Legal Watch: Personal Injury 1st April 2015 Issue: 058
Limitation Insurers who may be faced with claims for historical sex abuse will gain some comfort from the decision in RE v GE (2015) EWCA Civ 287. The appellant/claimant alleged that the respondent/defendant, her father, had abused her between the ages of 6 and 14. She turned 18 in 1986. Stubbings (1993) decided that claims for injury caused by deliberate assault were subject to a six-year, non-extendable limitation period, meaning that this claimant s claim would be irretrievably statute-barred, limitation having run from her attaining her majority. She claimed that she had not realised until aged 25, around 1993, that she could bring proceedings. She had not done so after realising it would affect the welfare of family members and because she wished to concentrate on her relationship with her boyfriend. She contacted solicitors in 2001 and 2006 but did not proceed with a claim. In 2008, in A v Hoare the House of Lords declined to follow Stubbings and held that the Ss 11 and 30 Limitation Act 1980, permitting extension of the limitation period, applied to claims in respect of intentional injury. The claimant s solicitors wrote to her advising her of that change. She instructed them to pursue a claim. A letter of claim was sent to the defendant in 2009. In 2010 the solicitors approached a consultant psychiatrist to assess the claimant. She did not see the psychiatrist until 2011. His report was produced in January 2012 but it was never disclosed. The claimant saw a second psychiatrist and issued the claim in September 2012. The judge declined to extend the limitation period under S33. The claimant appealed and argued that the judge had (1) applied the wrong test under S33 in asking whether it was fair for the defendant to face a trial; (2) erred in saying that the S33 discretion was only to be exercised in exceptional cases; (3) not considered the balance of prejudice; (4) erred in finding that the reasons for the delay had not been adequately explained. In this issue: Limitation Fraud/settlement of suspicious claim Jackson/Mitchell/Denton Watch this space Events Plexus and Greenwoods hold a series of events which are open to interested clients. See below for those being held in the next few months: The Major Bodily Injury Group (MBIG) Spring Seminar 28.04.15 The Wellcome Collection, London There is a limited number of seats still available for this event, so to avoid disappointment book your place now.
Dismissing the appeal, the Court of Appeal held that the question under S33 was whether it would be equitable to allow the action to proceed notwithstanding the expiry of the primary limitation period. That was to be answered having regard to all the circumstances of the case, including in particular the factors identified in S33(3). Asking whether it was equitable to allow an action to proceed was no different from asking whether it was fair in all the circumstances for the trial to take place, as the judge had. No factor could be given a priori importance; all were potentially important. However, the importance of each factor would vary in intensity from case to case. One relevant factor was the very existence of the limitation which Parliament had decided was usually appropriate. The judge had not misdirected himself. The judge had not misdirected himself in referring to exceptional cases. He had not said any more than that the claimant was asking for the exceptional indulgence of proceeding outside the limitation period. The judge had identified the competing arguments as to whether a fair trial was possible in his consideration of S33(3) (b). He had recognised that the memories of the parties could not be supposed to have dimmed, but also correctly weighed in the balance the loss of some evidence and the less clear position as to the circumstances and memories of subsidiary witnesses. He clearly had considered the balance of prejudice. The judge had been entitled to find that the reasons for the delay were not adequately explained. Although it might have been possible to explain away some of the early period after attainment of the claimant s majority, it was impossible to do so regarding the period after 2008. Over four years passed after the claimant was informed of Hoare. That was itself significantly in excess of the primary limitation period. A very large part of that delay was accounted for by the time taken to obtain the first psychiatrist s report. Although the claimant s solicitors might have pressed harder for an outcome, there was no evidence of any anxiety expressed by the claimant herself as to the progress of her claim. It had plainly been incumbent on both the claimant and her advisers, after 2008, to proceed with despatch when the primary period had expired so long before. By the time the matter was before the judge, the factors in S33(3)(a), S33(3) (e) and S33(3)(f) weighed heavily against the exercise of any discretion in the claimant s favour. A claimant who had failed to meet a limitation period or failed to proceed diligently after expiry of a period could in some cases shelter behind error on the part of advisers, but not always. The delay after 2008 had been egregious and the explanations proffered did not begin to exonerate the claimant from it. the factors in S33(3) (a), S33(3)(e) and S33(3) (f) weighed heavily against the exercise of any discretion in the claimant s favour 02
Fraud/settlement of suspicious claim The case of Hayward v Zurich Insurance Co Plc (2015) EWCA Civ 327 demonstrates the care defendants must take when deciding to settle claims where there is a suspicion of fraud. The appellant/claimant had injured his back during an accident at work. He claimed that his injury continued to cause him serious lumbar pain which restricted his mobility and that his ability to work was seriously impaired. The insurers conducted the defence on behalf of the employer. They relied on video evidence which showed him undertaking heavy work at home, to argue that he had exaggerated the consequences of his injury. The parties reached an agreement, embodied in a Tomlin order, under which the insurers agreed to pay 134,973 in full and final settlement of his claim. About two years later, the claimant s neighbours approached the employers to say that from their observation of his conduct and activities, they believed that the claimant had entirely recovered from his injury at least a year before the settlement was reached. The insurers claimed damages for deceit, asserting that the statements which the claimant had made about the extent of his injury in his particulars of claim and witness statements constituted fraudulent misrepresentation. The settlement agreement was set aside. The claimant was awarded damages of 14,720 and he was ordered to repay the settlement sum, less that amount. The claimant appealed and submitted that belief was a necessary component of a claim based on misrepresentation, whereas the insurers decision to enter into the settlement had been influenced by the fear that the court might believe his misrepresentations rather than by their own belief in them. Allowing the appeal, the Court of Appeal held that the judge had been wrong to set aside the settlement agreement. The contract which the insurers sought to rescind was a contract to compromise a disputed claim. The claim for rescission was based on the very averments of fact which the claimant made in advancing that claim. In such a case, a defendant would not be entitled to seek to have the agreement set aside at some later date only on the basis that he could now show that the claimant s factual statements of the case being advanced were wrong. By entering into the settlement, the defendant implicitly agreed not thereafter to seek to have it set aside In deciding to settle, the defendant took the risk that those statements would not be proved at trial and paid a sum commensurate with his assessment of that risk. It could have taken the case to trial in order to disprove the statements in question, but by settling it agreed to forego that opportunity and could not reserve the right to come back for another attempt. If it were otherwise, no settlement would be final. By entering into the settlement, the defendant implicitly agreed not thereafter to seek to have it set aside on the basis that the statements made in support of the claim were false. However, the position would be different where the claimant s case was not only ill-founded but dishonest. Thus, whilst it might be fair to treat the defendant as having taken the risk of the claimant s statements in support of his claim being wrong, it would not, absent any indication to the contrary, be fair to treat him as having taken the risk of them being dishonest. What risk the defendant was to be treated as having accepted had to depend on the circumstances of the particular case. If it was in any case sufficiently apparent that the defendant intended to settle notwithstanding the 03
possibility that the claim was fraudulently advanced, there was no reason why it should not be held to its agreement even if the fraud subsequently became demonstrable. Applying those principles to the instant case, it was clear that the insurers ought not to be entitled to rely on alleged fraudulent misrepresentations because the statements had been made by the claimant in his statements of case and witness statements and the employers had positively asserted that they were dishonestly advanced before the settlement was reached. Alternatively, it was possible to adopt an analysis based on reliance. The insurers had not been concerned with the truth or otherwise of the claimant s statements as the factor motivating their action. Rather, they were treating them simply as part of his case. It was inherent in the antagonistic relationship of claimant and defendant that a defendant had to form an independent judgment about whether the disputed statements made as part of the claim were likely to be accepted by the court. A relationship of reliance did not arise in that context. The authorities on rescission for misrepresentation were clear that for a misstatement to be the basis of a claim to rescind a contract, the claimant had to have given some credit to its truth and been induced into making the contract by a perception that it was true rather than false. The settlement remained binding. 04
Jackson/Mitchell/Denton As the case of Singh v Thoree [Lawtel 30/03/2015] illustrates, there can be no doubt that the courts are adopting a much more relaxed approach to non-compliance in the post- Denton era. The respondent/claimant had been employed by the appellant/defendant at a solicitors firm from 2002 until 2008 and issued a claim form in 2013 which alleged that the defendant owed him money. A deputy Master extended time to serve a defence to 28 January 2014. Meanwhile, the claimant was granted permission to add a third party as a defendant, namely the solicitors firm which had employed him prior to 2008. The defendant received the amended claim form on 28 January, hours before his defence was to be served and his advisors took the view that that service reset the clock so that he had a further 28 days to serve his defence. The claimant applied for judgment in default of defence on 30 January and it was entered against the defendant on 24 February. Meanwhile, the defendant had served his defence and counterclaim on 14 February. He received notification on 26 February that judgment had been entered and, on the following day, applied for it to be set aside. That application was refused by another deputy Master. The defendant appealed, submitting that (1) the service of the amended particulars of claim had overridden the order extending time to serve a defence; (2) in considering the application to set aside, the deputy Master had not dealt with the merits of his defence under CPR 13.3. advisers had genuinely taken a different view that he had to address the amended claim and that time had begun to run again. They had been mistaken. In the application to set aside, the deputy Master had not mentioned the merits of the defendant s defence in his judgment and it was therefore impossible to find that he had reached a view on that matter. The claimant accepted that the instant court therefore had to make such an assessment. Applications to set aside had to be made promptly and the defendant had... There had been an extraordinary delay in bringing the claim and its value had not been specified. The defendant accepted that money was potentially owed to the claimant, but the amount could not be calculated without a proper account. It was possible that the claim and counterclaim could cancel each other out. The court was satisfied that, on the face of the statements of case, the defendant had a real prospect of successfully defending the claim. Applications to set aside had to be made promptly and the defendant had made his application the day after being notified that judgment in default had been entered. The judgment was therefore set aside. Allowing the appeal, the High Court judge held that the service of the amended particulars of claim had not overridden the first deputy Master s order. Normally where amended particulars were served, provisions were made to amend the timetable either by agreement or by court order. In the instant case the amendment had simply added a party. On the facts, there was no need for the defendant to plead to the amended claim. He had been required to comply with the deputy Master s order, even though his 05
Watch this space Changes to Part 36 effective from 6 April 2015 Although CPR Part 36 has been completely rewritten (rather than amended), in reality there is little by way of fundamental change to the previous version. It remains the case that to be valid a Part 36 offer must: Be in writing Make it clear that it is made pursuant to Part 36. (The old rule required that the offer should state on the face of it that it was intended to have the consequences of Section I of Part 36). Under both versions the effect is the same: that the defendant will pay the claimant s costs if the offer is accepted within the relevant period Specify a relevant period of not less than 21 days Indicate if it is to settle all or part of the claim State whether it takes into account any counterclaim A summary of the more significant changes is: 1. Offers can be time limited i.e. the offer may indicate that if not accepted it is withdrawn on a certain date or on the happening of a certain event. However, the costs protection of the offer is then lost. 2. Where there is a split trial, the new CPR 36.16 allows the judge to be told of the existence, but not the terms, of a Part 36 offer after judgment has been given on the preliminary issues (unless the Part 36 offer relates only to the issues that have been decided, in which case the terms of the offer can also be disclosed). 3. The current rules have given rise to difficulties where a party makes a Part 36 offer for nearly all the relief it is seeking in the action. On the face of the rules, the costs consequences apply where a claimant obtains a judgment that is at least as advantageous as its offer, i.e. it does not need to better its offer. So in theory the costs consequences could apply where a claimant makes an offer to settle for the full amount claimed (or 99%) and then succeeds in full. The new Part 36 seeks to address the perceived difficulty of parties being able to obtain the costs benefits of Part 36 where they have made very high offers. It does this by adding a new factor for the court to take into account in deciding whether it would be unjust to order the Part 36 costs consequences, at 36.17(5): (e) whether the offer was a genuine attempt to settle the proceedings. This would appear also to rule out defendant offers for 5-10% on liability. 4. The new Part 36 states expressly (at CPR 36.2(3)) that a Part 36 offer may be made in respect of a counterclaim or other additional claim. It cross-refers to CPR 20.2 and 20.3 which provide that counterclaims and other additional claims are treated as claims and that references to a claimant or defendant include a party bringing or defending an additional claim. 5. There is a new provision (at CPR 36.9(5)) that where an offeror changes the terms of an offer to make it more advantageous to the offeree, it is treated as a new offer rather than a withdrawal of the original offer. 6. The new 36.14(5) makes clear that where a Part 36 offer is accepted late, the court must make the usual order (i.e. that the accepting party pays the costs for the period of delay) unless it would be unjust to do so. This brings into play a similar test to the court considering whether to depart from the usual costs consequences where a party fails to beat a Part 36 offer at trial. The current wording of Part 36 states that on late acceptance the usual order will apply unless the court orders otherwise, which might be thought to suggest a broader discretion. 7. If a party has failed to file a costs budget in time, under CPR 3.14 it is treated as having filed a budget limited to court fees, so that in effect (and subject to obtaining relief 06
from sanction) its recoverable costs are limited to court fees. Where that is the case, there may be little incentive for the opponent to settle in the face of a Part 36 offer from the party in default, as the costs risk if it fails to beat the offer may be minimal. The new CPR 36.23 addresses this difficulty by providing that, in such circumstances, the defaulting party s recoverable costs for the purposes of Part 36 will be 50% of the costs that would otherwise be recoverable, but will not be limited to court fees. Note however that this provision only applies to the costs from expiry of the relevant period onward. Where it is the claimant that is in default, and the offer is accepted within the relevant period, this new rule does not allow the claimant to avoid the limitation to court fees. Publications If you would like to receive any of the below, please email indicating which you would like to receive. Weekly: Legal Watch: Personal Injury Monthly: Legal Watch: Property Risks & Coverage Quarterly: Legal Watch: Counter Fraud Legal Watch: Health & Safety Legal Watch: Professional Indemnity Legal Watch: Disease Contact Us For more information please contact: Geoff Owen, Learning & Development Consultant T: 01908 298216 E: gro@greenwoods-solicitors.com To unsubscribe from this newsletter please email: crm@greenwoods-solicitors.com www.greenwoods-solicitors.com 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: 12 Dingwall Road, Croydon, CR0 2NA. Parabis Law LLP is authorised and regulated by the SRA.