A weekly news bulletin from Greenwoods Issue 351: 9 May 2013 In this issue - Limitation - Provisional Damages - Costs - From within Greenwoods - A Caged Accident? Seminars - An Audience With... Bristol One Redcliff Street Bristol, BS1 6NP T. 0117 910 0200 London Bedford Square 18 Bedford Square London, WC1B 3JA T. 020 7323 4632 London Market Office 77 Gracechurch Street London, EC3V 0AS T. 020 7220 7818 Manchester 57 Spring Gardens, M2 2BY T. 0161 245 6520 Milton Keynes 2 Eskan Court Campbell Park MK9 4AN T. 01908 298200 Southampton 3600 Parkway Solent Business Park Fareham PO15 7AN T. 01489 882900 www.greenwoods-solicitors.com LIMITATION Collins v Secretary of State for Business and Innovation & Skills and another (2013) EWHC 1117 (QB) is another in a run of cases where defendants have won arguments under the Limitation Act 1980. The claimant was a dockworker between 1947 and 1967 for the predecessors to the first and second defendants. His job involved unloading ships, including asbestos cargo. In 2002 he was diagnosed with terminal lung cancer and told that he only had a few months to live. Hospital records stated that he had "worked with asbestos in Tilbury docks". The claimant s case was that the doctors' questions about his work history did not cause him to make the link between his exposure to asbestos and the cancer. His treatment was more successful than expected and he instructed solicitors in July 2009 after seeing a newspaper advertisement from a firm of solicitors. His solicitors obtained expert reports in October 2009 and April 2010. The claim form was issued on May 22, 2012. The second defendant submitted that the claimant had actual knowledge of the real possibility that his cancer was due to asbestos exposure at the time of his diagnosis in 2002. The claimant argued that he only became aware of the possible link between cancer and asbestos from the newspaper advertisement in 2009. Finding the claim to be statute barred, the High Court judge held that claims for damages for negligence which included damages for personal injury were subject to a limitation of three years from the date on which the cause of action accrued or, if later, the date of knowledge of the person injured. The critical issue in the instant case was when the claimant had or was deemed to have had the necessary knowledge. He did not have actual knowledge of the possible link between his lung cancer and the exposure to asbestos until July 2009 when the advertisement was published. It was understandable that his and his doctors' attention was on his prognosis rather than the cause of the cancer. The medical records were consistent with the issue of his working with asbestos being discussed just once. As the claimant did not have actual knowledge, it was necessary to consider whether he was deemed to have the constructive knowledge under S14(3) Limitation Act 1980. There was an assumption that a person who had suffered a significant injury would be sufficiently curious to seek advice unless there were reasons why a reasonable person in his position would not have done. The claimant had been told that he only had a few months to live. Even the reasonable man in those circumstances would have concentrated on matters other than the cause of his illness. However, once the original shock was over and the claimant had responded so positively to treatment, the position changed. His condition was sufficiently significant that it would have prompted curiosity as to its cause in the mind of a reasonable man. At that time, he would have recalled that the doctors were interested in his work history. The reasonable man could not be expected to know that asbestos could cause lung cancer, but the reasonable man in the claimant's position, and with his knowledge of the history of asbestos handling in the docks, would have known generally that it was hazardous to health. Accordingly, it would have been reasonable to expect him to make further inquiries as to the possible causes of his cancer. Had he done so, asbestos would have been identified as one such possible cause. Allowing for "thinking time" to embark on those inquiries, and a certain amount of response time for the doctors, he would have had the necessary knowledge by the middle of 2003. Personal Injury l Property & Construction l Insurance l Commercial & Financial Risks l Fraud l Health & Safety l Motor Prosecutions
Page 2 of 5 LIMITATION CONT D The claimant's action could still proceed if the court in its discretion decided it would be equitable to exclude the limitation defence. Section 33(3) listed non-exhaustive matters to which the judge had to have regard. The generality of the opening words of S33(3) meant that the court could take account of the totality of difficulty which the defendants would have in defending the claim, including the passage of time. The primary limitation period expired in mid-2006. A further six years passed until the issue of the claim form. The first three years were due to the claimant's lack of actual knowledge. Once he had the necessary knowledge, there was no delay by him in instructing solicitors. Nine months were then taken to obtain necessary reports but there was no explanation for the remainder of the delay. The additional delay caused further prejudice to the defendants, even against the background of a lengthy lapse of time before the primary limitation period expired. The court also took account of the following factors: (a) the events occurred 46 to 66 years ago; (b) the claim had significant weaknesses; (c) the claimant's memory was imprecise on many matters and he was not assisted much by contemporary records; (d) he had the burden of proving his case; (e) his claim did not have a good chance of success; (f) there was a disproportion between the likely recoverable loss and the litigation costs. Accordingly, for all of those reasons, the court declined to exercise its discretion to extend time and the claimant's action was dismissed. PROVISIONAL DAMAGES Cases under this heading are rare but in Ministry of Defence v Blythe [Lawtel 07/05/2013] the Ministry of Defence appealed against a decision to extend a 20-year time limit in which the respondent claimant was entitled to claim future damages. A consent order had been approved in 1990 which entitled the claimant to provisional damages for an asbestos-induced injury. Paragraph 2 of the consent order provided that the claimant could apply for further damages within 20 years if he developed any of the asbestos-related-diseases specified in paragraph 1 of the order. The claimant applied for an extension of time outside of the 20-year time limit but had not developed any of the specified diseases. The judge granted the extension finding that the period of 20 years was an entirely conventional case management decision when it was made, as under RSC Order 37. 8(3) such an application had to be made within a specified time limit. However, that was not replicated in CPR 41.3. He also found that if he did not exercise his discretion then the claimant would have no remedy if he was subsequently to suffer from one of the specified diseases. The appellant argued that (1) there were no proper grounds on which to vary the consent order, which should be treated as a contract that the court should not interfere with; (2) even if the judge had been entitled to vary the order, it had been over two years since the 20- year period had elapsed, and so fell outside the generous ambit of his discretion. In dismissing the appeal, the deputy High Court judge held that: (1) The judge was entitled to find as he did. The only evidence of a contract was the order. Paragraph 1 of the order was the substantive contract and did not mention time limits. It envisaged an application to extend not limited by time, to which the Ministry of Defence had consented. Paragraph 2 dealt with case management and simply gave effect to the old RSC rules. RSC Order 37.8(3) which had limited the action no longer applied following the introduction of CPR PD51 and CPR 41.3. It was never the intention of the parties to impose a 20-year time limit; the time limit was a reflection of the rules in place at the time. (2) The judge's finding that a failure to grant an extension of time would deprive the claimant of a remedy was not wrong or perverse and he was entitled to exercise his discretion. COSTS The case of Heron v TNT (UK) Ltd and another (2013) EWCA Civ 469 is another example of a defendant seeking a costs order against a claimant s solicitor. The respondent solicitor's client, the claimant, had brought a personal injury claim against the appellant defendant. He had entered into a conditional fee agreement ( CFA ) with the solicitor. The solicitor did not take out after the event ( ATE ) insurance for the claim; and confirmed the absence of insurance to the defendant, after it had inquired. The defendant made Part 36 offers which the claimant rejected. The claimant, on advice from the solicitors and counsel, made offers which the defendant rejected. Shortly before trial, the solicitors advised the claimant that they would be unable to represent him at trial or instruct counsel unless it had monies on account to cover disbursements. An expert subsequently advised that much of the injury the claimant had sustained in his accident would have occurred in any event. The claimant, representing himself at trial, was awarded far less in damages than had been available in the Part 36 offers. He was ordered to pay the defendant's costs. The defendant applied for a non-party costs order against the solicitors under S51 Senior Courts Act 1981, alleging that their failure to obtain ATE insurance had meant that there was an undeclared conflict of interest between them and their client which had motivated the solicitors to continue with the case to ensure that the claimant would not have a liability for the solicitor s costs. The
COSTS CON D judge found that the allegation that the solicitors had been aware of a conflict of interest had not been made out, and that there was no evidence to suggest conscious impropriety on their part. Dismissing the defendant s appeal, the Court of Appeal held that the judge had not rejected the allegation that there had been a conflict of interest. Had he reached that conclusion, he would have said so in terms. He had rejected the claim of conscious impropriety and it was not difficult to see why. If the solicitors had had their eye on the ball when the defendant had asked about ATE, the position could have been rectified; an equally plausible inference was that they had mistakenly believed that there was some reason why ATE insurance had not been sought or obtained and failed to challenge that assumption. Although the court rejected the defendant's submission that it would be wrong ever to make a finding of conscious impropriety when the relevant solicitor had not given evidence, the judge's rejection of the claim of conscious impropriety had been open to him on the evidence. On the facts as found by the judge, the defendant's application had to be put on the basis that the solicitor's failure to obtain ATE insurance, and the subsequent failure to admit that to the claimant, was itself sufficient not only to give rise to a breach of duty to him, but also to demonstrate that the solicitors had become a "real party" to the litigation. If that was so, every act of negligence by a solicitor in the conduct of litigation which meant that an opposing party incurred costs which might not otherwise have been incurred would be sufficient for a non-party costs order. The law did not go that far. A solicitor was entitled to act on a CFA for an impecunious client who he knew or suspected would not be able to pay costs if unsuccessful. As far as the other side was concerned, whether the solicitor had negligently failed to obtain ATE insurance did not impact on the costs they would incur unless it was demonstrably provable that the costs would not have been incurred. That was not the instant case. A professional negligence claim brought by the claimant was the appropriate forum to determine the extent to which the solicitors were liable to compensate him for any costs he would have to pay the defendant. The summary procedure for a non-party costs order was not. The second case under this heading shows arrangements will be with us for some time. In Jones and others v Secretary of State for Energy and Climate Change (2013) EWHC 1023 (QB) each of the conditional fee agreements entered into by the lead claimants contained a provision that the claimant was liable for the payment of any disbursements incurred on his behalf, whether or not the claim was successful. The disbursements, which consisted mainly of payments for experts' and counsel's fees, amounted in total to more than 787,500. The disbursements were paid by the claimants solicitors pursuant to an arrangement which was somewhat novel. The solicitors entered into a "credit agreement" with each of the lead claimants whereby the solicitors undertook to provide credit in such sums as were required from time to time to pay disbursements relating to that claimant's claim up to a maximum of 5,000 in return for payment of a credit charge. The charge for credit was agreed at 4 per cent above base rate. The credit agreement provided that, if the claim was successful, the credit charge would be paid by the claimant out of his damages, while, if the claim was unsuccessful, the credit would be paid under the terms of the claimant's policy with his ATE insurance provider. Allowing the claimants applications that the defendants should pay should pay prejudgment interest on disbursements incurred the High Court judge held that determination of the rate of interest payable on disbursements was a matter for the exercise of the court's discretion, having regard to all the circumstances of the case and in particular the requirement to do justice as between the parties. The starting point was the fact that it was essential, if the claims were to proceed, that the necessary disbursements should be paid as the case went along. It was quite clear that the claimants would not have been in a position to fund the disbursements from their Page 3 of 5 own pockets. The credit agreements provided a means by which they could obtain funding for their disbursements without being required to advance any monies themselves and without financial risk, as the agreements provided that, in the event of a claim failing, the disbursements would be paid by the ATE insurers. It was likely that the interest demanded by a third party for an unsecured loan in order to fund disbursements would have been significantly in excess of the 4 per cent above base rate agreed with the solicitors. Further, such loans would not have been contingent, as were the credit agreements. The court had no information about the likely terms of a disbursement funding agreement with a third party but it seemed highly unlikely to have been as advantageous to the claimants as the credit agreements with their solicitors. The rate of interest agreed between the parties could not of itself be determinative of the rate which should be awarded; the credit charges specified in the credit agreements provide only prima facie evidence of the cost to the claimants of obtaining the credit necessary to fund their disbursements, and that prima facie evidence would plainly be displaced by evidence that the charges were excessive. No direct evidence had been given about the likely cost to the claimants of funding their disbursements by alternative means. There could be no doubt, however, that the cost of unsecured borrowing to a private individual would be considerably higher than would be paid by a large company litigating in the Commercial Court. The defendants had not argued that the claimants would have been able to obtain the necessary funding at a more advantageous rate of interest than 4 per cent above base rate, let alone on a contingency basis. Nor had they argued that the rate of interest charged by the solicitors was excessive or unreasonable. The solicitors had fulfilled the role of a bank but on terms more advantageous to their clients than those which would have been offered by any bank. In the circumstances, the appropriate rate of interest on pre-judgment disbursements was 4 per cent above base rate.
Page 4 of 5 FROM WITHIN GREENWOODS A CAGED ACCIDENT? Trivonovs v Qasim (1) and Quinn Direct Insurance (2) A claim for personal injury made by a Lithuanian cage fighter, who was involved in a professional fight within weeks of the alleged accident, has been dismissed in the Bow County Court. The claimant had alleged that, as he drove home in the early hours from meeting a potential client for security work, the defendant s passenger opened a door into the path of the claimant s car. The claimant claimed that he suffered from whiplash as a result of the accident. He told a doctor that he could not work properly for nearly two months, and he was in pain for three months. The claimant did not tell the doctor about his cage fights. Our client did not believe that an accident had happened at all. At trial, the court heard that the damage to the claimant s car was seven inches too high to have been caused by a vehicle like the defendant s car. The claimant gave conflicting accounts of his injuries, what he could and could not do after the accident, and who he had told about the pain. The judge pointed out that, as a former police officer, the claimant could be expected to have ensured the accuracy of the information he was presenting. Under cross examination, the claimant claimed to be unable to lift his young children; but was played a DVD of him lifting his heavyweight opponent, less than a fortnight after the accident was supposed to have taken place. The judge concluded that the accident had been staged or contrived to bring a claim for compensation to which the claimant was not entitled. His claim was dismissed with costs. EVENTS Greenwoods hold a series of training events which are open to interested clients. Below are those events being held in the next few months. If you would like to attend any of the following events please email crm@greenwoods-solicitors.com, indicating which you are interested in attending. An audience with... A chance to put questions to an expert Dr Paul Lewis, a Consultant Neuro-pathologist. Dr Lewis has been involved in neurology since 1961. He has worked within morbid anatomy, histopathology and neurology in both the provate and NHS sectors. He specialises in brain/nerve injury, brain tumours and multiple sclerosis. Dr Lewis undertakes post graduate teaching at Royal Free Hospital and Undergraduate teaching in pathology, neurology and medical ethics at Imperial College London. Date Time Location 16 May 2013 18.00 Greenwoods Solicitors Dr Paul Lewis (Neuro-pathologist) 77 Gracechurch Street London, EC3V 0AS Other Greenwoods publications Greenwoods produces a number of regular publications on various topics, namely: PROPERTY, CONSTRUCTION & INSURANCE REVIEW (Monthly) FRAUD REVIEW (Bi-monthly) MOTOR CRIME FOCUS (Quarterly) H & S REVIEW (Quarterly) MARINE INSURANCE REVIEW (Quarterly) If you would like to subscribe to any of the above publications, please email crm@greenwoods-solicitors.com, indicating which you would like to receive.
Page 5 of 5 Further information For further information on any of the issues dealt with in this Alert, other than where a contact has been provided, please contact Geoff Owen on T. 01908 298216 or E. gro@greenwoods-solicitors.com To subscribe or unsubscribe from this Alert, please email crm@greenwoods-solicitors.com 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. Greenwoods is a firm of solicitors regulated by the Solicitors Regulation Authority in England and Wales. You can access the rules which regulate our professional conduct at: www.rules.sra.org.uk Greenwoods Solicitors 2013