238 AVMA Medica & Lega Journa In the Caims Direct, Tranche 2, 17 judgment dated 17 January 2003, Master Hurst hed that payment by the caimant s soicitor to an associated Caims Direct company when the soicitor agreed to take on a case was a referra fee. A simiar approach was adopted in TAG, Tranche 2, 18 judgment dated 15 May 2003. In both cases, payment of a referra fee breached rue 2(2)(3) of the Introduction and Referra Code and was not recoverabe. The fee was aso not recoverabe as a disbursement. Pirie v Aying 19 (18 February 2003) In this case, Master Hurst hed that cacuating the premium based on 20% of damages awarded to a successfu party was inherenty fawed, but not champertous. State of knowedge for assessment of premium In Abrew v Tesco Stores Ltd, the judge aso stated that the reasonabeness of the premium had to be considered at the time it was taken out, and without taking the more recent case-aw into account. CONCLUSION It appears that, at east in the short term, there is ikey to be further sateite itigation in reation to the meaning of materia breach of the requirements for CFAs and as to the scope of the CFA Lite. This wi be of concern to caimant persona injury awyers, who may continue to suffer deay in being paid their fees whist paying parties make arguments to avoid payment. Further uncertainty wi arise if new reguations are introduced as a resut of the consutation paper. More detaied up-to-date information on funding is avaiabe in Cordery on Soicitors. References 1 CFA Litigation Update: Law Society Gazette 100/22; 5/6/03; p. 35 2 The Accident Group Test Case Tranche 2 Issues; SCCO (Hurst J) 15/5/03 Case no.: PTH 0204771 3 Geraghty & Co (A Firm) v (1) Awwad, (2) Gustavson (2000) 1 A ER 608, (2002) 2 WLR 1041 4 The CFA Test Cases [2003] EWCA Civ 718 5 Baiey v IBC Vehices [1998] 3 A ER 570 6 Simpifying CFAs, the Conditiona Fee Agreement Regime incuding the Conditiona Fee Arrangements, Coective Conditiona Fee Agreements and Membership Organisation Reguations, CP 09/03. The paper is avaiabe at www.cd.gov.uk 7 Ahmed v Powe SCCO (Hurst J) 19/2/03, Case no: BU01 1986, SCCO ref: 0210190 8 Rahmin v Channe 4 & ITN (Master Wright) 16/5/03 SCCO HQ 9901292 9 Sarwar v Aam SCCO (Master Rogers) 7/3/03 Case no: 2002/1617, SCCO ref: 0208020 10 Caery v Gray (No 1) Court of Appea: [2001] EWCA Civ 1117, [2001] 3 A ER 833, [2001] 1 WLR 2112 and Caery v Gray (No 2) [2001] EWCA Civ 1246, [2001] 4 A ER 1, [2002] UKHL 28 11 Haoran v Deaney [2002] EWCA Civ 1258; [2003] 1 WLR 28; [2003] 1 A ER 775; [2002] 3 Costs LR 503; [2003] RTR 9; [2003] PIQR P5; (2002) 152 NLJ 1386; (2002) 146 SJLB 205 12 Abrew v Tesco Stores Ltd SCCO (Master Rogers) 16/5/03 Ref: 0212069 13 Lea v Cheshire County Counci Chester County Court (on appea from Maccesfied County Court) (HH Judge Kevin Barnett) 9/5/03 Case no: MC 202965 14 In the matters of Caims Direct Test Cases [2003] EWCA Civ 136 15 Lesie Kenneth Giddon v Loyds Maunder Ltd SCCO (Master O Hare) 31/1/03 Ref: 02011064 16 See reference 14 ante 17 Caims Direct Tranche 2 SCCO (Chief Master Hurst) 3/1/03 Ref: PTH/40/Caims Direct Tranche 2 18 See reference 2 ante 19 Pirie v Aying SCCO (Chief Master Hurst) 18/2/03 Reported on Lawte Doc No Case Law AC0104557 Soicitors negigence: Simms v Paris & Co and others Frank Pinch, Irwin Mitche, Andrew Spink QC and Cara Guthrie, Outer Tempe Chambers, London, UK BACKGROUND This case highights successfu recovery by the parents of a severey disabed chid of damages for distress, inconvenience and oss of amenity, disadvantage on the abour market and ost interest on specia damages where soicitors aowed there to be an exceptionay ong deay in the prosecution of their son s (eventuay successfu) cinica negigence case. Adrian Simms was born in March 1982 at Sorrento Maternity Hospita, Birmingham. Since birth he has suffered from severe cerebra pasy manifesting itsef in spastic quadripegia, microcephay, menta retardation and epiepsy so as to cause him profound physica and inteectua disabiity. He is a patient within the meaning in the Menta Heath Act 1983. In March 1983, Adrian s parents made a compaint about the management of his deivery. In June 1983, Adrian s mother instructed a firm of soicitors in Birmingham to act on his behaf in a possibe cinica negigence caim arising out of events during abour and deivery. A Lega Executive ( MS ) had day-to-day conduct of the fie continuousy from June 1983 unti 8 Apri 1998. During that period of just under 15 years he was empoyed by (and had conduct of the fie at) four firms of soicitors.
AVMA Medica & Lega Journa 239 Three of those firms ater became defendants in this action. The soicitors negigence caim was unusua in that the deay by the soicitors in the prosecution of the cinica negigence caim did not resut in that caim being struck out. Adrian recovered damages of 2.3 miion at the concusion of the cinica negigence action. The issues in the soicitors negigence case incuded the existence of a duty, causation and the heads of oss recoverabe. These issues are discussed in this artice. The parties agreed a settement shorty after the service of the Defence. It is first necessary to consider the conduct and outcome of the cinica negigence action that formed the background to this soicitors negigence action. CONDUCT OF THE CLINICAL NEGLIGENCE CLAIM BY MS Having obtained an incompete set of medica records from the Heath Authority, a supportive report on breach of duty was received from an obstetrician by MS in March 1986. By the summer of 1986 correspondence between MS and the soicitors to West Midands Regiona Heath Authority ground to a hat. Thereafter, MS had conduct of the caim for neary 12 more years. Athough some work was done on the case during that time, this was imited and never sufficient to make it appropriate to issue proceedings. This was despite Counse advising in 1989 that it is of the greatest importance that steps be taken reasonaby prompty to determine the issue of iabiity and Mrs Simms writing to her soicitors in 1994 in the foowing terms (which provide some support for her subsequent caim for genera damages in the professiona negigence action): It is with great concern and stress that I am writing this etter. I understand that cases such as Adrian s take years to go to Court, but it is now 11 years and I now fee we shoud be coming to setting a court date or reaching a fina decision We are not greedy peope, expecting something for nothing. A I want is a fair tria for my son and an expanation for his condition and if successfu it wi make Adrian s ife comfortabe and take the stress off the famiy. REVIVAL OF THE CLINICAL NEGLIGENCE CLAIM The matter was taken over by Frank Pinch in 1998 when the Simms instructed new soicitors. It was necessary to investigate the caim afresh and to repeat virtuay a the work. Proceedings were issued on 15 December 1998 and served on 23 February 1999. A fuy peaded Schedue of Damages was served on 13 August 1999. Adrian s parents transferred instructions to Irwin Mitche from 1 September 1999, shorty after Frank Pinch moved firms. There was an interocutory batte over the instruction of experts (see [2001] 7 Loyds Rep Med 382). By October 1999 the tria had been fixed to begin on 1 November 2000. During the tria, the parties agreed quantum at 2.3m, incusive of interest (it being accepted on behaf of Adrian that the interest payabe woud have to be reduced to refect the deay in issuing proceedings) and Court of Protection costs, subject to iabiity. Mr Justice Newman handed down judgment on iabiity in favour of Adrian on 24 November 2000 (see [2000] MLC 0284) and he provisionay approved the settement, fina approva being obtained on 3 May 2001. THE SOLICITORS NEGLIGENCE CLAIM There are no reported decisions of caims against soicitors for negigent deay in the conduct of a caim where that caim was not struck out and did proceed to tria successfuy, abeit ater than it shoud have done. In the case of Adrian Simms, it was fet (when approaching the case from first principes) that the negigent deay of his soicitors in the conduct of his cinica negigence caim had caused both him and his parents oss. Adrian and each of his parents were named as individua caimants and the three firms of soicitors with conduct of the case between October 1984 and Apri 1998 were named (and are from now on referred to) as the defendants. Duty It was argued that: The defendants owed a duty to Adrian (uncontroversia) and both his parents (more controversia) to conduct Adrian s cinica negigence caim expeditiousy and not to cause or permit deays to occur. It was foreseeabe to the defendants that if resoution of Adrian s caim were to be deayed, he woud be kept out of his damages which might, in principe, give rise to financia oss and his parents, who provided the vast majority of his care and financia support, woud have to continue providing this and they too woud suffer financia oss. On the other hand, prompt resoution of the caim woud have reduced his parents burden of caring for him and they woud have received compensation for a the care they had given to Adrian. Breach It was never in doubt that the defendants breached any duty they owed to Adrian and his parents. It was the caimants case that Adrian s caim, if propery run, woud have been brought to tria by 1 June 1989 (the notiona tria date ), 6 years after MS had first been instructed. Causation and oss As to causation and oss, it was the caimants case that the settement paid by Birmingham Heath Authority ony incuded interest on specia damages for the period between 1 June 1982 and 1 June 1989. By agreement, no interest on specia damages was paid by the Heath Authority in respect of the period from June 1989 unti
240 AVMA Medica & Lega Journa November 2000 because of the significant deay in bringing the caim. So there was a significant caim for oss of interest. Further, Adrian incurred significant ega costs in his caim against the Heath Authority over an 18-year period. He was at risk of having to meet part of such costs out of his damages because of the defendants negigent conduct of the caim pre-apri 1998. Finay, if any duty of care was owed to the parents, there were potentia caims by them for oss of earnings brought about by the deay in being reieved of the burden of caring for Adrian and for genera damages to compensate them for the oss of amenity and stress suffered by them whist carrying this burden. Adrian s osses It was accepted by Adrian and his parents that Adrian had not suffered any oss as a resut of the negigent deay because he recovered significanty greater damages in 2000 than he woud have done at the notiona tria date in 1989. The reasons for this incuded the discount rate being 3% as opposed to 4.5%, the decision in Hei v Rankin, an increase in Adrian s ife expectancy and a greater readiness on the part of the courts to award arger sums in respect of the cost of future care and other heads of damage. Therefore Adrian was ony abe to caim for any ega costs incurred by him as a resut of the negigent deay by the defendants. This did not impact on any caim by Adrian s parents. Genera damages on behaf of the parents It was argued that the deay eft Adrian s parents with the uncertainty of not knowing the outcome of the cinica negigence caim between June 1989 and November 2000. They had to ive with the severe restrictions on their ifestyes and stress that being Adrian s primary carers entaied (as refected in the quotation from Adrian s mother set out earier). In particuar, they had itte respite from Adrian who was very demanding and was prone to screaming episodes. They were unabe to give their other chidren the attention that they woud have otherwise have been abe to give them. As Adrian became oder and heavier, caring for him became more onerous for his parents and they were each unabe to continue to work. Adrian s mother had reached management eve working for a Housing Association by the time she stopped working, giving her job up in March 1991. The parent s financia osses It was argued that Adrian s parents were abe to caim the interest on specia damages not paid by the Heath Authority since the specia damages and the interest thereon beonged to them; the House of Lords in Hunt v Severs [1994] 2 A.C. 350 at 363C having decided that caimants hod specia damages on trust for the vountary carer. Adrian s mother aso caimed a Smith v Manchester award for her handicap on the abour market to refect the fact that, in the future, she wi be ikey to earn ess and/or find it more difficut to find empoyment as a resut of the extended period of time she has spent out of the abour market as a resut of the deay in the concusion of the cinica negigence action. After the settement of the cinica negigence action in November 2000 Adrian s mother remained out of the abour market because she was fuy occupied in purchasing and setting up Adrian in his own home, supervising the recruitment of commercia carers, heping Adrian to adjust to his new ifestye, as we as undergoing her own re-training and appying for jobs. The Defence It was admitted that the defendants owed Adrian s mother a duty of care on the basis that she was his primary carer, but it was denied that Adrian s father was a primary carer or that they owed him a duty at a. Unsurprisingy, the defendants admitted breach of duty. However, it was the defendants case that the notiona tria date for the cinica negigence case shoud be taken as 14 June 1993 and not 1 June 1989. It was denied that either parent suffered financia oss in the form of oss of earnings as a resut of any negigence by MS. It was argued that even if the cinica negigence action had reached tria earier, the parents woud not, as a matter of aw, have been awarded compensation for oss of earnings, Adrian being imited to a past care award in reation to the gratuitous care given to him by his mother. This was correct so far as it went. The defendants contended that, if Mrs Simms had been handicapped on the abour market as a resut of the time spent out of the workpace caring for Adrian, she shoud have incuded such a caim in the cinica negigence action. It was our view that this was misconceived. It is trite aw that neither of the parents coud themseves have brought a caim against the Heath Authority for the oss of earnings incurred as resut of caring for Adrian. Nonetheess, it is correct that, via the egitimate but indirect route of Adrian being abe to recover damages for past famiy care in the cinica negigence action, his parents coud have received some compensation for oss of earnings sustained whist caring for him. So, in principe, Adrian s negigent soicitors might have had a defence to the oss of earnings caim against them were it not for the fact that the parents caims for oss of earnings against them specificay gave credit for care damages that each of the parents had received from Adrian s cinica negigence action. Furthermore, there was no way in which care damages woud have been awarded to Adrian in the cinica negigence action to compensate Mrs Simms in respect of a future time when she woud no onger be caring for Adrian but might sti not have got back to work because of the time she had been out of the empoyment market. For these reasons we concuded that, subject to the essentia materia facts being estabished, dam-
AVMA Medica & Lega Journa 241 ages on behaf of Adrian s parents for past oss of earnings and handicap on the abour market were recoverabe in principe from the defendants. The defendants aso denied that Adrian and his parents had suffered any oss by reason of the deay in getting the matter to tria, because any award or settement at the notiona tria date woud have been ower in rea terms than that agreed in November 2000. The mutipiers woud have been at a 4.5% discount rate (not the 3% in fact achieved) and the mutipicands and the eve of genera damages woud have been ower. The defendants denied that the caimants were entited to recover the amount of the reduction in interest on past oss recovered from the Heath Authority. It was argued, somewhat bizarrey, that had the matter been contested, and notwithstanding the fact that the settement had been approved, the judge woud have aowed interest in fu for the entire 18-year period. Indeed, it was argued that: the interest on specia damages which was not paid by the Heath Authority in settement of the cinica negigence action was not paid because the caimant s soicitors and counse agreed not to seek the same. It is denied that such an agreement was reasonabe. Had the matter been contested before the court a interest caimed woud have been awarded. The defendants denied that Adrian was under any ega obigation to pay any specia damages recovered in respect of care provided by them and any interest thereon to them. In the ight of the House of Lords decision in Hunt v Severs that caimants hod specia damages on trust for their vountary carer, it is difficut to imagine that this contention coud have succeeded at tria. The settement offered by the defendants (see beow) suggests that they recognized the weakness of their defence on this point. Finay, the defendants denied that Adrian s parents were entited to genera damages for distress and inconvenience and the restrictions paced on their ives on the grounds that they were not foreseeabe and were not recoverabe in aw. We considered that it was strongy arguabe that damages for physica inconvenience and discomfort on the one hand and distress not affecting heath on the other are recoverabe in a professiona negigence action against a firm of soicitors, particuary where, as here, one object of the itigation that the soicitors were instructed to pursue was to finance a commercia care regime to reieve Adrian s parents of the burden (incuding the physica and emotiona consequences) of caring for their injured son: see Jackson & Powe on Professiona Negigence, 5th edition, paras 10-311 10-313. Further, athough it is a case arising from a different professiona reationship (that of doctor and patient) it may aso be that part of Newman J s decision in Rand v East Dorset HA [2000] Loyd s Rep Med 191, at 200 provides support for the recoverabiity in the context of the soicitor/cient reationship of damages for oss of amenity where no persona injury has been caused to the caimant s parents but where a duty is shown to exist to take steps to protect the caimant s parent from the consequences of the disabiity of their chid. The recoverabiity of genera damages woud, of course, be subject to the usua requirements of foreseeabiity and causation. Again, the settement achieved in this case seems to make some aowance for recovery of genera damages by Mr and Mrs Simms. In January 2002 the costs of the itigation between Adrian and Birmingham Heath Authority were agreed (the defendants waiving a their profit costs). No ega aid statutory charge woud appy and Adrian s damages fund woud be untouched. There remained the amount of just under 5000 representing the sum expended on wasted disbursements during the pre-apri 1998 period, which was caimed from the defendants. LIMITATION Adrian Simms was a patient and therefore continued to be under a disabiity within the meaning of the Limitation Act 1980. Accordingy he coud bring an action against the defendants at any time (section 28, Limitation Act 1980). However, time imits did appy to any action brought by his parents and coud be an issue in any simiar case. Athough a imitation defence was not peaded against Adrian s parents, one can see that on the facts some interesting imitation questions might have arisen, particuary in reation to the date of accrua of the parents cause of action and to their date of knowedge under section 14A of the Limitation Act 1980. In contract, the cause of action arises at the date of the breach. So, having issued proceedings against the defendants in June 2001, the parents coud ony recover damages consequent upon breaches of contract (i.e. continuing deay) occurring after June 1995. In tort, the cause of action does not arise unti the caimant suffers damage as a resut of the negigent act of the defendant: Cartedge v E Joping & Sons Ltd [1963] AC 758. Damage for these purposes is any detriment, iabiity of oss capabe of assessment in money terms and it incudes iabiities which may arise on a contingency... (per Stephenson LJ in Forster v Oughtred & Co. [1982] 1 WLR 86, 94). Furthermore, once injury sufficient to constitute such damage has been suffered as a resut of the negigence compained of, further injury arising from the same act at a ater date does not give rise to a further cause of action (per Lord Reid in Cartedge at p771). As Sir Murray Stuart-Smith put it in pithy fashion in the recent Court of Appea decision in Khan v RM Favey [2002] PNLR 28, at para 23 of his judgment: A caimant cannot defeat the statute of imitations by caiming ony in respect of damage which occurs within the imitation period, if he has suffered actua damage from the same wrongfu acts outside that period. In this case, it woud seem that Mr and Mrs Simms damage consisted of, for exampe: the physica inconvenience and distress of having to ook after Adrian for each day onger than they shoud have by reason of the
242 AVMA Medica & Lega Journa faiure of the proposed Defendants to obtain compensation to pay for carers; and/or the financia consequences of being kept out of their money onger than they shoud have been (i.e. ost interest ) in respect of any damages due to them for expenditure incurred by them in ooking after Adrian or for their past care of him. It seems reasonabe to suggest that Mr and Mrs Simms suffered such damage on an ongoing basis throughout the period of the defendants retainers once the notiona tria date of 1 June 1989 (on their case) had passed and up to the time of the transfer of instructions in 1998. However, for the reasons stated above, subject to any better position that coud be achieved by reying on other sections of the Limitation Act (see beow), the parents woud probaby not have been abe to recover damages for the effects on them or their financia position consequent upon any negigent deays prior to June 1995. A consideration of the appication of the date of knowedge provisions in section 14A of the Limitation Act 1980 to the facts of this case ed to the concusion that the 3 year imitation period under that section may have expired by the time proceedings were issued in June 2001. Whether or not Mr and Mrs Simms coud have successfuy reied on the conceament provisions in section 32 of the Limitation Act foowing the House of Lords decision in Cave v Robinson Jarvis & Rof [2002] 2 A11 ER 641 is doubtfu. SETTLEMENT On 15 February 2002 a Part 36 payment into court of 100 000 was made by the defendants, which was accepted, subject to court approva. The Part 36 payment consideraby exceeded the amount caimed for ost interest and ogicay incuded some aowance for the earnings and genera damages caims. On 3 May 2002, the 100 000 settement was approved by the court on the basis of the foowing suggested assessment of the way in which the award shoud be broken down: Wasted costs 5000 Lost interest 70 000 Genera damages [Mrs Simms] 10 000 Genera damages [Mr Simms] 5000 Loss of earnings/handicap on abour market [Mrs Simms] 10 000 Tota 100 000 CONCLUSION Whist there can be no guarantee that the caimants woud have been successfu if this soicitors negigence caim had proceeded to tria, the settement seems to demonstrate that the Soicitors Indemnity Fund recognized the rea risk that the defendants might have been unsuccessfu. Where new soicitors are instructed to act for a caimant in an action in which there have been exceptionay ong deays it is important not ony to pursue the origina action with a speed but aso to preserve the position of the caimant and any other affected parties in a potentia soicitor s negigence action. Limitation is very ikey to be an issue in any soicitor s negigence action where proceedings have been issued more that 3 years after the termination of the retainer of the soicitors against whom the caim is made. Acknowedgements Frank Pinch wishes to record his thanks to Marc Spuring for his hep in the cinica negigence caim and to Aan Owens of Irwin Mitche for his hep in the soicitors negigence caim. Case reviews MEDICINE RESPIRATORY ARREST FOLLOWING MORPHINE OVERDOSE D v Doncaster Roya Infirmary & Montagu Hospitas NHS Trust Mrs D was born on the 3 November 1935. For many years, she had suffered from asthma, which caused episodes of acute and severe restriction of the airfow to the ungs. In November 1997, Mrs D was an inpatient at the Doncaster Roya Infirmary, foowing an exacerbation of her asthma. Whist in Hospita, on the 9 November, a junior doctor misdiagnosed Mrs D s condition as shortness of breath caused by anxiety and hyperventiation. He prescribed a morphine-based drug known as oromorph on an as required basis. Mrs D was given two doses of the drug at 14.55 and 16.05 on the afternoon of the 9 November. Each dose was 5 mg. By 17.30 that afternoon, Mrs D had suffered respiratory arrest eading to cardiac arrest, caused by the combination of faiing ventiation due to worsening asthma and the respiratory depressant effects of the morphine the effect of the morphine was to reduce the sensitivity of her brain stem to the bood gas changes and to stop producing stimuatory signas. This ed to a steady deterioration in respiration, a reduced consciousness and cyanosis, unti Mrs D stopped breathing. As a resut, her heart did not have enough oxygen to function and it stopped beating (hence her res-