Insight from Horwich Farrelly s Large & Complex Injury Group

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1 Insight from Horwich Farrelly s Large & Complex Injury Group Issue #2 11 February 2016 Alexander House 94 Talbot Road Manchester M16 0SP T F Page 1

2 Save the Date THE POT OF GOLD AT THE END OF THE RAINBOW The Large and Complex Injury Group s annual conference will take place on 21 April 2016 at the Wellcome Collection, London. This year s conference will be looking at the Honesty, Dishonesty and the grey areas in-between. To register your interest please click here. Page 2

3 Welcome to the second edition of Insight. This week s case reports look at the need for there to be a causal link between an alleged criminal offence and damage sustained by a third party for liability to be established; the continuing saga of Dunhill in which the claimant s mental capacity has been the central issue; and yet another case looking at how Part 36 should be interpreted. Malcolm Henke, Partner & Head of LACIG RTA/Liability Although it relates to criminal proceedings, R v Taylor (2016) UKSC 5 is a helpful reminder that even where a serious road traffic offence is committed, it cannot found liability unless there is a causal connection between the offence and the accident in which the vehicle was involved. In June 2012, the appellant driver and another man took a van belonging to the other man s employer without consent. While driving it, the driver collided with a scooter on a bend in a narrow country lane. The scooter driver was killed. The appellant was later found to have been over the drink drive limit and uninsured at the time of the accident. He was charged jointly with the other man with aggravated vehicle taking contrary to S12A Theft Act 1968, and with causing the death of the scooter driver while driving uninsured contrary to S3ZB Road Traffic Act At the hearing of the case, the Crown accepted (following careful investigation) that there was no fault in the manner of the appellant's driving and a not guilty verdict was directed on the road traffic count. The judge held that fault had to be proved in relation to the accident on the aggravated vehicle taking count, but the Crown appealed that decision. The appeal was allowed on the ground that previous authority that established that no element of fault was required in the offence of aggravated vehicle taking remained binding. Page 3

4 The Court of Appeal certified a question of law of general public importance for consideration by the Supreme Court, namely: was an offence contrary to S12A (1) and (2)(b) of the 1968 Act committed when, following the basic offence and before recovery of the vehicle, the defendant drove the vehicle and without fault in the manner of his driving the vehicle was involved in an accident which caused injury to a person? The offences both required a direct causal connection between the driving and the injury Allowing the appeal, the Supreme Court held that the answer to the certified question was "no". The offences in S3ZB and in S12A (2)(b) both required a direct causal connection between the driving and the injury. S12A was in no sense a regulatory or quasi-criminal enactment. Aggravated vehicle-taking was a serious crime. The aggravating features which differentiated the S12A offence from the basic offence exposed a defendant to a maximum sentence of 14 years' imprisonment. The 1968 Act treated someone who had been party to the taking of a vehicle without authority as having control over it thereafter: he was in a position to take positive steps to ensure that it was driven safely and not in a manner which caused personal injury or damage to property. The relevant fault in the instant case was the fault in the driving, which was necessary to establish the causal connection between the driving and the accident. The fact that the appellant had excess alcohol in his blood established that he was guilty of the summary offence under S5 (1)(a) but not that that circumstance had anything to do with the accident. His driving could not be said to have caused the accident if it merely explained how the vehicle came to be in the place where the accident occurred. The applicable test was that there had to be "at least some act or omission in the control of the car which involved some element of fault, whether amounting to careless/inconsiderate driving or not, and which contributed in some more than minimal way to the death. The one respect in which S12A imposed strict liability was that the offence could be committed not only by the driver but by anyone else who was party to the basic offence under S12(1) and was in, or in the immediate vicinity of, the vehicle at the time of the dangerous driving, injury or damage. Comment The short point to be taken from this case is that even where a driver commits one or more criminal offences at the time of an accident, it is always worth considering whether or not they are causally connected to any loss or damage sustained by a third party. As this case illustrates, that may even relate to a conviction for drink-driving. Page 4

5 RTA/Settlement Readers will be familiar with the long running case of Dunhill v Burgin which ultimately led to the Supreme Court ruling that the claimant had lacked capacity on the date of settlement and should have had a litigation friend when the claim was commenced. It found that the settlement figure was a "gross undervaluation" of the claim. In an effort to mitigate her loss, the claimant settled the personal injury claim against the defendant Burgin on the basis that she would receive 55% of the value of her claim, with those damages to be assessed. The next stage in the saga has been reached in Dunhill v W Brook & Co and another (2016) EWHC 165 (QB) in which the claimant brought proceedings for breach of contract and professional negligence against the lawyers who had represented her in her original personal injury claim. She sought to recover any shortfall in her damages caused by the lawyers' negligence and any damages arising from the cost of mitigating her loss. The claim arose from an accident in which the claimant was struck by a motorcycle while crossing the road. She sustained a fairly severe head injury resulting in impairment to her cognitive function, but was described as making a good recovery over the next two years. Liability was in issue and a split trial was ordered. In the run-up to trial, it transpired that one of the key witnesses for the claimant was in prison and another could not be found. Both were taking drugs. Shortly before trial, a clinical psychologist reported that the claimant's brain injury was much more severe than had originally appeared to be the case and had resulted in a more significant, life-limiting impairment. However, that report had not been commissioned as part of the legal proceedings and did not appear to have been made available to the claimant's counsel. On the day of trial, a trainee solicitor and counsel attended for the claimant. She was advised to accept a settlement offer of 12,500. It was explained to her that the absence of her key witnesses affected her prospects of success and that there was likely to be a substantial reduction in any damages awarded due to contributory negligence. The claimant reluctantly accepted the settlement offer. She subsequently instructed new solicitors and sought to re-open the claim. The issue was whether the lawyers had breached their duty to the claimant by advising her to settle on a full and final basis rather than on the basis of a percentage of the full value of the claim, or without any mechanism for provisional damages. Page 5

6 ..a solicitor was not liable in negligence if he acted reasonably on the advice of appropriate counsel who had been properly instructed Dismissing the claim, the High Court judge held that if a firm of solicitors chose to use a trainee to act on a client's behalf, it was not the case that a lower standard of care applied than if the firm had used a qualified solicitor. That standard of care did not impose on practitioners any liability for damage resulting from what turned out to be errors of judgement, unless the error was such that no reasonably well-informed and competent member of that profession could have made it. Although a solicitor had to exercise his own independent judgement, he was not liable in negligence if he acted reasonably on the advice of appropriate counsel who had been properly instructed. Counsel had acted reasonably in relying on the medical reports that were available to him. There was no basis for concluding that he had been negligent in his assessment of the available evidence. He had been entitled to consider that, without the key witness evidence, the claimant might have lost altogether. He had also been entitled to take into account that a significant finding of contributory negligence was likely. He was not negligent in failing to apply for an adjournment due to the absence of the main witness, since he had considered that option and decided that, in view of the reason for the absence, such an application was unlikely to succeed. Nor was he negligent in doing his best to assess quantum. On the balance of probabilities, the motorcyclist's lawyers would not have agreed to settle the claim on anything other than a full and final basis. Therefore, the claimant's counsel was not negligent in failing to negotiate for provisional damages. If counsel had been negligent, then the trainee solicitor sent to attend court to assist him would not have been knowledgeable or experienced enough to detect it. Accordingly, if counsel had been found negligent then the solicitors would also have been negligent. Comment Whilst this part of Dunhill has been decided on the facts, the underlying message of the case as a whole is that both parties to any action must be satisfied that the claimant has the necessary mental capacity to litigate and that issue must be determined at the outset. The original action arose out of an accident on 25 June That claim was settled at the door of the court on 7 January More than 13 years later the damages are still to be assessed. If there is any suspicion about a claimant s capacity there is no choice but to address the issue head-on and obtain confirmation, either way. Page 6

7 Part 36 For a second week we feature a case under this heading, which serves to show that despite all the efforts to clarify the operation of Part 36, it still provides fertile ground for disputes. In the commercial case of Sugar Hut Group Ltd and others v A J Insurance (2016)EWCA Civ the appellant/ claimants appealed against the costs order made following a quantum hearing in their negligence claim against the defendant/respondent insurance brokers. Following a fire at their nightclub, the claimants had unsuccessfully claimed from their insurer in respect of property damage, business interruption losses and accountants' fees. They then sued the defendant for negligence in placing the policy. Liability was compromised on the basis that the defendant would pay 65% of the claimants recoverable losses. The property damage costs were agreed. The broker made payments on account of 813,000. It made a Part 36 offer to pay a further 250,000 inclusive of interest, based on a gross business interruption figure of 600,000, which the claimants rejected, maintaining that the business interruption loss was 860,000. The judge upheld the claim for business interruption losses up to 570,000 gross. He held the accountants' fees irrecoverable. He held that interest was payable throughout the relevant period; that had been in dispute. The gross recoverable amount was 1.7 million; the amount recoverable from the defendant was 1.09 million, meaning that the broker was to pay the claimant 277,000 over the amount paid on account. The judge ordered that the defendant should pay 70% of the claimants costs of the assessment of damages up to 13 June 2014, which was 21 days after the defendant's Part 36 offer. He ordered that the defendant should pay the claimants costs after 13 June relating to the assessment of interest. He further ordered that the claimants should pay the defendant s costs of the assessment of damages after 13 June. He held that the claimants failures on discrete points of the business interruption claim justified the 30% costs reduction. He noted that, although the Part 36 offer had been beaten, and the 600,000 business interruption figure had not been a free-standing offer which the claimants could have accepted, it had been unreasonable for them to continue to pursue a business interruption claim of 860,000 after that point. He also held that the claimants failure to make timely disclosure had been unreasonable. In their appeal the claimants argued that the judge had effectively treated the Part 36 offer as having been successful; further, in both reducing their costs before 13 June and requiring them to pay the defendant's costs after then, he had penalised them twice for the same matter. Page 7

8 Allowing the appeal, the Court of Appeal held that the judge had erred in his approach to the Part 36 offer and in mischaracterising the claimants conduct as unreasonable. He had effectively characterised their pursuit of a business interruption claim in excess of 600,000 after receipt of the Part 36 offer as misconduct. In doing so, he had converted what was not an offer to compromise the business interruption claim at 600,000 into just such an offer. He had treated the offer letter as containing distinct offers in relation to business interruption and interest and had treated the claimants on the footing that they should have accepted the first offer, notwithstanding the fact that he had accepted that the first could not be accepted without acceptance of the second...it could not be misconduct simply to pursue a claim greater than the amount accepted by the defendant; something more was required to render pursuit of the claim unreasonable Further, it could not be misconduct simply to pursue a claim greater than the amount accepted by the defendant; something more was required to render pursuit of the claim unreasonable. The matters discussed by the judge did not justify the characterisation of the claimants conduct as unreasonable. The main judgment had not described the claim or any part thereof as exaggerated. Significant parts of the business interruption claim had failed, but that did not mean that it had been exaggerated. Moreover, the conduct which the judge had taken into account regarding costs incurred after 13 June was the same which had informed the withholding from the claimants of 30% of their costs incurred before 13 June. The claimants had therefore been penalised twice for the same shortcoming. The judge's reference to the disclosure exercise was something of a makeweight. The defendant had been able to make a well-judged offer after disclosure. The judge had commented that the claimants delay in giving disclosure had caused difficulties to the defendant in taking appropriate precautions to protect its position; that was only justified insofar as earlier disclosure might have enabled the defendant to make its offer earlier, and it could not be inferred that an earlier offer would have resulted in a saving of costs. The appellate court re-exercised the judge's discretion. There was no basis on which it was appropriate to deprive the claimants of their costs after 13 June, still less to require them to pay the defendant's costs. Their failure to succeed on all their claim was adequately reflected in the deduction of 30% of their costs. Comment Although the claimants appeal was successful, this case illustrates that even where a party succeeds in its substantive case, a judge may still exercise his discretion (under CPR 44.2(2) (a)) to make an issues based costs order where that party has failed on discrete parts of its claim. This means that although Part 36 was amended to remove arguments about costs where a Part 36 offer was a near miss, there is still room for argument where parts of a claim are dismissed. Page 8

9 Disclaimer & Copyright Notice The contents of this document are considered accurate at the time of delivery. The information provided does not constitute specific legal advice. You should always consult a suitably qualified solicitor about any individual legal matter. Horwich Farrelly Solicitors accepts no liability for errors or omissions in this document. All rights reserved. This material provided is for personal use only. No part may be distributed to any other party without the prior written permission of Horwich Farrelly Solicitors or the copyright holder. No part may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical photocopying, microfilming, recording, scanning or otherwise for commercial purposes without the written permission of Horwich Farrelly or the copyright holder. Horwich Farrelly 2016 Page 9

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