Legal Watch - Personal Injury - Issue 13
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Transcript of Legal Watch - Personal Injury - Issue 13
Events
Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months:
Personal Data Training | 12.05.14 | Location TBC
MBIG Seminar 2014 | 22.05.14 | Wellcome
Collection - London
Credit Hire Training | 12.06.14 | Location TBC
In This Issue:
• Costs
• Damages/Fatal Accident
• Limitation
• Credit Hire
• Part 36
• Specific Disclosure
In Greenwoods’ Alert 351 we reported the first instance
decision in Jones and others v Secretary of State for Energy
and Climate Change (2013) EWHC 1023 (QB). The case has
now been to the Court of Appeal and is reported as Secretary
of State for Energy & Climate Change and another v Jones and
others (2014) EWCA Civ 363.
The claimant/respondents were industrial workers of modest
means who had brought claims for personal injury against the
defendant/appellants. Their claims had been brought with the
assistance of a conditional fee agreement. Their solicitors’
fees were only payable if the claims were successful, but
disbursements were payable regardless of the outcome of
their claims. They also entered into individual “disbursement
funding agreements” with their solicitors, under which the
solicitors agreed to provide them with credit of up to £5,000
each for the payment of disbursements. The agreements
were expressed to be credit agreements exempted from the
Consumer Credit Act 1974. If the claimants’ claims were
successful the credit/disbursements would be repaid by the
defendants. If they were unsuccessful, a claim would be
made for payment of the disbursements from after the event
insurers. The agreement contained a charge for credit of 4%
above base rate and was payable by the claimants if their
claims were successful, and after damages were received.
The personal injury claims succeeded and the judge ordered
the defendants to pay the majority of the claimants’ costs
plus interest on their disbursements at 4% above base rate.
In arriving at the appropriate rate, the judge took into account
the claimants’ means.
The defendants conceded that pre-judgment interest was
payable on the disbursements but submitted that the
appropriate rate was 1% above base rate. They also argued
that the solicitors’ means should have been taken into account
rather than the claimants’ means.
Costs
01
02
Dismissing the appeal, the Court of Appeal held that the
power to award interest on costs, including pre-judgment
interest on costs, was derived from CPR 44.2(6)(g). The
purpose of the award was to compensate a party who had
been deprived of the use of his money, or who had had
to borrow money to pay for his legal costs. The discretion
conferred by the rule was not fettered by the statutory rate
of interest under the, but was at large. The court had to
conduct a general appraisal of the position having regard
to what was reasonable for both the paying and receiving
parties. In commercial cases the rate of interest was usually
set by reference to the short-term cost of unsecured
borrowing for the relevant class of litigant. The rate might
differ depending on whether the borrower was classed
as a first class borrower, an SME or a private individual.
Historically, first class borrowers had generally recovered
interest at base rate plus 1% unless that was unfair. SMEs
and private individuals tended to recover interest at a higher
rate to reflect the real cost of borrowing to that class of
litigant.
These were claimants of modest means who had brought
personal injury actions for their own benefit. They needed
to fund their claims and they borrowed to finance their
disbursements at what the defendants conceded was
a reasonable interest rate for private individuals in their
circumstances. Under clause l.5 of the disbursement
funding agreement, payment of the interest was contingent
on the claim being successful and damages actually being
received. That did not mean that the arrangements were
unreal or notional. The claimants had borrowed money from
‘The purpose of the award was to compensate a party…who had had to borrow money to pay for his legal costs’
the solicitors, which had funded disbursements of over
£787,500. They won their claims and recovered damages.
Their interest liability had therefore crystallised. The judge
had therefore been entitled to make the order that she did
as the relationship between the claimants and the solicitors
was governed by the agreement, and it gave rise to a real
liability on the claimants as borrowers.
CommentAlthough disturbing from an insurer’s perspective, this case
has limited relevance as it relates only to CFAs entered into
prior to 1 April 2013.
03
Outside of mesothelioma claims, there are few cases
reporting the basis of awards for pain, suffering and loss
of amenity for the period between a negligent act and the
death of the victim. The case of Kadir v Mistry and others
[Lawtel 27/03/2014] is therefore of interest, particularly as
it is an even rarer example of an award being made under
S1(1)(b) Administration of Justice Act 1982. That section
states:
• In an action under the law of England and Wales or the
law of Northern Ireland for damages for personal injuries
(a) no damages shall be recoverable in respect of any loss
of expectation of life caused to the injured person by the
injuries; but
(b) if the injured person’s expectation of life has been
reduced by the injuries, the court, in assessing damages
in respect of pain and suffering caused by the injuries,
shall take account of any suffering caused or likely to be
caused to him by awareness that his expectation of life
has been so reduced.
The appellant/claimant, as personal representative of the
deceased’s estate, appealed against a decision awarding
no damages for pain, suffering and loss of amenity, or for
mental anguish, arising from the admitted negligent failure of
the respondent/defendant general practitioners to diagnose
his late wife with stomach cancer as early as they should
have done.
For several months the deceased had been visiting the
defendants complaining of various stomach-related
symptoms until, in March 2008, she was diagnosed with
stomach cancer. She was advised that the cancer was too
advanced to treat and thereafter she received only palliative
care until she died in August 2008. She was 32 and had
four small children. The claimant claimed against the
defendant on behalf of himself and the children under the
Fatal Accidents Act 1976 and on behalf of the deceased’s
estate under the Law Reform (Miscellaneous Provisions) Act
Damages/Fatal Accident1934. The defendants admitted liability for the delay in the
diagnosis and the consequent delay in treatment.
The claimant gave evidence that in March 2008 the family
was told by doctors that the deceased might have survived if
she had been diagnosed sooner, and that during a home visit
in May 2008 she asked her GP why she was not diagnosed
earlier and whether she would have survived if she had
been. The trial judge found that if the defendants had not
been negligent the deceased would have been diagnosed
in June or July 2007 and would probably have lived until
July or August 2010. He found that if the deceased had
been diagnosed earlier she would have suffered the same
symptoms as she did, albeit later, and would have had to
endure intensive and gruelling treatments, so he awarded
no damages for pain, suffering and loss of amenity. He also
rejected the claim under S1(1)(b) Administration of Justice
Act 1982 for damages in respect of mental anguish caused
or likely to be caused by the deceased’s awareness that her
life expectation had been reduced.
Allowing the claimant’s appeal, the Court of Appeal held
that it was important to bear in mind that there were no
special rules for the assessment of damages in cases
under the 1934 Act: the court was required to undertake
the conventional exercise, namely decide what pain was
occasioned by the negligence. If the court was looking at a
living claimant facing an early death, like the deceased, the
court inevitably had to compare the facts as they occurred
with the likely facts if there had been no negligence. On that
basis, the fact that the deceased would have had the same
symptoms two years later was relevant, as was the pain of
treatment. The judge had been correct on the evidence to
refuse the claim for pain, suffering and loss of amenity.
“Awareness” in S1(1)(b) of the 1982 Act did not mean strictly
certain knowledge. As a matter of ordinary humanity, if there
was good reason for the anguish, then it could be inferred
that the sufferer would have suffered some. The claimant
had given evidence that the deceased had believed that the
04
delay had caused the cancer to spread. The issue of why
she was not diagnosed earlier was a live question during her
last months. There was plainly material that gave rise to the
proper inference that she feared on good objective grounds
that her life expectancy had been reduced by the delayed
diagnosis. It was necessary to prove that she knew that it
was reduced.
No cases had been found that were relevant to the
assessment of damages under S1(1)(b) of the 1982 Act for
the deceased’s suffering occasioned by her awareness of
her reduced life expectation. On the evidence, her mental
anguish was proved for the three-month period from May
2008 until her death. It was important to recognise that there
was no psychiatric injury, but there were other important
elements: she was a young woman with four small children.
Her anguish must have been exacerbated by her knowledge
that they would be left without her and that she would not
see them grow up. It was proper to take those factors into
account. Adopting a broad-brush approach, £3,500 would
do justice.
‘(The deceased) feared on good objective grounds that her life expectancy had been reduced by the delayed diagnosis’
05
The case of Francisquini v London Borough of Southwark
and another [Lawtel 31/03/2014] is an example of a judge
weighing the prejudice to each party when considering
whether or not to disapply the three-year limitation period
for a personal injury claim. The claimant/applicant applied
to add a personal injury claim, outside of the limitation
period, to other claims against the defendant/respondents.
The claimant had brought proceedings against the
defendants under the Fatal Accidents Act 1976 and the Law
Reform (Miscellaneous Provisions) Act 1934 following a fire
in which his daughter and grandchildren had died. He gave
evidence at an inquiry into the fire. His solicitor had advised
that he did not have a cause of action in personal injury in his
own right against the defendants. The claimant instructed
each of the solicitors’ firms that his solicitor subsequently
moved to. The last firm was concerned as to the solicitor’s
handling of the case and took steps to discover whether the
claimant had suffered psychological injuries following the
fire. It emerged that he had been unable to work following his
return to Brazil, where he was resident. After taking further
legal advice, he gave instructions to pursue a personal
injury claim some time after the original proceedings had
been issued.
The defendants argued that the claim should not be added
as:
1. the claimant’s delay was either because he had
previously decided not to pursue the claim or had not
suffered from psychological symptoms
2. they were disadvantaged by the inability to investigate
the claimant’s presence during the fire and its aftermath,
and the difficulty in tracing witnesses arising from his
delay
3. the cogency of the loss of earnings evidence was
significantly reduced as a result of the delay
4. the claimant should not be able to pursue his claims
until he had applied for relief from sanctions as he was
in breach of orders relating to disclosure and exchange
of witness statements
5. the prejudice to the defendants of permitting the claim
outweighed any prejudice to the claimant in refusing
permission
Allowing the application, the deputy High Court judge held
that it was inherently unlikely that the claimant had been
advised that he had a cause of action in personal injury
which he would not have pursued, despite being prepared
to pursue the other claims. Nor was it likely that, if he had
not suffered personal injury, he would suddenly claim that
he had suffered such injury so late in the proceedings.
The defendants had not sought to put the claimant’s
presence at the fire into issue in their defences and, more
significantly, he had given evidence at the inquest. Any
forensic disadvantage on the defendants’ part was minor
at best.
The claim for loss of earnings was relatively modest and
the claimant alleged that his job paid £15,000 per annum.
There was no real evidence that the available information
was less cogent than if the claim had been brought within
the limitation period.
Although it might be a fair criticism that the claimant was
in breach of orders, that did not amount to prejudice. If
he pursued the personal injury claim and the defendants
wished to put him to the cost and expense of obtaining relief
from sanctions then the court would make a decision on that
application. It was appropriate to add the personal injury
Limitation
‘Any forensic disadvantage on the defendants’ part was minor at best’
06
claim. There was at most a relatively minor prejudice to the
defendants. The claimant would otherwise be significantly
prejudiced. Although he might have a claim for professional
negligence against his previous solicitors he would face
several difficulties, such as his residence in Brazil, the fact
that there were two previous firms of solicitors, and that his
claim would be limited to the loss of a chance, which would
be difficult to quantify.
CommentIt is interesting to contrast this judge’s comments with those
of the Court of Appeal in Davidson v Aegis Defence Services
(BVI) Ltd and another when supporting a decision not to
exercise the S33 discretion:
‘The judge was fully aware that a claim against the claimant’s
former solicitors would be based on a loss of chance of
success in the original proceedings. Litigation against
a claimant’s former solicitors was second best but it was
something which a judge could, and usually should, take
into account as best he could…’
07
Credit hire continues to be a fertile ground for disputes
as illustrated by Stevens v Equity Syndicate Management
Ltd (2014) EWHC 689 (QB). The driver of a car insured
by the respondent insurer had collided with the appellant
claimant’s car. Liability was not in issue. The claimant’s
insurers referred him to a credit hire company who made
arrangements for the repairs to his car, agreed the costs and
funded them pending reimbursement from the respondent
insurer. The credit hire company hired an alternative car for
the claimant for 28 days whilst his car was at the garage.
The repairs only started nine days after the commencement
of the hire. The hiring arrangement included excess waiver
fees to extinguish any liability for an excess arising in
the event of any damage to the hire car. The daily rate
amounted to £198.60 inclusive of VAT. The judge found that
the claimant was not impecunious in that he would not have
been exposed to an unreasonable burden had he hired a
car directly. He determined a daily basic hire rate of £75.62
inclusive of VAT by averaging the rates charged by four hire
companies at different locations local to the claimant. He
also determined the reasonable period of hire at 19 days.
The claimant appealed arguing that the judge:
1. should have concluded that he was impecunious
2. alternatively, should have identified a single basic hire
rate rather than averaging rates
3. was wrong in determining the reasonable hire period
at 19 days because the car had to be stripped first to
determine the parts required, which then had to be
ordered
Allowing the appeal only in part, the High Court judge held
that the evidence of the claimant’s means was unclear. He
stated that he could not, in all the circumstances, have
afforded to pay for a hire car, but gave no indication of what
those circumstances were, nor did he elaborate upon the
nature and extent of his funds or available means. His bank
statements showed little activity and could not have reflected
his total economic activity. The judge based his conclusion
on the continuous healthy balance in the claimant’s account,
and he was entitled to do so, particularly as liability was not
disputed and therefore the recoverability of reasonable hire
charges was not an issue. When the bank statements were
examined in some detail, the finding of lack of impecuniosity
became all the more compelling.
To establish a basic hire rate the court had to search for the
figure which a claimant was willing to pay on the basis that
he had, in fact, looked at the ordinary car hire market for a
temporary replacement. In doing that, a claimant’s evidence
that he was disinclined to spend more than necessary was
relevant, as was evidence of how a claimant had sourced
cars in different contexts. Although under a duty to mitigate
his loss, a claimant was not expected to seek details of
possible deals available from every car hire provider in a
particular locality. However, almost everyone seeking to hire
a vehicle would investigate the market by a comparative
search on the internet. A claimant could reasonably choose
to hire from a company that was not the cheapest. Questions
on that issue should be directed at exploring what he would
have been willing to pay on the hypothesis that he would
have looked into the car hire market. The judge considered
the extensive data provided and focused on companies
which provided vehicles in the appropriate group, in the
locality in which the claimant lived, and with a nil excess. It
was appropriate to consider nil excess rates as the claimant
had tried to ensure that he would not have any liability in
that regard. The judge did not rely upon the lowest rates
available because the evidence did not provide any details
concerning the additional cost of reduced or nil excesses.
He concentrated upon four national organisations whose
rates were readily accessible to someone seeking to hire
a car. It was agreed that the judge erred in averaging the
rates available from those four companies. Whilst able to
hire a car, the claimant was not especially affluent and had
demonstrated his disinclination to spend more than was
Credit Hire
08
necessary. He would have hired with a nil excess from a
reputable company with a local presence. The correct
approach to reflect the factors disclosed by the evidence
would have led the judge to a figure only slightly less than
the actual figure selected. The error had not resulted in any
detriment to the claimant.
The car was not simply left at the garage which then did
nothing for a protracted period. There was no evidence that
having stripped the car, it could have been reassembled
for the claimant to have continued driving it until the parts
arrived. There was no failure to mitigate on the part of the
claimant or the credit hire company, who for those purposes
were his agents. Therefore the claimant was entitled to a
further nine days hire at the rate identified by the judge.
CommentThis is yet another case which illustrates that the burden of
proving impecuniosity is on the claimant.
‘ a claimant was not expected to seek details of possible deals available from every car hire provider in a particular locality’
correspondingly larger proportion of the preparation. Having
regard to those factors, in the absence of the claimant’s
offer, a just order would have been for the claimant to pay
50% of the defendant’s costs of the action.
It was impossible to say that the judgment against the
defendant in the second claim was “at least as advantageous”
to the claimant as the Part 36 offer. The judgment was for
$334,967 whereas the settlement proposal was for the
defendant to pay $2.9 million. Alternatively, the proper
analysis might be that the two sums were incommensurable,
as the judgment against the defendant related only to the
second contract, whereas the proposed payment would
have related to all claims and counterclaims in both actions.
On either view, the requirement of CPR 36.14(1) was not
satisfied. Part 36.14(1) was not apt to cover a situation
where two different judgments were given at different
times in two separate actions to enable the judgments to
be aggregated and treated as if they were one. It would be
unjust as it would mean that once the claimant had obtained
a default judgment against the defendant on terms more
advantageous than the Part 36 offer, the claimant would
enjoy a “free ride” since interest would be accruing on its
claim at a rate far higher than that required to compensate
it for the loss of use of the money. The claimant would be
able to resist the defendant’s counterclaim without being at
09
‘once the two actions became decoupled.. (t)he offer was nevertheless a relevant consideration in deciding what order to make for costs’
Another commercial case which is of wider interest is
Newland Shipping & Forwarding Ltd v Toba Trading FZC
(2014) EWHC 864 (Comm).
The claimant had sued the defendant on two contracts. The
matters were initially conjoined. On 8 May 2013 the claimant
made a Part 36 offer to settle both claims for $2.9 million
including interest but excluding costs. The defendant did
not accept the offer and it expired on 29 May 2013. The
claimant’s claims were then separated into two actions. The
defendant failed to comply with case management directions
and the claimant obtained default judgment against it for
$6.6 million on the first contract. A default judgment on the
second contract was later set aside. In the second action the
claimant obtained judgment for approximately $335,000.
The defendant obtained judgment on its counterclaim for
approximately $2.5 million. The instant hearing concerned
the costs arising out of the trial of the claimant’s claim on
the second contract and the defendant’s counterclaim.
The defendant submitted that Part 36 did not apply to the
offer after the actions were separated. The claimant argued
that the judgments in each action should be added together
for the purpose of determining whether it had bettered the
Part 36 offer.
The High Court judge held that the general approach to costs
where the claimant succeeded in its claim and the defendant
succeeded in its counterclaim, used to be to make separate
orders whereby the claimant would be awarded its costs of
the claim and the defendant would be awarded its costs of
the counterclaim. However, the modern approach was to
look at the proceedings as a whole and start by identifying
which party was overall the successful party. Applying that
approach, it was clear that the defendant was the successful
party as it had obtained judgment for a sum of money which
very substantially exceeded the sum it had been held liable
to pay. However, the claimant had succeeded in its claim
and the issues raised by that claim occupied a much greater
amount of time at the trial, and must have accounted for a
Part 36
010
any risk as to costs and the longer it took the defendant
to obtain judgment, the more interest the claimant would
receive. Such a result would be completely contrary to the
purpose of Part 36, which was to encourage the parties to
reach reasonable settlements. Accordingly, once the two
actions became decoupled, the claimant’s offer ceased
to be effective. The offer was nevertheless a relevant
consideration in deciding what order to make for costs. If
the defendant had accepted the claimant’s offer it would
have achieved a more favourable overall result in the two
actions. Accordingly, the court made the following orders
for costs:
(a) the claimant was to pay 50% of the defendant’s costs
of the action on the standard basis for the period 29 May
2013 (the date the offer expired) to 15 November 2013
(the date of the default judgment)
(b) the defendant was to pay the claimant’s costs on the
indemnity basis from 29 May to 15 November. In the
absence of any special circumstances, an appropriate
commercial rate of interest on sums for which judgment
was given in US dollars was 6-month LIBOR plus 2.25%.
Interest was to run from the date when liability to pay the
sums arose until judgment was entered.
CommentAs the judge in this case indicated, the old approach of
‘costs following the event’ has now gone. The courts will
look at cases in the round and make costs orders which
reflect more accurately the true success of failure of each
party on the various issues in a claim, even where it splits
into separate actions.
The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.
www.plexuslaw.co.ukwww.greenwoods-solicitors.co.uk
Contact UsFor more information please contact:
Geoff OwenLearning & Development Consultant
T: 01908 298 216
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Although it is a commercial case, Fujitsu Services Ltd v
Department for Transport and another [Lawtel 1/04/2014] is
a reminder that any request for specific disclosure must be
proportionate. In this case the claimant applied for specific
disclosure of two categories of documents but the court
took the view that the terms used to describe the documents
were not sufficient to ensure that specific disclosure was
proportionate as required under the CPR and relevant case
law.
Specific Disclosure