works had been made.  The Part 36 offer was also at a level which indicated it was a genuine attempt to settle the case.

The court was of the view that the defendant’s conduct was not so unreasonable as to attract the maximum 10% on damages and costs and that the 6% claimed by the claimants was appropriate.  The claimant was also entitled to the additional sum claimed and for costs to be assessed on an indemnity basis.

The case reaffirms that the margin of victory is irrelevant when a Part 36 offer is beaten.

Other news

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The New SRA Standards and Regulations applicable from 25 November 2019