Legal Watch Personal Injury February 2014 Issue 006
Civil Procedure/Costs budgeting With costs budgeting proving to be the current hot potato, it is not helpful that two versions of a similar court form are in circulation, leading to further confusion. This issue was dealt with in Porbanderwalla v Daybridge Ltd [Lawtel 11/02/2014]. The claimant, supported by the defendant, appealed against a decision that the parties recoverable costs should be limited to the court fees incurred because they had failed to submit costs budgets. The claimant s claim was for damages consisting mostly of credit hire charges. Service was acknowledged and a defence filed. Both parties were represented by solicitors. It was admitted that an accident had occurred but liability and quantum were in issue. A notice of proposed allocation to the multi-track was sent to both parties in form N149C pursuant to CPR PD 26 2.1. There was no reference on that form to any requirement to file a costs budget. Both parties filed directions questionnaires but not costs budgets. The claimant sent a covering letter with the questionnaire stating that a Precedent H costs budget form would be filed in advance of the case management hearing. The district judge considered the statements of case and the questionnaires and made an order allocating the claim to the multi-track and limiting the recoverable costs for each party to the court fees because they had failed to submit costs budgets in form H. In This Issue: Civil Procedure/Costs budgeting Civil Procedure/Expert evidence Costs/Mental capacity Costs/Calderbank offers Police/Immunity from suit Events Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next months: MBIG Seminar 22.05.2014 - Wellcome Collection, London, NW1 The claimant submitted that CPR 3.13 requiring parties to file and exchange budgets in a multi-track case did not apply until the case had been allocated to the multi-track by the judge s order; no date was specified in the form N149C served under CPR 26.3(1) for the filing of costs budgets, and there had been no case management hearing, so that 02
the requirement to file a budget was never triggered. Allowing the appeal, the County Court judge held that CPR 3.13 expressly provided that a budget should be served and filed by the date specified in the notice served under CPR 26.3(1) or, if no such date was specified, seven days before the first case management conference. That would be before allocation. That was the specific rule governing the procedure at that point, and its terms were clear. To apply the clear terms of CPR 3.13 did not deprive CPR 3.12 of meaning or effect, for it was only if the case was subsequently allocated to the multi-track, that the provisions of CPR 3.14 and following had effect. In that sense that section of the rules applied to multi-track cases. But CPR 3.13 operated prior to that allocation. There appeared to be two versions of form N149C in circulation: one providing for a costs budget to be filed by a particular date, and the other not CPR 26.3(1)(b)(i) required the notice of proposed allocation to specify any matter to be complied with by the date specified in the notice. The link between that rule and CPR 3.13 was plain, and they should be read together. The notice envisaged by CPR 3.13 was a notice which would specify any matter to be complied with by the date specified in the notice. Rule 3.13 adopted the date in the notice as a trigger in that context on the basis that the notice would specify when that matter was to be complied with. Rule 3.13 referred to a CPR 26.3(1) notice which specified a date by which the costs budget was to be filed. In the absence of a requirement for the exchange and filing of a budget in the notice, or a case management conference, the requirement was not triggered. (Per curiam) There appeared to be two versions of form N149C in circulation: one providing for a costs budget to be filed by a particular date, and the other not. Porbanderwalla v Daybridge Ltd [Lawtel 11/02/2014] 03
Civil Procedure/Expert evidence The case of Neile v University Hospitals NHS Trust [Lawtel 11/02/2014] is a helpful illustration of the courts current approach to controlling expert evidence. It also confirms how important it is to select carefully the expert witness instructed. The claimant had been left totally blind, partially deaf and with balance problems and facial paralysis following illness. She had presented symptoms to her GP which she alleged should have alerted a reasonably competent doctor to the strong possibility that she was suffering from meningitis and that she should have immediately been treated with penicillin and transferred to hospital. In order to succeed in her claim she had to establish that the doctor ought to have diagnosed meningitis, treated it, and that the treatment would have made a difference to the outcome. One of the Trust s experts produced a report which said that the claimant s injuries might not have been caused by meningitis. The claimant submitted that she should be able to meet like-with-like by allowing her expert to prepare an additional report which would directly answer the questions raised by the Trust s expert. With regard to a separate and additional expert s report, the claimant submitted that since she had instructed an ophthalmologist rather than a neuroophthalmologist, as the Trust had, the experts were not matched and she should be able to instruct somebody else. There was no good reason for permitting a change in expert when the one instructed was perfectly able to deal with the issue The Trust contended that the claimant was expert-shopping. Allowing the application in part, the deputy High Court judge held that the decision to permit additional evidence was a case management decision; there had to be good reason for doing so, the overriding objective was to deal with the cases justly and expeditiously, and each application was fact sensitive and case specific. The later the request, the less willing a court should be to grant it. In the instant case, the trial was listed for late March 2014. There was force in the claimant s argument that the Trust, through their expert, had raised for the first time in the expert s report, that the injuries had not been caused by meningitis. That argument had not been raised in the Trust s defence. Further, the claimant s expert was already on board and was able to assist the judge. Allowing additional evidence was proportionate in circumstances where there was no bad faith on the claimant s part. The claimant s expert was able to meet the issues raised by the Trust s expert and it was in the interests of justice to allow a new report. With regard to the instruction of a new expert, the claimant s current expert had dealt with causation and damage to the optic nerve. He appeared to have no difficulty coming to a perfectly proper opinion and named neuro-optics as one of his areas of expertise. There was no good reason for permitting a change in expert when the one instructed was perfectly able to deal with the issues. The fact that one expert had more experience than another was not uncommon. Neile v University Hospitals NHS Trust [Lawtel 11/02/2014] 04
Costs/Mental capacity The case of Blankley (Protected Party) v Central Manchester & Manchester Children s University Hospital NHS Trust (2014) EWHC 168 (QB) looks at the impact of a change in mental capacity on the validity of a CFA. The claimant/appellant had undergone surgery at a hospital run by the defendant/respondent Trust. She was left with brain damage and instructed a firm of solicitors to begin a clinical negligence action. Because she did not have capacity, she acted through a litigation friend. In February 2005, liability was agreed with damages to be assessed. By May 2005, the claimant had regained capacity and entered into a conditional fee agreement (CFA) with her solicitors. In February 2007, she lost capacity again. The CFA covered all work up to February 26, 2007. Thereafter, the claimant acted through a litigation friend, who was subsequently appointed to act as her receiver. The proceedings were settled three years later. The claimant s solicitor submitted a bill of costs claiming payment on the basis of the CFA. Part of the bill related to costs incurred after March 2007, when the claimant was acting through her litigation friend. The Trust argued that no costs were recoverable in relation to that period, because the CFA had automatically terminated on the claimant s loss of capacity in February 2007, leaving the solicitors without any retainer. The costs judge agreed. He held that the litigation friend had neither adopted the CFA nor entered into a new one. The central issues in the claimant s appeal were (i) whether supervening incapacity terminated a solicitor s retainer; (ii) if the CFA had been frustrated, whether the litigation friend had adopted it upon his appointment; (iii) whether S7 Mental Capacity Act 2005 entitled the solicitors to payment for the supply of necessary services; (iv) whether the defendant was estopped by convention from denying that the solicitors had authority to act for the claimant. Allowing the claimant s appeal, the High Court judges held that it was common ground that the supervening mental incapacity of a principal terminated the actual authority of his agent. However, the termination of a solicitor s authority by reason of mental incapacity did not ordinarily and of itself frustrate the underlying contract of retainer. In particular, a retainer such as that in the instant case, entered into with a person known to have fluctuating capacity, was not frustrated by any loss of capacity. The supervening inability of an individual to continue to instruct his solicitor personally, with the likelihood that a deputy would be appointed, did not significantly change the nature of the contract of retainer. In the CFA, the obligation to provide instructions was express, and would be implied in any event. It followed that an inability to provide instructions was not something that was not dealt with by the contract. Supervening incapacity might cause a delay in performance of the obligation to provide instructions, but that would be a matter for the enforcement of the contract terms. Even if the delay was not within the scope of the contract terms, it would only amount to a frustrating event if it fell outside what the parties could reasonably contemplate at the time of contracting. In the instant case, the possibility that the claimant might lose capacity had been within the reasonable contemplation of the parties. To treat the retainer as terminated by what might be a fleeting episode of incapacity would be unjust and unreasonable; the doctrine of frustration was to be confined within narrow limits and was not lightly to be invoked...the termination of a solicitor s authority by reason of mental incapacity did not ordinarily and of itself frustrate the underlying contract of retainer 05
If, contrary to the foregoing, the CFA had been frustrated, the question arose as to the basis on which the solicitors had acted following the appointment of the litigation friend. He had full authority to conduct the proceedings on the claimant s behalf. Given that he had either given instructions to the solicitors or, at the very least, ratified the steps that they had taken, it could not be disputed that the solicitors conduct of the proceedings had been authorised by the claimant s duly empowered representative. The defendant therefore bore the burden of proving that the claimant was not liable for her solicitors fees. Had the CFA been frustrated, it would have ceased to exist and the litigation friend could not have adopted it. Had it been necessary to decide the point, the court would have found that the litigation friend had not implicitly entered a new CFA with the solicitors. The claimant s solicitors pursuit of the proceedings fell within the definition of necessary services in S7(2) of the 2005 Act. The appointment of a receiver or deputy did not mean that S7 could no longer be relied upon. In any event, since the solicitors had been instructed by the litigation friend, S7 had no application. The claimant s solicitors had been acting with the claimant s authority whether or not the CFA remained in force, and it was not necessary to rely on any estoppel to establish that. However, had they been acting without authority, the defendant could not have been estopped from so contending. Solicitors warranted that they had the authority of the party they purported to represent, and the opposing party s reliance on that warranty could not give rise to any form of estoppel if it subsequently proved to have been misplaced. Blankley (Protected Party) v Central Manchester & Manchester Children s University Hospital NHS Trust (2014) EWHC 168 (QB) 06
Costs/Calderbank offers Although Walker Construction (UK) Ltd v Quayside Homes Ltd and another (2014) EWCA Civ 93 is a commercial case it is of wider interest when considering how courts now approach the awarding of costs and the impact of Calderbank offers. The judge had failed adequately to consider whether the claimant s Calderbank offer was reasonable The appellant/claimant had entered into a contract to carry out drainage and highway works at the respondent/ defendant s building site. It brought proceedings to recover sums which had been retained by the defendant. Proceedings were staying pending adjudication and the adjudicator awarded the claimant approximately 23,400. That sum included 8,941 in respect of remedial works to defects the claimant alleged had been caused by the defendant s building operations. That sum had not been certified by the defendant s project manager. The defendant paid the award but maintained that the claimant s works had been defective and counterclaimed for over 169,000. The claimant made a Calderbank offer to pay the defendant 30,000 including costs. The defendant made a Part 36 offer in May 2011 to settle its counterclaim for 100 (one hundred pounds) plus costs. By that date its costs were approximately 55,000. At trial the defendant was awarded a net sum of 10,885 on its counterclaim. Its further counterclaim to recover the 8,941 that it had already paid in respect of the remedial works was dismissed. The judge concluded that the defendant had not pleaded a breach of contract in relation to that sum and there was no case for recovery in restitution. The claimant was ordered to pay the defendant s costs on the standard basis from after adjudication to the expiry of the defendant s Part 36 offer and, for the period after that, on the indemnity basis. The costs were over 345,000. The claimant appealed arguing that the judge s approach to costs had produced a result that was completely disproportionate to the defendant s actual recovery on its counterclaim. The defendant cross-appealed and submitted that the judge was wrong to have rejected the claim for 8,941 as the claimant had not proved its entitlement to that sum. Allowing the appeal and dismissing the cross-appeal, the Court of Appeal held that the defendant s counterclaim was effectively a claim to set off damages in respect of allegedly defective works, therefore the burden of proof at trial was on the defendant. The claimant was not seeking to recover any sum in respect of those works at trial, as it had already been paid pursuant to the adjudication. The defendant had not called any evidence at trial in support of its contention that the claimant s drainage works were in breach of contract as defective. Accordingly, the judge had no basis on which he could reach a final determination in relation to the defendant s claim for damages for breach of contract. It was not entitled simply to point to the absence of a certificate to support its assertion that it was entitled to repayment because the adjudicator was wrong. The mere absence of a certificate from the project manager did not prevent the claimant from having a contractual entitlement to payment. The adjudicator s award was therefore bound to stand. The court would not lightly interfere with a trial judge s exercise of discretion as to costs, but the judge was plainly wrong in the instant case for the following reasons: (a) he had failed adequately to take into account the factors in CPR 44.3; (b) the defendant had delayed for two years in putting forward its amended defence and counterclaim for over 169,000, before amending it shortly before trial to approximately 07
84,000; (c) the defendant made a net recovery at trial of only 5.93% of its original claim, and 11.92% of its amended claim; (d) against that background it was impossible that a proportionate result in costs terms could be that the claimant should pay the defendant s costs of over 345,000; (e) the judge paid no regard to the defendant s conduct in pursuing an inflated claim or its delay in formulating its claim; there were strong grounds for disallowing a substantial proportion of the defendant s costs relating to the abandoned or unsuccessful elements of its counterclaim; (f) consideration should have been given to whether an issue-based or partial costs order was appropriate; (g) the judge had failed to give appropriate weight to the fact that the claimant could not have made a Part 36 offer because acceptance of it would have entitled the defendant to all of its costs; (h) he failed adequately to consider whether the claimant s Calderbank offer was reasonable; (i) that offer had been a reasonable and proportionate one; (j) the conclusion that the claimant should have accepted the defendant s Part 36 offer was flawed. The court therefore ordered the claimant to pay 50% of the defendant s costs on the standard basis from after the adjudication to the date by which it should have responded to the claimant s Calderbank offer. The defendant was ordered to pay the claimant s costs from that date to judgment. Walker Construction (UK) Ltd v Quayside Homes Ltd and another (2014) EWCA Civ 93 08
Police/Immunity from suit The case of Robinson v Chief Constable of West Yorkshire (2014) EWCA Civ 15 looks at the circumstances in which police officers could be liable for injury caused to an innocent third party, caught up in the arrest of a criminal. It would not be fair, just and reasonable to impose a duty on police officers doing their best to get a drug dealer off the street safely While walking down a busy high street, the claimant/ appellant became caught up in the arrest of a drug dealer. She was knocked to the ground and injured. The judge found that there had been negligence, although not outrageous negligence, on the part of the police officers involved in the arrest, but that the immunity from suit for officers engaged in the apprehension of criminals applied. Accordingly, despite the finding of negligence, the claim was dismissed. The claimant appealed and argued that the judge was wrong in law to apply the three-stage test in Caparo (1990) and that where the case involved direct physical harm, public policy considerations did not arise and there was no need for the court to ask itself whether it was fair, just and reasonable for the action to proceed. Further, that he was wrong in law to apply a blanket immunity and to find that it required outrageous negligence to defeat the principle established in Hill (1989). Dismissing the appeal, the Court of Appeal held that the basic principle was that where there was a wrong there should be a remedy. However, there were cases where it would not be fair, just and reasonable to impose a duty of care and the interests of the public at large could outweigh the interests of the individual allegedly wronged. The Caparo test applied to all claims in the modern law of negligence, and was reflected in all the most recent appellate decisions which addressed in turn, whatever the nature of the harm, the issues of foreseeability, proximity and whether it was just and reasonable to impose a duty. The Hill principle was designed to prevent defensive policing and better protect the public. It would fundamentally undermine that objective to make the police liable for direct acts but not indirect acts, and would encourage the police to avoid positive action for fear of being sued. The general principle was that most claims against the police in negligence for their acts or omissions in the course of investigating and suppressing crime and apprehending offenders would fail the third stage of the Caparo test. It would not be fair, just and reasonable to impose a duty where the courts had concluded that the interests of the public would not be best served by imposing a duty to individuals. However, the Hill principle did not impose a blanket immunity. While there was no definitive list of possible exceptions, there were exceptional cases in which the police did owe a duty of care even when suppressing and investigating crime. In principle, although there was sense in exempting cases of outrageous negligence on the basis no one wished to encourage grossly reckless police operations, such claims would be on the margins. A careful analysis of the case law would provide a sufficient degee of certainty. Accordingly, the Caparo test did apply to the instant case. It would not be fair, just and reasonable to impose a duty on police officers doing their best to get a drug dealer off the street safely. The judge recognised that there were a number of exceptions to the Hill principle and only considered whether outrageous negligence was present because the parties had addressed him on it. He did not find that a finding of outrageous negligence was the only way in which the principle could be defeated. The Hill principle did not apply in general to 09
the law of negligence and to the facts of the instant case. The findings that a duty existed and that there was a breach were unsustainable. Robinson v Chief Constable of West Yorkshire (2014) EWCA Civ 15 Other Publications If you would like to receive any of the below, please email indicating which you would like to receive. Monthly: Legal Watch: Property Risk & Coverage Bi Monthly: Legal Watch: Employment Writes Quarterly: Legal Watch: Counter Fraud Legal Watch: Health & Safety Legal Watch: Marine Legal Watch: Professional Indemnity Legal Watch: Disease Contact Us For more information please contact: Geoff Owen Learning & Development Consultant T: 01908 298 216 E: gro@greenwoods-solicitors.com www.greenwoods-solicitors.co.uk www.plexuslaw.co.uk The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Plexus Law and Greenwoods Solicitors are trading names of Parabis Law LLP, a Limited Liability Partnership incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.