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1 PI News November 2004 Team News A new edition of Peter Barrie s book on PI claims will be published by OUP in Peter Barrie the New Year with a new title Personal Injury Law: Liability, compensation and procedure. It has long been said that the world of litigation is uncertain. These words were undoubtedly aimed at conventional litigation risks (and were viewed by lawyers as a concern for the lay client?). Over recent years, however, personal injury lawyers have been forced to saddle an uncertainty themselves will I be paid? Not only may one s client not fare well in evidence but (worse still) many encountered victory in court followed by defeat at the hands of the costs officer! Left to right: John Snell; Selena Plowden; Brian Watson The forthcoming loose-leaf publication by Jordans entitled Personal Injury: Law, Practice and Precedents will contain contributions from a number of members of the PI team: Building on his experience in horse cases, John Snell is to draft the chapter on animals whilst Selena Plowden (editor of the Inns of Court School of Law Advanced Civil Litigation manual) and Brian Watson (author of Litigation Liabilities) will focus on Occupiers Liability. Finally, we are pleased to congratulate James Hassall on his appointment as a Deputy District James Hassall Judge. James began sitting on the Western Circuit on 1st September Thankfully the Court of Appeal have shown a determination to discourage litigation over the enforceability of CFA agreements. That has been followed by predictable fees in road traffic cases. The latest advance is likely to be in agreed levels of success fees in employers liability cases (see further inside). Accordingly we may now be entering the final stage of the transition to the world of no win, no fee. The key question remains: will you be a winner? As usual I have included in this edition of the newsletter summaries of decisions (largely emanating from the Court of Appeal) relevant to personal injury practitioners. In addition there are a number of articles: Adam Chippindall heralds the predicted arrival of legislation providing for periodical payments in personal injury damages cases. Tim Walsh discusses the issue of applications for disclosure of experts reports following Jackson v Marley and John Snell provides analysis of his recent experience of defending a case where the Claimant s case rested partly upon self inflicted harm caused in turn by Munchausen s Syndrome. Yours comments and suggestions are, as usual, welcome and should be addressed to me at Gabriel Farmer (Editor)

2 Liability Occupier s Liability Bottomley v Secretary and Members of Todmorden Cricket Club and Others Court of Appeal 7 November 2003 The cricket club allowed a fireworks display on its land. The display was provided by friends of the club who did not charge a fee. The Claimant was injured as a result of the display. Whilst criticising the club for failing to take reasonable care (there was no proper safety plan) the Court of Appeal added that in addition, as occupiers, the cricket club should have ensured that the contractor had adequate public liability insurance cover. This case follows a similar decision in Gwilliam v West Hertfordshire Hospitals NHS Trust, Court of Appeal 7 August 2002 and reported in the last newsletter. Scope of duty of care owed to participants during horseplay Blake v Galloway Court of Appeal 24 June 2004 The Claimant had participated in good-natured horseplay with some friends who threw pieces of bark chipping at each other. The Defendant threw a piece of bark which struck the Claimant in the eye causing a significant injury. The Claimant sued in battery and negligence. The Defendant defended alleging volenti and on the basis that the Claimant had consented to the risk of being hit by the bark even if it was thrown without reasonable care. Lord Justice Dyson held that in the absence of authority on the subject of horseplay there was a sufficiently close analogy between organised and regulated sport and horseplay for guidance given by the authorities in sporting cases to be relevant. The Court considered Wooldridge v Sumner [1963] 2 QB 43, Condon v Basi [1985] 1 WLR 866 and Caldwell and Fitzgerald [2001] EWCA civ Applying the guidance given in Wooldridge Dyson L J held that in the present case it was a breach of a duty of care owed by the Defendant to the Claimant only where the Defendant s conduct amounted to recklessness or a very high degree of carelessness. Further, the claim in battery was overturned because the Claimant must be taken to have impliedly consented to the risk of a blow on any part of his body provided that the offending missile was thrown more or less in accordance with the tacit understandings or conventions of the game. The Defendant s appeal on liability succeeded. Highway maintenance does not include provision of road signs Gorringe v Calderdale Metropolitan Council House of Lords 1 April 2004 The Claimant drove her car over the crest of a brow in the road at 50mph. The crest had masked the presence of a bus. The Claimant skidded into the path of the bus and was severely injured. The Claimant alleged breach of section 41 of the Highways Act (failure to maintain the highway) and negligence. The House of Lords held that the Court of Appeal correctly rejected breach of section 41 holding that such a duty related to keeping the highway in repair which did not include the provision of road signs. Negligence was advanced by the Claimant on the basis that a common law duty ran parallel with the highway authority s power under section 39 of the Road Traffic Act 1988 (each local authority must prepare and carry out a programme of measures designed to promote road safety and it must take such measures as appear to the authority to be appropriate to prevent accidents including the dissemination of information and advice relating to the use of roads). Having considered Stovin v Wise [1996] AC 923, Larner v Solihull Metropolitan Borough Council [2001] RTR 469 and Tomlinson v Congleton Borough Council [2004] 1 AC 46 the House of Lords rejected the submission. The Defendant had not done anything to give rise to a duty of care. The complaint was that it had omitted to erect a road sign or road marking but section 39 did not create a common law duty to act. Stress at work Barber v Somerset County Council House of Lords 5 April 2004 The Claimant was a school teacher who following restructuring took on further duties causing him to work between 61 and 70 hours a week. In early 1996 he began to complain of work overload. In the summer term of 1996 he was off work for 3 weeks with sick notes showing stress and depression. He subsequently arranged a meeting with the Headmistress who treated him unsympathetically telling him all the staff were under stress. He then met with the two Deputy Heads, one of whom was unsympathetic, the other merely urged Mr Barber to prioritise his work. In the autumn his workload increased and in November 1996 he stopped work. The agreed medical evidence was that he was suffering from moderate or severe depression. At first instance the Trial Judge allowed the claim but this was subsequently rejected by the Court of Appeal who stated: Unless he knows of some particular problem or vulnerability an employer is usually entitled to assume that his employee is up to the normal pressures of the job. It is only if there is something specific about the job or the employee or the combination of the two that he has to think harder. But thinking harder does not necessarily mean that he has to make searching or intrusive enquiries. Generally he is entitled to take what he is told by or on behalf of the employee at face value. The House of Lords described that paragraph as practical guidance but added that every case depended on its own facts and that the best statement of general principle remained that of Mr Justice Swanwick J in Stokes v Guest, Keen and Nettlefold (Bolts and Nuts) Limited [1968] 1 WLR 1776: The overall test is still the conduct of the reasonable and prudent employer, taking positive thought for the safety of his workers in the light of what he knows or ought to know where he has in fact greater than average knowledge of the risks he may be thereby obliged to take more than the average or standard precautions He must weigh up the risk in terms of the likelihood of injury occurring and the 2

3 potential consequence if it does; and he must balance against this the probable effectiveness of the precautions that he can take to meet it and the expense and inconvenience they involve The House of Lords considered that there was sufficient evidence for the Judge to find a breach of duty and that the Court of Appeal were wrong to set his Judgment aside. At the very least the school Senior Management Team should have taken the initiative in making sympathetic enquiries about the Claimant when he returned to work in June 1996 and made some reduction in his workload to ease his return. In any event his condition should have been monitored and if it had improved more drastic action taken. Lord Scott provided a dissenting Judgment emphasising that it was a legitimate function of the Court of Appeal to review the standard of care set by decisions of the lower Courts and that the Trial Judge in the present case had set the standard too high. Foreseeable risk of wife s exposure to asbestos Maguire v Harland and Wolff Plc and Another Queen s Bench Division 26 March 2004 The Claimant was the wife of a boiler maker. She became exposed to asbestos when cleaning her husband s work clothes. Consequently she developed mesothelioma. Mr Justice Morland held that the Defendant had not needed prophetic vision to foresee the risk posed to their employee s wives as a result of cleaning their clothes. The risk of serious injury to the Claimant s health was reasonably foreseeable if not obvious. Reasonably prudent employers should have kept abreast of developing knowledge. Accordingly the Defendants owed a duty to the wife of their employee. Stress causing physical injury Donachie v Chief Constable of Greater Manchester Police Court of Appeal 7 April 2004 A police officer suffered significant stress as a result of repeatedly having to replace faulty batteries in a car tagging device. He feared that whilst changing the batteries he would be discovered and exposed to serious injury or death at the hands of villains. As a result of the stress he suffered a stroke. In the first instance the Judge concluded there was a failure to operate a safe system of work and a breach of statutory duty which had caused the Claimant s stroke. However, as the Claimant had suffered no physical injury of the sort he feared and as the psychiatric injury which gave rise to the stroke was not reasonably foreseeable (because the Chief Constable was not aware that he was vulnerable to stress) the Claimant had suffered no reasonably foreseeable injury. The Court of Appeal held that the Judge had wrongly relied upon the test of foreseeability in Sutherland v Hatton [2002] PIQRP 221 and that he should have considered whether the Claimant was a primary or secondary victim. The Court held that if A placed B in such a position that A could reasonably foresee that B would fear physical injury and that as a result B sustained psychiatric or physical injury he was a primary victim. As the Judge was satisfied that there was a reasonable foreseeability of physical injury the claim should succeed. No duty to ensure independent contractor insured Payling v Naylor Court of Appeal 7 May 2004 The Claimant was injured when ejected from the Defendant s nightclub by a bouncer employed by a firm engaged to provide security. In the first instance the Judge held that the Defendant owed a duty to ensure that the firm s owner held public liability insurance and as he failed to do so he was in breach of his duty of care to the Claimant as a visitor to his club. At first glance one would be forgiven for concluding that there was very little difference in principle between this case and the cases of Gwilliam v West Hertfordshire Hospitals NHS Trust [2003] QB 443 and Bottomley v Secretary and Members of Todmorden Cricket Club reported in this newsletter. However, in contrast to the decisions in those two cases the Court of Appeal held that this case was not a case in which the Defendant owed a non-delegable duty to the Claimant. The basic principle was that his obligation was limited to ensuring that the independent contractor was competent. As to whether the night-club owner should have checked the contractor s insurance position Gwilliam and Bottomley were distinguished on the basis that the contractor in this case had provided employees who were licensed and approved by a scheme operated by the local council and police authority and the Defendant had had a significant period in which to assess their competence. Lord Justice Nueberger held that there should not, save in special circumstances, be a free-standing duty on an employer to check that his independent contractor had liability insurance or would otherwise be able to satisfy a judgment. Special circumstances included cases where the employer was himself under a duty to insure himself or where the employer accepted that he should insure himself for the protection of the public (as in Gwilliam). The Court should be slow to conclude that where a licensed scheme is in operation regulating the performance of a certain type of task it was not enough for a businessman to check that an independent contractor was so licensed before employing him for such a task. Work equipment Hammond v Commissioner of Police of the Metropolis and Another Court of Appeal 11 June 2004 A police mechanic was injured whilst carrying out maintenance on a police dog van. The Claimant maintained that the van was work equipment pursuant to the Provision and Use of Work Equipment Regulations The Judge at first instance held that the wheel nut was work equipment pursuant to regulation 2 and that accordingly strict liability attached under regulation 6(1) (work equipment must be maintained in an efficient state, in efficient working order and in good repair). The Judge relied upon Kelly v First Engineering Limited [1999] SCLR 1025 which was almost identical on the facts. The Court of Appeal held that the regulations were concerned with what might loosely be described as tools of the trade provided by an employer to an employee to enable the employee to carry out his work. The requirements of the regulations were imposed in relation to work equipment provided by an employer for use by employees at work. The regulations did not apply to an object which the employee is working on and was provided by others. Therefore, the police van 3

4 which was taken to the garage for repair was not work equipment in the context of the garage and its employees. Whereas the van might well be work equipment for a policeman driving it, it was not of the police mechanic repairing it. Negligence no duty to fit window locks on council house Stephens v Blaenau Gwent County Borough Council 15 June 2004 The Claimant s family moved to a council house in Soon thereafter the Claimant s elder sister aged 4 was found dangling her legs out of the first floor window. The Claimant s mother asked the council to fit locks to the windows but the request was refused due to the possibility of locks hindering access or escape in the event of fire. In 1999 the Claimant, aged 2 years, climbed over furniture to the windowsill, opened the window, fell and was seriously injured. After the accident the council fitted a safety catch to the top of the window in order to prevent it opening more than 2 or 3 inches. The Judge found that such a catch would have prevented the accident. The claim succeeded in front of HHJ Masterman on the basis of common law negligence for the council s failure to fit catches or to permit parents to fit them. The Court of Appeal in allowing the Defendant s appeal on liability stated that the starting point was that the council s no locks policy did not involve any breach of their duties as a local authority landlord under the tenancy agreement or any legislation. Further, the window did not present any hidden special or exceptional danger which should have alerted the council to make an exception to its no locks policy. There was also no evidence that the council s policy presented an exceptional risk to the Claimant s family s safety. In refusing to allow locks to be fitted the council were entitled to assume that the Claimant s parents would provide appropriate vigilance and apply good sense in moving furniture a safe distance from the window sill. Personal protective equipment: defect irrelevant to purpose of protection Fytche v Wincanton Logistics Plc House of Lords 1 July 2004 The Claimant was a milk tanker driver who was supplied with steel toe capped boots in order to protect his toes against heavy objects (such as milk churns) falling on them but the boots were not meant to be waterproof or to be used in extreme weather conditions. In December 1999 the Claimant was working in heavy snow on the South Downs. One of his boots leaked and the Claimant sustained frostbite in his little toe. He alleged negligence in failing to supply him with boots which were adequate to protect him from freezing conditions and breach of the Personal Protective Equipment Work Regulations 1992 for failing to maintain his boots in an efficient state, in efficient working order and in good repair. The House held that efficient state, in efficient working order and in good repair was not an absolute concept but had to be construed in relation to what made the equipment protective equipment. It was for the purpose of protecting against the relevant risk. The employer did not have a duty to do repairs and maintenance which had nothing to do with the equipment s protective function. Damages for gratuitous care Giambrone and Others v JMC Holidays Limited (formerly Sun World Holidays Ltd) Court of Appeal 18 February 2004 The Court of Appeal finally laid to rest the case of Mills v British Rail Engineering Limited [1992] 1 PIQRQ 130. Mills established that damages for care should only be awarded (i) in a very serious case and (ii) where the relative had to provide care well beyond the ordinary call of duty for the special needs of the sufferer. Mills has frequently been used by Defendants in order to defeat care claims. In Giambrone a number of holidaymakers suffered food poisoning and gastroenteritis. There were a number of claims in relation to care given to children who suffered these symptoms. The Defendant appealed against the Judge s award of care claims ranging from 120 to 275 based upon Mills. Overruling Mills the Court of Appeal held that the two principles did not apply and added that where a child suffered from gastroenteritis and received care from his family awards in excess of 50 a week should be reserved for the more serious cases. Damages for mental distress Hamilton Jones v David & Snape (a firm) Chancery Division 19 December 2003 The Claimant instructed Solicitors in 1994 to protect her and her children from the prospect of the children s father removing them to Tunisia. The Claimant s Solicitors obtained the relevant Orders from the County Court and an assurance from the United Kingdom Passport Agency that for a period of 12 months every effort will be made to ensure that standard passport facilities are not granted. In June 1996 the children s father removed them to Tunisia. In 2002 the Claimant commenced proceedings against her Solicitors seeking damages on the ground that they were negligent for failing to renew the notice to the Passport Agency following expiry of the 12 month period. She claimed general damages for mental distress (although she was time barred in respect of a personal injury claim for psychiatric damage). Mr Justice Neuberger considering Verderane v Commercial Union Assurance [1993] BCLC 793 held that the approach to damages in tort in a case where the relationship was primarily governed by the contact should be approached using contractual principles. Although ordinarily a claim founded in contract could not result in damages for injured feelings (Addis v Gramophone Co Limited [1909] AC 488) this case fell into one of the exceptions in Addis, namely that the object of the contract was to provide amongst other things peace of mind. See also Watts v Morrow [1991] 1 WLR Accordingly, it was held that the Claimant could recover and 20,000 was awarded for mental distress. Snow and ice on the Highway Section 41 Highways Act 1980 has been amended following the decision in Goodes v East Sussex County Council [2000] 1 WLR 1356 to read: S.41(1a) In particular a highway authority are under a duty to ensure so far as is reasonably practicable that safe passage along a highway is not endangered by snow or ice. 4

5 Quantum Claimant not barred from recovering common law damages following award of compensation by industrial tribunal Eastwood and Another v Magnox Electric Plc McCabe v Cornwall Council County Council and Another House of Lords 15 July 2004 Mr Eastwood sued his employers in negligence and breach of contract alleging that he had suffered a psychiatric illness as a result of the deliberate conduct of certain individuals using the machinery of the workplace disciplinary process. Mr McCabe claimed damages for breach of contract and in negligence by reason of his employer s failure to investigate allegations against him and conduct disciplinary hearings properly (prior to his dismissal) which thereby caused him a psychiatric illness. Both Claimants sued in the industrial tribunal for unfair dismissal prior to instituting Court proceedings. The Defendants maintained that following Johnson v Unisis Limited [2003] 1 AC 518 the claim should be struck out because all of the matters complained of in Court proceedings had been within the statutory jurisdiction of the employment tribunal. The question at the heart of the cases was one of determining where on the facts of any particular case the line should be drawn between dismissal (caught by unfair dismissal legislation) and conduct prior to that causing injury (which was compensatable in damages at common law). If before dismissal an employee had acquired a cause of action at law for breach of contract or otherwise that cause of action remained unimpaired by his subsequent unfair dismissal. If, however, he brought proceedings both in Court and before a tribunal he could not recover any overlapping heads of loss twice over. Whereas identifying the boundary between the common law and the statutory rights and remedies was comparatively straightforward the same could not be said of the practical consequences (and the assessment of damages) which were awkward and unfortunate. The House of Lords urged urgent attention to the situation by the legislature. Credit hire Lagden v O Connor House of Lords 5 December 2003 This case follows the decision in Dimond v Lovell [2002] 1 AC 384. In Dimond the majority of the House of Lords expressed the view that a car owner could not recover from a credit hire company fees with charges additional to the spot rate quoted by non-credit hire companies. In Lagden, however, the Claimant was impecunious. He therefore had no choice other than to incur the extra charges levied by a credit hire company. The House (Lords Scott and Walker dissenting) held that it would be appropriate in the cause of an impecunious Claimant to allow the recovery of such charges. There remained the difficulty of defining impecunious. Lord Nicholls stated that it signified the inability to pay car hire charges without making sacrifices the Claimant could not reasonably be expected to make. He invited motor insurers and credit hire companies to agree on standard enquiries or some other means which in practice could most readily give effect to this test of impecuniosity. Insurance monies to be deducted Gaca v Pirelli General Plc Court of Appeal 26 March 2004 The Claimant sustained serious injuries at work and thereafter received an ill-health gratuity payment of 10,000 from the Defendant and further payments totalling 122,787 out of a group insurance policy covering temporary total disablement and permanent total disability. The Defendant admitted liability but contended that the insurance monies should be deducted from any award of damages. At first instance the Recorder relying upon McCamley v Cammell Laird Shipbuilders Limited [1990] 1 WLR 963 did not deduct the insurance money. Reversing the first instance decision the Court of Appeal held that McCamley should no longer be followed because it was wrongly decided. The Court further held that insurance monies must be deducted from damages unless it was shown that the Claimant had paid or contributed to the insurance premium directly or indirectly. On the facts the insurance exception to the deduction of benefits did not therefore apply. Further, the benevolent exception could not apply because (i) the payment was made by the tortfeasor and (ii) the payment of benefit under the insurance policy was not equivalent or analogous to a payment made by a third party out of sympathy for the plight of a victim of an accident. Legal advice privilege Three Rivers District Council and Others v Governor and Company of the Bank of England (No. 6) Court of Appeal 1 March 2004 The Court of Appeal considered in detail the scope of legal advice privilege. The Claimant sought disclosure from the Bank of England of communications passing between the bank and its Solicitors. At first instance the Judge had found that the function of the bank s Solicitors was to prepare submissions and/or to advise on the nature, presentation, timing and/or contents of the bank s submission to, evidence for and response to requests from the enquiry. However, the Court of Appeal held that the legal advice privilege did not cover such activity. The precise scope of legal advice privilege was not clearly defined by the Court. However, it held that legal advice did not mean advice given by a Lawyer but rather advice in relation to law or advice concerning the bank s rights and obligations. It added that although legal advice privilege attached to matters such as the conveyance of real property or the drawing up of a Will, it was not clear why it should. The Court recommended a review of legal advice privilege by the Law Reform Committee. Judicial Studies Board The Board have now published the 7th Edition to the Guidelines. Practitioners should note that in addition to the inevitable increases in the bracket figure to reflect inflation the Guidelines also include a number of new categories, particularly relating to chronic pain. A somatoform disorder is now apparently worth in the region of 25,000! 5

6 Limitation Date of knowledge VWF Doherty and Others v Rugby Joinery (UK) Limited Court of Appeal 3 March 2004 The Court of Appeal considered the relevant date of knowledge for limitation purposes in respect of a claim for vibration white finger caused by the exposure to vibration from an orbital sander. The Court of Appeal held that since the knowledge of the danger of orbital sanders took time to disseminate it was a matter of fact in each case whether an employer was fixed with constructive knowledge so as to trigger its duty of care towards employees. The evidence was that in 1990 Professor Griffin of Southampton University published the Handbook of Human Vibration which stated that no employee should use a sander for more than 31 minutes a day. Accordingly, it was open to the Judge at first instance to conclude that none of the employees duties had been triggered before 1991 and upheld for other appeals for injuries sustained after Constructive Knowledge Adams v Bracknell Forest Borough Council Court of Appeal 17 June 2004 The Claimant issued proceedings against the council claiming damages for negligence in failing to provide him with suitable education. He alleged a failure by the council properly to assess his educational difficulties (which would have revealed dyslexia) and to provide him with appropriate treatment. The House considered and accepted the claim as a personal injury claim. As to constructive knowledge, the Court overruled Smith v Central Asbestos Co Limited [1973] AC 518 wherein Lord Reed stated, obiter, that the Claimant s constructive knowledge needed to be judged from a subjective point of view. Section 14(3) of the Limitation Act 1980 required one to assume that a person who was aware that he had suffered a personal injury would be sufficiently curious about the causes of the injury to seek whatever expert advice was appropriate. The House held that in the absence of some special inhibiting factor the Claimant could reasonably have been expected to seek expert advice years ago. Accordingly his constructive knowledge was well before 3 years prior to the issue of proceedings. The Claimant s application under section 33 of the Act (for dis-application of the 3 year limitation period) was rejected. Lord Walker and Lady Hale added that in applying the test for knowledge under section 14(3) some personal characteristics might be relevant to what knowledge could be imputed to the Claimant. Procedure Application to reduce payment into Court Flynn v Scougall Court of Appeal 13 July 2004 The Defendant made a payment into Court under Part 36 of the Civil Procedure Rules. Within the 21 day period for acceptance she made an application to reduce the payment into Court. However, before the Hearing of that application (and still within the 21 day period) the Claimant gave notice to accept the original payment. At first instance the Judge allowed the Defendant s application to reduce the sum in Court. The Claimant appealed. Mr Justice May held that there was no automatic stay where a Defendant issues an application to reduce a payment into Court within the period for acceptance and before acceptance. Relying on Manku v Seehra (1985) 7 com LR 90 the Court held that it had a discretion and the Claimant s acceptance did not prevent the Court from allowing a Defendant to withdraw. However, it was an important consideration to be taken into account in deciding whether he should be permitted to do so. On the facts the Court of Appeal held that the Judge should not have permitted the reduction of the payment in and that the Claimant was entitled to accept the original payment. Service of Claim Form Hashtroodi v Hancock Court of Appeal 25th May 2004 The Claimant was injured in a road traffic accident on 21 January A Claim Form was issued on 13 January 2001 (approximately 1 week prior to the expiry of limitation). One clear working day before the expiry of the validity of the Claim Form the Claimant made an application without notice for a 3 week extension of time for the service of the Claim Form. Master Tennant granted the application. A subsequent application by the Defendant to set aside the without notice extension of time and to have the claim struck out was refused. On appeal direct to the Court of Appeal the Court analysed the facts which caused the application for an extension of time to be required and concluded that the Claimant s Solicitors had simply been negligent in allowing so much time to expire prior to taking action. Accordingly they concluded that under CPR 7.5 there was no reason for the failure to serve other than incompetence and this did not amount to a good reason. The time for serving the Claim Form should not have been extended. 6

7 Defendant can renege on settlement Drinkall v Whitwood Court of Appeal 6 November 2003 The Claimant was a minor injured in a serious road traffic accident. The Defendant made an offer to settle the issue of liability in the Claimant s favour subject to 20% contributory negligence. The offer was accepted by the Claimant. Prior to the commencement of proceedings or obtaining any approval of the Court of the liability settlement the Defendant attempted to withdraw its offer. In the first instance the Judge held that the Defendant was bound by the agreement. The Court of Appeal, however, relying upon Dietz v Lennig Chemicals Limited [1969] 1 AC 170 (a decision relating to materially identical rules in the RSC) and in construing CPR 21.10(1) held that applied to partial settlements as well as settlements of all issues. Accordingly the Defendant was entitled to renege on the agreement. The Court of Appeal added that minors could be protected by issuing Part 8 proceedings in order to obtain the Court s approval of any partial settlement of a claim. The question of the applicability of the doctrine of estoppel was not explored in argument. been disclosed under CPR 35 rule 15. If an expert s views developed after fresh evidence, his earlier views in the first report were disclosable. The Court of Appeal held that did not provide courts with the power to order disclosure of earlier reports made by experts in preparation of a final report. There was no doubt where an expert made a report for legal advisors or for the purposes of a conference that such a report was subject to litigation privilege at the time it was made. It was not intended that the CPR abrogated privilege and references to the disclosure of expert s reports in 35.10(2) had to be references to the actual expert s evidence and not earlier draft reports. Please see Tim Walsh s article later in this newsletter for further discussion on this topic. Disease Protocol A pre-action protocol is now in force in relation to disease and illness claims. The protocol can be found at procrulesfin/contents/protocols/erotdis.htm. Expert report not disclosable Jackson v Marley Davenport Ltd Court of Appeal 9th September 2004 The Claimant issued proceedings following a fall from a ladder whilst at work. He instructed an expert who had prepared a report for the purposes of a conference with lawyers. Subsequently a report was served on the Defendant that referred to letters of instruction and to other documents and gave the impression that the expert might have changed his view in the report that was subsequently exchanged. On the Defendant s application an order had been made for disclosure of the first report. The Claimant s appeal against that decision had been allowed. The Defendant contended that the first report should have Statements of Truth On 8 December 2003 the Practice Direction to CPR Part 22 was amended to require a statement of truth to be made for a Schedule or Counter-Schedule of expenses and losses in a personal injury claim and any amendments to such a Schedule or Counter-Schedule whether or not they are contained in a Statement of Case. Appeals Procedure On 30 June 2004 the Court of Appeal handed down a practice note covering substantial changes in Civil Appeal procedure and Practice Direction to CPR part 52. The revised Practice Direction can be found at and the Judgement at Costs Success fee recoverable in union funded case Thornley v Lang Court of Appeal 29 October 2003 Yet another case where the Court of Appeal demonstrated a clear reluctance to accede to technical costs arguments advanced by a paying party. The Claimant, a trade union member, sought damages following a road traffic accident. The claim was compromised. However, the Defendant s insurers maintained that (whilst base costs were enforceable) the Claimant should not be able to recover the 20% success fee because the Claimant had incurred no liability to pay his Solicitors. The trade union had instructed Solicitors to act on behalf of the Claimant and therefore it was not easy to justify a finding that the Claimant came under an independent obligation to pay those Solicitors. Accordingly, the Defendant argued that no enforceable obligation to pay the 20% uplift was taken by the Claimant because no conditional fee agreement had been executed. The Court of Appeal upheld the Claimant finding that the union had agreed with their Solicitors to act under a collective conditional fee agreement or, alternatively, that the Claimant had ratified the agreement reached by the union on his behalf by availing himself of the Solicitors services. Therefore the contract was a collective conditional fee agreement and not subject to the onerous conditions of the Conditional Fee Agreement Regulations. Fixed success fees in employers liability cases The Civil Justice Council has procured a settlement relating to employers liability cases whereby a 25% success fee will be payable if the case settles pre or post issue and 100% in all cases that go to trial. A further 2.5% uplift will be recoverable by solicitors for pre-trial settlements if the claim is funded by a membership organisation (in order to cover disbursement risks). Different rules apply to barristers and the success fees are retrospective in other words will apply to all the work done on the case. 7

8 The agreement does not apply to disease cases. For a full text of the agreement (which is expected to be incorporated into the CPR in due course) see Party not to be punished for inadequate costs estimate Leigh v Michelin Tyres PLC Court of Appeal 8 December 2003 Paragraph 6.6 of the practice direction to Part 43 confers on the Court the power to take into account the parties costs estimate when assessing costs. The Claimant s estimate at the time of the allocation questionnaire was 6,000 plus VAT but the final bill amounted to 21, The Court held that it would not be a correct use of the power conferred by paragraph 6.6 to hold a party to his cost estimate simply in order to penalise him for providing an inadequate estimate. However, the following further guidelines were set out: 1 Estimates made by Solicitors of the overall likely costs of litigation should usually provide a useful yardstick by which the reasonableness of the costs finally claimed could be measured. 2 If there was a substantial difference between the estimate and the costs claimed that difference called for an explanation. 3 In the absence of a satisfactory explanation the Court might conclude that the difference itself was evidence that the costs claimed were unreasonable. 4 The Court could take the estimated costs into account if the other party showed that it relied on the estimate in a certain way. 5 Where a party showed that it had relied on the other party s relatively low estimate not to offer a settlement but carried on with the litigation expecting his potential liability for costs to be of the order indicated in the other party s estimate it would be a proper use of paragraph 6.6 to take such a factor into account in the costs assessment. The Court could take the estimates into account where it would probably have given different case management directions if a realistic estimate had been given by trimming down the number of experts called or slimming down the complexity of the litigation to control costs in a reasonable and proportionate manner. Entitlement to set-off against Costs Order in favour of legally aided Claimant Hill v Bailey Chancery Division 25 November 2003 Prior to 1999 and the repeal of section 17 of the Legal Aid Act 1988 it was permissible for a Defendant to set-off the Claimant s liability to him (in costs) against his liability to the Claimant (in costs or damages). See Lockley v National Blood Transfusion Service [1992] 1 WLR 492. Mr Justice Lightman held that the same position pertained following the inception of section 11 of the Access to Justice Act While a funded party remained protected against the making of enforceability Orders for the payment of costs that protection was not available in respect of Orders for costs used as a set-off. See also Hicks v Russell Jones & Walker Court of Appeal 27 October Conditional fee agreement unenforceable Spencer v Wood and Another Court of Appeal 15 March 2004 An example of the Court of Appeal finding a conditional fee agreement unenforceable following its decision in Hollins v Russell [2003] 1 WLR The conditional fee agreement (which cannot have been in accordance with current Law Society model) failed to specify how much of the percentage increase related to the legal representative s costs of the postponement of his fees and expenses. This was in direct contravention of regulation 3(1)(b) of the Conditional Fee Agreements Regulations. The Court declined to accept the Claimant s argument that there should be a graduated response to such breaches. If the breach had a materially adverse effect either upon the protection afforded to the Client or upon the proper administration of justice (per Hollins) the agreement was unenforceable. Failure to submit to ADR: costs consequences Halsey v Milton Keynes General NHS Trust Court of Appeal 11 May 2004 The Court of Appeal refused to order costs sanctions against litigants who had failed to take part in mediation. The Court emphasised that the general rule was that costs follow the event. There was a burden upon the unsuccessful party to demonstrate why there should be a departure from the general rule. Factors which bore upon this question included but were not limited to the nature of the dispute, the merits of the case, the extent to which other settlement methods had been attempted, whether the costs of the alternative dispute resolution would have been disproportionately high, whether any delay in setting up and attending the alternative dispute resolution would have been prejudicial and whether the alternative dispute resolution should result in a costs penalty. The High Court in the Royal Bank of Canada v Secretary of State for Defence [2003] EWHC 1841 was wrong to attach significant weight to the Lord Chancellor s announcement in March 2001 that ADR should be considered and used in all suitable cases. It was difficult to see in what circumstances it would be right to give great weight to the alternative dispute resolution pledged. Solicitors Wasted Costs Order Radford & Co v Charles and Another Chancery Division 26 November 2003 Radford & Co appealed against the making of a wasted Costs Order under section 51(6) of the Supreme Court Act 1981, as substituted by section 4 of the Courts and Legal Services Act Mr Justice Neuberger held that although Radfords were guilty of a negligent act (their failure to act within a time limit) there was no question of that negligence amounting to a breach of duty of the Court. It was necessary for the making of a wasted Costs Order that the conduct was either improper, unreasonable or negligent and also that it was in some way a breach of duty to the Court. Gabriel Farmer 8

9 Periodical Payments Most of us are used to viewing compensation for personal injury as a single lump sum award. We will soon have to alter our way of thinking. Historically, we have been familiar with one method of periodical payment, namely the Structured Settlement. It has been around for a great many years, and was given impetus when in about 1987/88 the Inland Revenue accepted that annuity payments under a settlement would be exempt from income tax (which was later incorporated in a Finance Act). However, there was no statutory basis by which the court could impose an order for a Structured Settlement. It had to come from the parties and be by consent. Then the Damages Act 1996 provided the court with power to make a periodical payment order, by S.2. Again, however, this was only where the parties consented. As far as I am aware very little, if any, use was made of this power. Whilst the benefits of structured settlements have been acknowledged widely, they have been largely confined to cases where the compensation payment would have been in the millions. To encourage more use of structured settlements, the Civil Procedure Rules were changed in October By reason of the changes to the Practice Directions of CPR Parts 21, 29 and 40 the parties to a claim for personal injuries were required to raise with the court the question of a structured settlement in all cases where the future loss was likely to equal or exceed 500,000. An unfortunate coincidence with the withdrawal from the market place of 2 major annuity providers meant that this requirement has become somewhat hollow. Now the Courts Act 2003 has been given Royal Assent. Section 100 introduces a new S.2 of the Damages Act When it comes into force the court will, for the first time, be able to impose a periodical payments order, and will be able to provide for the variation of that order, in certain circumstances. We do not know exactly when this new law will come into force. The necessary Statutory Instrument has not yet been approved by Parliament. Some suggest that it may come into force in November, but others suggest that is now unlikely. This article is not the place to go into the intricacies of the new provisions, which will require careful scrutiny. Already, however, commentators are posing questions of the new legislation: for example, the problem of whether all proposed periodical payments will be able to satisfy the requirement that reasonable security is in force; the implications of pegging such orders to the RPI, particularly where they relate to lost earnings and/or care provision, where it is well recognised that annual increases outstrip retail price inflation. On a practical level, consideration will need to be given to the structure of such awards how much of a contingency lump sum should be retained? In those cases where there may be a chance of a significant deterioration or improvement in the future, will the new provisions as to variation of an order come into play? My purpose here is simply to warn practitioners of the imminent advent of these new provisions so that we can all start to consider the practical implications. Ogden Tables I understand that the Government Actuary is likely to publish new Life Tables soon. If the recent trend of increasing life expectancy continues (which seems very likely) then we can also expect the multipliers in the Ogden Tables to increase. Practitioners will need to bear this in mind over the next few months, when they give consideration to settling cases with a substantial element of future loss. Adam C Chippindall 9

10 Expert Reports, Litigation Privilege and Disclosure I found out early in life that you never have to explain something you haven t said Calvin Coolidge (U.S. President ). It is not unusual for an expert to advise a client in conference or in writing at an early stage in litigation before preparing a subsequent report that is later disclosed. This poses the question of whether earlier reports continue to enjoy litigation privilege and are thereby immune from disclosure. There can be no doubt that, historically at least, if an expert has made a report for the purpose of a party s legal advisers being able to give legal advice to their client such a report has always been the subject of litigation privilege at the time it was made. Such a report comes into existence for the purposes of litigation and that is an end to the matter. r of the CPR modifies the common law position, however, by providing that the expert s report must state the substance of all material instructions, whether written or oral, on the basis of which the report was written. Those instructions no longer enjoy privilege against disclosure. How far, though, does this abrogation of privilege extend? In Jackson v. Marley Davenport Ltd. ([2004] EWCA Civ 1225) the claimant had suffered serious injury when he apparently fell from a ladder whilst on a construction site in Leipzig. An order was made giving each party leave to rely on expert pathology evidence and reports were later exchanged. Unfortunately, the claimant s expert concluded his report in a manner which indicated that he had expressed an earlier opinion which had since changed. The Defendant correctly surmised that there was an earlier report and sought its disclosure. The defendant argued that the cards on the table approach of the CPR and the strict terms of r gave the court power to order disclosure of earlier drafts of reports which may previously or otherwise have attracted litigation privilege. It will be recalled that r provides that a party who fails to disclose an expert s report may not use the report at the trial or call the expert to give evidence orally unless the court gives permission. Inevitably, therefore, the success of the defendant s bold submission depended on the construction of the term expert s report as it appears in r and Unsurprisingly, the Court of Appeal rejected so broad a construction on the basis that reference to the expert s report in the body of these rules can only have been intended to refer to the expert s intended evidence for the purpose of trial and not to earlier and privileged drafts of what may or may not in due course become the expert s evidence. Jackson v. Marley Davenport Ltd. should probably come as little surprise given that had the CPR intend to abrogate privilege further the limited erosion evident in 35.10(4) could have been extended. Furthermore, the Court of Appeal had already made it clear in Carlson v. Townsend ([2001] 1 WLR 2415) that it was not the intention of the pre-action protocols at least to override the privilege attaching to the report of an expert whom a party has instructed but decided not to call. Ultimately, a draft report may express one view, as was probably the case in Jackson v. Marley Davenport Ltd., but views may legitimately evolve. This most recent decision will at least avoid the spectre of detailed questions to experts calling for an explanation of views which are no longer held and are not expressed in the final report. Fortunately, it remains the case that you never have to explain something you haven t said. Tim Walsh 10

11 Causation in cases of Munchausen s Syndrome Munchausen s syndrome, more properly described as Factitious Disorder (DSM-IV ), is a behavioural disorder which results in the individual intentionally producing signs or symptoms of illness with the motive of assuming the sick role. Where a claimant suffering from Factitious Disorder is injured by a tortfeasor, difficult questions of causation arise. Is the tortfeasor responsible only for the original injury or is the tortfeasor also liable for the subsequent acts of self-harm by the claimant which perpetuate the original injury? In Thomas v. Tesco Stores Ltd (Unreported, Swindon County Court , Recorder Lamb QC) the claimant was employed in the defendant s Honiton supermarket and sustained a soft tissue injury to her wrist at work in May The orthopaedic evidence was that in the ordinary course of events the claimant s soft tissue injury would have been expected to recover within 3 to 6 months with no residual symptoms. At trial in February 2004, the claimant complained of continuing symptoms in her wrist and claimed damages on the basis that she had been unable to work since the accident as a consequence of her injury. It was the agreed evidence of the experts that she had perpetuated the symptoms by harming herself as a result of her Factitious Disorder. The claimant denied that she had harmed herself but such denial is typical of the disorder. The evidence of the Consultant Psychologist called by the claimant was that there was an element of choice in her actions in that she was consciously aware of what she was doing but he pointed out that the motivation for such actions was unconscious. He told the court that the urge to self-harm could be overwhelming but at other times could be resistible. The evidence was that the claimant had suffered from Factitious Disorder for decades but that her work record in the years leading up to May 1999 had been relatively good. The judge held that, during the years of the claimant s relatively good work record, she had found the desire to self-harm to be resistible at times. He found that the symptoms after August 1999 were not caused by any act or omission of the defendants but were caused by a resistible desire on the claimant s part to self-harm. Damages were awarded on the basis of the limited period between May and August The judge expressly found that the claimant was not malingering but explained that he had not been satisfied, on the balance of probabilities, that the claimant was acting unconsciously when she perpetuated the symptoms after August It is submitted that, once the judge had found that the claimant was not malingering, it was not satisfactory to dispose of the case on the facts alone. Since the judge had found that the claimant was not malingering, he must have accepted that the symptoms were the consequence of her underlying condition. That being the case, it was necessary to grapple with the underlying legal question of whether or not the tortfeasor had to take its victim as it found her, namely a vulnerable person with a pre-existing condition which rendered her prone to selfharm when provided with a suitable opportunity. In fact, the judge did go on to express the views he would have come to if it had been necessary to decide the case on the law. He was much influenced by the observation of Lord Hoffman in Commissioners of Police for the Metropolis v. Reeves ([2000] 1 AC 360) that it is sound intuition that there is a difference between protecting people against harm caused to them by third parties and protecting them against harm which they inflict upon themselves. It reflects the individualist philosophy of the common law. People of full age and sound understanding must look after themselves and take responsibility for their actions. The judge went on to comment that the defendants owed the claimant no duty to protect her from self-harm and that, although the accident may have given rise to the opportunity to self-harm, the consequences were too remote in the sense that they were not within the general range of the risk created by the defendant s negligence. It is submitted that the claimant s case is to be distinguished from an eggshell skull case. In the latter type of case an injury to a particularly vulnerable individual results in injuries which are far more extensive than could have been expected; the defendant is held liable for the full extent of the injuries. In this case the symptoms after the commencement of self harm could not properly be categorised as part of the full extent of the injuries because they arose from a wholly different mechanism: deliberate self-infliction by the claimant as a result of motivation which was unconscious but which, historically, she had been able to resist. The Court of Appeal has not yet been called upon to consider causation in a case of Factitious Disorder and, until such time as it does, it is likely that different judges will come to different views on the extent to which a tortfeasor is held responsible for ensuing self-harm in such cases. Practitioners will be glad to know, in the meantime, that cases of true Factitious Disorder are extremely rare. John Snell (who was instructed by Glynns Solicitors and acted for Tesco Stores Ltd). 11

12 The Personal Injuries Team Adrian Palmer QC Adam Chippindall Peter Barrie Brian Watson James Townsend Anthony Reddiford Julian Benson Selena Plowden John Snell Euan Ambrose Gabriel Farmer James Hassall Matthew Porter-Bryant Tim Walsh Elizabeth McCallum George Monck Chambers Director Julie Arrowsmith Team Clerk Heather Mings Team Clerk Guildhall Chambers, 5 8 Broad Street, Bristol BS1 2HW DX 7823 Bristol Tel Fax This newsletter is for information purposes only and is not intended to constitute legal advice. The content is digested from original sources and should not be relied upon without checking those sources. Any views expressed are those of the editor or named author.

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