QBE Technical Claims Brief January 2012

7/28/2019 QBE Technical Claims Brief January 2012

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Technical claims briefMot pdt J 2012


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Contents

Costs 1

Costs award based on withdrawn

art 36 offer: Epsom College v Pierse

Contracting Southern Ltd - Court of

Appeal (2011) 1

Credit hire 2

Court of Appeal rules on credit hirerates and interest: Vasant Pattni v

First Leicester Buses and Darren Bent v

Highways Utilities and Another

- Court of Appeal (2011) 2

Hire claim not wiped out by refusal of

replacement vehicle from Defendant:

Sayce v TNT Court of Appeal (2011) 3

Liability 4

Court of Appeal rules on Elf and Safety:

Duffosse v Melberry Events Ltd

- Court of Appeal (2011) 4

Procedure 5

District Judge criticises claimants

expert for attempting to mislead

the Court: Walker v Brown

- Stockport County Court (2011) 5

European Court of Justice (ECJ)

rules that injured car owners

permitting uninsured driving must be

compensated: Wilkinson v

Churchill and Evans v

Equity Claims Ltd ECJ (2011) 6

Court of Appeal rules on meaning of

Package in Holiday Claim:

Sean Titshall v Qwerty Travel Ltd

Court of Appeal (2011) 7

Quantum 8

European Court of Justice (ECJ) limits

application of Rome II:

Homawoo v GMF Assurances

ECJ (2011) 8

Disclaimer 9


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T m , mot pdt J 2012

1

Costs

Costs award based onwithdrawn Part 36 offer:Epsom College v PierseContracting Southern Ltd -Court of Appeal (2011)

The defendant contractors appealed

against an award of costs made in favourof the claimant, which was based on a

Part 36 offer that had been withdrawn.

The contractors were sued by the

claimant college after flooding damaged

their dining hall. The college alleged that

the flooding had been caused by a nail,

driven through a pipe by the contractors,

but did not initially produce the damaged

section of pipe in evidence because it had

been mislaid after it was replaced. In the

absence of evidence, liability was denied.

The claimants made three settlement

offers. The first was on a Part 36 basis

before proceedings were issued. It made

no real allowance for the uncertainty over

liability and the risk that the college might

not prove its case and was rejected by the

defendant contractors. The second offer

was made after proceedings were issued

for about half of the pleaded claim. It was

also on a Part 36 basis and was stated as

not withdrawing the first Part 36 offer. The

second offer was rejected. The claimant

made one final offer not on a Part 36basis, which was also rejected.

The pipe section was then found and

disclosed in evidence. The college

withdrew their second and third offers,

leaving the first offer in place. At trial, the

defendant contractors conceded that

the leak had been caused by the nail and

the college was awarded damages with

interest exceeding the value of all their

settlement offers. The judge awarded the

claimant costs based on its second Part

36 offer. This offer had however been

withdrawn and the defendant contractors

appealed arguing that costs could not be

based on a withdrawn offer.

At the appeal, the parties agreed that

costs should not have been awarded

based on a withdrawn Part 36 offer. The

question for the court was whether the

award could be allowed to stand based on

the first Part 36 offer or under Part 44 of

the Civil Procedure Rules (CPR).

The Court of Appeal held that it should

as far as possible, put itself in the shoes

of the trial judge and be slow to impose

its own views even where the judge was

technically wrong in his approach. Part44 could not be adopted to support the

costs award, as the trial judge had not

considered this in making his award.

The trial judge had been reluctant to

base the costs award on the first Part 36

offer because there was little discount

for the uncertainty on liability and the

defendants had not acted unreasonably in

refusing it when the claimant had failed to

produce the damaged pipe in evidence.

The second Part 36 offer was far morereasonable given the absence of evidence.

The Court of Appeal held that the first

Part 36 offer was still in force and

reference to that offer could be made to

justify the costs award. The defendants

should pay the claimants costs on

an indemnity basis but only from a

reasonable period after the pipe had

been disclosed to them. The essence of

the trial judges ruling on costs was thus

preserved and the appeal dismissed.

Comment: Another illustration that when

considering costs and the application of

the CPR, the courts will look closely at the

conduct of the parties and how reasonable

they have been in making or considering

offers. In this case, the claimant collegewas penalised for failing to disclose

essential evidence until late in the day

whilst the defendant contractors were

penalised for not accepting a reasonable

offer once supporting liability evidence was

to hand.


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2

Credit hire

Court of Appeal rules oncredit hire rates and interest:Vasant Pattni v First LeicesterBuses and Darren Bentv Highways Utilities andAnother - Court of Appeal(2011)

In the above two linked appeals the Court

of Appeal ruled on two longrunning

areas of dispute between credit hirers and

defendants.

In the Pattnicase, the issue was the

claimants entitlement to interest on

credit hire charges for the period from the

end of the hire to the date of judgment.

The claimant advanced three alternative

grounds on which he should be awarded

interest:

Hewascontractuallyliabletopay

interest to the hire company and this

was a reasonably foreseeable loss

arising from the accident

Anawardofinterestshouldbemade

based on the non-credit hire charge

rates to compensate him for the loss of

use of the money that he would have

paid but for the credit hire arrangement

Hewasentitledtoastatutoryawardof

interest pursuant to section 69 of theCounty Courts Act 1984.

The Court of Appeal rejected all three

arguments. The latter two did not apply

because the claimant had not actually

made any payment and had not been

deprived of the use of his money. The

contractual liability argument was rejected

on the basis that the interest charge

constituted the cost of an additional

benefit to the claimant. It enabled him to

delay payment beyond the date it would

otherwise have been due and in the light of

the analysis in Dimond v Lovell, that was

not recoverable by a claimant who could

have afforded not to use credit hire.

In the Bentcase, the claimant had hired

an Aston Martin DB9 on credit for a

period of 94 days in 2007 at a cost of

63,406.90.

The issue was the hire rate that the

claimant could recover. The hire company,

Accident Exchange appealed an earlier

decision, which based the recoverable

rates on those the judge found that the

claimant could have obtained if he had

made reasonable efforts to hire a car on

a non-credit hire basis (which he could

certainly have afforded to do).

The Court of Appeal found that the judge

had erred in her approach to determining

the rate. The defendants had not proved

that the basic hire rate (i.e. the non-credit

hire rate) was any cheaper than the credit

hire rate and the judge had therefore been

wrong to reject the rate evidence supplied

by the hire company in favour of the

defendants evidence on average rates for

2009 (a different year). The claimant was

entitled to the actual cost of a like for like

replacement not an average rate and in thecircumstances, this was the credit hire rate.

The Court of Appeal however, rejected the

Claimants argument that it was wrong to

apply a cheaper 28-day hire rate. It was

clear in this case the repair time would

exceed 28 days and the claimant could

have mitigated his loss by obtaining a better

rate if he had contracted for a longer initial

period of hire. A reduction of 12% was

applied to the rate to reflect the saving that

a longer initial hire period would have made.

Comment Defendants will welcome the

decision in the Pattni case which effectively

puts an end to claims for interest on credit

hire for the period from the end of the hire

to judgment. The Bent decision will be less

welcome as spot (average) rates will no

longer be sufficient evidence on which to

challenge credit hire rates.


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3

Hire claim not wiped outby refusal of replacementvehicle from Defendant:Sayce v TNT Court ofAppeal (2011)

The claimant sought recovery of vehiclehire charges from the defendants. The

defendants had offered the claimant a

replacement vehicle at no cost to her. At

first instance, the defendants successfully

defeated the claim for hire on the

basis that the claimant would not have

incurred any loss had she accepted the

replacement vehicle from them.

The claimant appealed. When the appeal

was heard the Court of Appeal had

already ruled in the case ofCopley v

Lawn that a claim for hire was not wiped

out by the offer of a replacement vehicle.

A claimant was still entitled to recover an

amount equal to actual reasonable hire

charges even if they had declined the

offer of a replacement vehicle from the

defendant.

The judge hearing the appeal however,

declined to follow the decision in Copley

prompting a second appeal by the

claimant, this time to the Court of Appeal.

The parties prepared a joint statement

saying that the appeal should be allowed

as the judge had clearly erred in refusing

to follow binding authority but that the

defendant intended to make an appeal

to the Supreme Court as Copleywas

inconsistent with established authorities on

mitigation and wrong in principle.

Not surprisingly, the appeal was allowed

and the judge, who heard the first

appeal, was criticised for his failure to

adopt precedent. He should have given

judgment based on Copleywhilst raising

his concerns about the case, to give the

defendant grounds for appeal. As matters

stood, the Court of Appeal could not grant

leave to appeal to the Supreme Court in

this case due to the serious procedural

irregularities that had occurred.

Comment: The decision in Copley remains

good law until such time as defendants

successfully bring a test case before the

Supreme Court.


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Liability

Court of Appeal rules onElf and Safety: Duffosse vMelberry Events Ltd - Courtof Appeal (2011)

The elderly claimant was visiting Santas

grotto in Selfridges with her grandchildren

when she tripped over a plastic Christmastree decoration lying on the floor. She fell

and fractured her thighbone.

The grotto was manned by Santa and an

elf, whose duty it was to remove any trip

hazards on the floor. At first instance, the

judge found that there was no breach of

duty by the defendants. There was a good

safety system in place and since neither

Santa nor his elf spotted the bauble, it was

not in plain view but probably obscured by

a toy train. The claimant appealed.

The Court of Appeal found that whilst the

inspection system used by Santa and his

elf may have been excellent, the elf had

many other duties and it was possible that

she and Santa had not been as careful

as they should have been. Since the

bauble was there to be stepped on, on the

balance of probabilities it was also there

to be seen and should have been spotted

and removed.

There was no contributory negligenceon the part of the claimant as she had

stepped on the bauble whilst moving back

out of camera shot at the request of the

elf. The grotto was dark and the claimants

attention on entry would have been drawn

to the toy display on the opposite side of

the entrance.

Judgment was given for the claimant with

damages to be assessed.

Comment: The District Judge who

originally heard the case was criticised by

the Court of Appeal for taking an overly

benevolent view of the performance by

Santa and his elf... perhaps proving that

even District Judges are not immune to

the Christmas spirit.


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Procedure

District Judge criticisesclaimants expert forattempting to mislead theCourt: Walker v Brown -Stockport County Court(2011)

The claimant suffered a neck and back

injury in an accident. His solicitors

instructed a doctor to examine him who

produced a report giving a prognosis for

recovery in five months. When the claimantsaid he had not recovered, the doctor did

not re-examine him but simply produced

a revised report with the same date giving

a new prognosis for recovery 12 months

post accident.

The original report was served rather than

the revised one (presumably in error) and

the defendants solicitors were unaware

of the revised prognosis until a month

before trial when they received a witness

statement from the claimant referring to a12- month recovery period. They queried

this with the claimants solicitors who

did not reply until a little over two weeks

before the trial. The trial judge held that the

defendant was deprived of any opportunity

to increase their settlement offer pre-issue

and/or to make use of Part 36 offers to

protect themselves on costs.

The judge was highly critical of both the

conduct of the medical expert and the

claimants solicitors and ordered that the

claimant pay the defendants costs of the

action.

District Judge Horans forthright

comments about the revised medical

report are set out below:

If a doctor is changing his mind at the

behest of a claimant, there should be

a totally separate report with a totally

separate date indicating that he haschanged his original view and explaining

why he has and to do other than this is

an attempt to mislead the other party and

an attempt to mislead the court and I do

not like it one iota and I request and I am

going to order that you inform this doctor

and these solicitors, Leech and Co, they

must not do anything like that again and

I shall remember this, I shall mention it to

my colleagues to look out in particular for

Leech and Co and for Dr Evans.

An expert has a duty to the court, not to

the claimant and not to the claimants

solicitors. He has got a duty to the court

and he should not have changed his

opinion just like that without there being a

further re-examination. Had there not been

this mess up, this error by the claimants

solicitors, we would not have known about

this. You then wonder is this the tip of

the iceberg? How often is it happening?

It is unprofessional, very unprofessional.

I have half mind to adjourn the case for

a representative from Leech and Co and

for Dr Evans to attend personally before

me and explain what they are up to and,

in fact, I am going to order that they both

provide a written explanation as to how

this has come about.

Comment: Under Part 35 of the Civil

Procedure Rules, an expert witness

duty is to the court and they must report

impartially. Sometimes experts are

suspected of either lacking impartiality

or at least of being unaware of their

obligations under Part 35. It is encouraging

to see a judge taking such a firm line on

this issue.

Our thanks go to DWF solicitors for

sending us the Transcript of the Judgment

in this case.


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European Court of Justice(ECJ) rules that injuredcar owners permittinguninsured driving must becompensated: Wilkinson vChurchill and Evans v EquityClaims Ltd ECJ (2011)

In June of 2010, we reported on two

cases involving car owners who had

permitted uninsured drivers to drive their

vehicles and who were both seriously

injured when their cars crashed. In both

cases the insurers of the vehicles declined

to pay the owners injury claims on the

basis that any damages paid to them

would be immediately recoverable under

Section 151 (8) of the Road Traffic Act

1988 (RTA) (because they had permitted

uninsured drivers to use their vehicles).

The claimants argued that thisinterpretation of the RTA conflicted with

European Union policy that victims of

road traffic accidents who were injured by

negligent drivers should be compensated

regardless of whether the drivers were

insured or not.

The cases were referred by the Court of

Appeal to the European Court of Justice

(ECJ). The ECJ has now ruled that under

EU law, insurers cannot rely on Section

151 (8) to reject claims from policyholders

who have been injured whilst being

driven by uninsured drivers, regardless

of whether they knew the driver to be

uninsured or not.

The Court of Appeal will now decide

whether or not to apply the ECJs ruling.

If they decide that insurers may continue

to rely on Section 151 (8) of the RTA even

though it is in conflict of EU law, injured

claimants denied compensation in this

situation, would have a right of action

against the UK Government.

Comment: It is not certain how the Court

of Appeal will rule or if the UK Government

will now amend the RTA. Insurers will be

watching the outcome with interest as this

is not an unusual scenario.


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Court of Appeal rules onmeaning of Package inHoliday Claim: Sean Titshall vQwerty Travel Ltd Court ofAppeal (2011)

The claimant was seriously injured when

a glass door shattered at a hotel whilst he

was on holiday. He alleged that the glass

was faulty and brought a claim under the

Package Travel, Package Holidays

and Package Tours Regulations 1992

against the defendant travel agents.

The defendants denied that they owed any

obligation to the claimant. They maintained

that the claimant had entered into two

separate contracts with two companies for

flights and accommodation. The claimant

had booked his holiday by making a short

telephone conversation to one of the

defendants clerks. Neither the claimantnor the clerk could remember the detail of

their conversation nor was there an invoice

available. The claimant had however,

been provided with a statement showing

the individual costs of the flights and

accommodation and three unspecified

service fees.

At first instance, the court dismissed the

claim after ruling as a preliminary issue that

the claimant had purchased two separate

services rather than a package and

the travel agents were not a party to the

holiday contract. The claimant appealed

arguing that the pre-arranged combination

of services had been sold at an inclusive

price.

The Court of Appeal ruled that to assess

whether the components of the holiday

were sold or offered at an inclusive

price, it needed to determine whether

they were being sold as components of

a combination or separately but at the

same time. In this case, the travel agentshad advertised a last minute get-away

at an inclusive price and at no time had

they suggested that either the flights or

the accommodation were available for

purchase separately. The service fees

were also presented at least partly, as

the price of putting the package together.The service fees could not be attributed

between flights and accommodation

and there was no way of determining the

separate costs of either of these inclusive

of service fees.

The travel agents were liable to the

claimant for the proper performance of the

obligations of the contract.

Comment: In the lead judgment, Lord

Justice Tomlinson commented that whilst

consumer protection was not the primary

object of the European Directive which

underpinned the regulations, one aim

was to make it more straight forward for a

claimant to obtain recovery from a single

domestic supplier in the event of some

failure of the holiday providers.


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Quantum

European Court of Justice(ECJ) limits application ofRome II: Homawoo v GMFAssurances ECJ (2011)

The claimant was seriously injured in a

road traffic accident, in France by a French

motorist in August of 2007. He broughtproceedings in England and argued that

his compensation should be assessed

by reference to English law, which would

mean a far higher award than under

French law.

Under European Community regulation

864/2007 known as Rome II the law

used to determine damages is usually

the law applicable in the country where

the tort (in this case a motor accident)

occurred. Prior to the implementation

of Rome II, the law used in assessing

damages for an English claimant injured

abroad was the English law.

The High Court was asked to determine

whether Rome II was in force at the

time of the accident (see September

2010 Brief) but this was by no means

straightforward.

The claimant argued that Rome II did

not apply to events before 11 January

2009, as that was the application datespecifically referred to in the regulation.

The defendant argued that it applied to

any determination by the court conducted

on or after 11 January 2009 provided the

original tort occurred after 20 days from

the date that Rome II was first published

i.e. from 20 August 2007 (European

regulation is normally deemed to be in

force 20 days after publication unless

otherwise specified).

The High Court realising the need for

consistency and the large number of

cases that might be affected by their

ruling, referred the case to the European

Court of Justice (ECJ).

The ECJ has now ruled that Rome II

applied only to torts giving rise to damage

occurring after 11 January 2009 meaning

that the claim in this case was not subject

to it and damages would be assessed

under English law.

Comment: The ECJ has now ended the

uncertainty effecting cross-border claimsoccurring between 20 August 2007 and

11 January 2009. Damages in England

and Wales are amongst the highest in

Europe however and the fact that these

claims will now achieve damages based

on this jurisdictions law will make most of

them more expensive.

Our thanks go to Berrymans Lace Mawer

solicitors for drawing this case to our

attention.


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Completed 21 December 2011 written

by and copy judgments and/or source

material for the above available from

John Tutton (contact no: 01245 272

756, e-mail: [email protected]).

Disclaimer

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QBE Technical Claims Brief January 2012

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