piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Shooting Admiral Byng

Admiral Byng was held responsible for the loss of Minorca in 1756. He was relieved of his command, court martialled and shot by a firing squad. Voltaire remarked of the decision to shoot him that it was beneficial to kill an Admiral from time to time “pour encourager les autres”. Although Hildyard J. made reference to Admiral Byng in his judgment in the case of Caliendo v Mishcon de Reya [2014] EWHC 3414 he was not prepared metaphorically to shoot the Claimant’s solicitors, DLA Piper LLP, to encourage the rest of us. DLA were 3 ½ months late in serving notice on the defendant of the existence of a CFA and an ATE policy in a professional negligence claim. They made an application for relief from sanctions at the time of service of proceedings and admitted that they had no good reason for their failure. The judge accepted the serious effect of the ATE/CFA funding arrangements but considered that what mattered for the first limb of the Denton test was the seriousness and significance of late notification. He held that the defendant had not been able to show ‘material prejudice’. This seems a slightly different test from whether or not the breach was ‘serious and significant’ - a failure to pay court fees was given as an example in Denton of a breach which is serious and significant but it cannot be said to cause ‘material prejudice’ to the other party. The judge’s application of the third limb of the Denton test (evaluation all the circumstances of the case so as to deal justly with the case) was also interesting. When dealing with the impact on other court users, the judge was keen to emphasise that he was not aware of any specific detriment to court users such as in Mitchell where the adjournment of the cost budget hearing caused an adjournment and the vacating of an asbestosis claim. It is submitted that the test of the impact on other court users has always been difficult – on the one hand information of a specific detriment is rarely likely to be available outside, perhaps, the masters’ corridor in the RCJ whereas, on the other hand, without such specific detriment the courts and parties will often be merely speculating. The judge did not consider it would be just to withhold relief from sanction. Whereas Denton undoubtedly softened the Mitchell regime, judgments such as this are taking us still closer to the former relief from sanctions test which focused on the requirements of justice - too late to save some of the Admiral Byngs of the past year.

Changes to PD 21 of the CPR from 1 October 2014

From 1 October 2014 there will be two important changes to the Practice Direction to Part 21 of the CPR which will affect the preparation and conduct of settlement approval hearings.   In cases where the approval is sought of a settlement or compromise by or on behalf of a child or protected party before proceedings have been issued, a claimant child or protected party in a personal injury case arising from an accident is now obliged to file with the claim for the approval of a settlement, “medical and quantum reports and joint statements material to the opinion [of counsel or a solicitor as to quantum, except in very clear cases] required by paragraph 5.2”. This change ensures that the medical evidence filed is that which is pertinent to the Opinion on quantum.   In cases where the approval is sought of a settlement or compromise by or on behalf of a child or protected party after proceedings have been issued, the prescribed opinion as to quantum of counsel or a solicitor must now crucially also include “documentary evidence material to the [said] opinion” (per new Para 6.4(3)). This change has the potential to affect the Court’s ability to approve the settlement or compromise of a claim reached unexpectedly at trial for example – i.e. in circumstances where the same was not anticipated. Should therefore such agreement be reached, it may be that it is unlikely a court would approve the same unless all medical reports, schedules of loss, and potentially lay evidence as to the child’s or protected party’s medical condition was available to be placed before the court.   Full details of all upcoming changes can be found at: https://www.justice.gov.uk/courts/procedure-rules/civil/pdf/update/75th-update-pd-making-document.pdf

A Judgment for What? The Effect of Default Judgments

Where a defendant admits breach of duty but wishes to contest causation, injury and quantum, it has in the past been common practice for it to allow judgment to be entered in default of Acknowledgment of Service or of Defence and to proceed to contest the remaining issues at an assessment of damages hearing.  An alternative course of action, which in the short term is more expensive, is to file a Defence making appropriate admissions and then for the claimant to seek entry of a judgment for damages to be assessed. In Symes v St George’s Healthcare NHS Trust [2014] EWHC 2505 (QB), the claimant was referred to hospital in October 2008 by his GP with a lump on his face which turned out to be a malignant tumour.  In January 2009, a consultant decided that he should have an urgent superficial parotidectomy, but that was not carried out prior to May 2009, when it was found that the tumour had invaded the facial nerve and there had been metastasis to the lungs, leading to the need for a total parotidectomy and the loss of the left facial nerve and inoperable lung cancer.  In 2011, an open admission was made that there had been a breach of duty in failing to identify that the lump was suspicious of malignancy and in the delay in operating, but the defendant’s solicitors made it clear that its view was that the invasion of the facial nerve and the metastasis to the lungs were not attributable to either breach of duty. Proceedings were initially struck out for non-service, but on re-issue, the claimant pleaded his causation case in detail in the Particulars of Claim.  The defendant did not enter an Acknowledgment of Service or a Defence.  Master Roberts entered judgment in default of Acknowledgment of Service and set a date for a directions hearing.  The parties agreed the terms of an order before the hearing and the Master ordered that the parties would have permission to rely on expert evidence on “quantum, condition and prognosis” from experts in oncology and care.  The defendant continued to reiterate in discussions between solicitors that the claimant’s case on quantum was in dispute, save that it was accepted that there was a liability to pay damages for pain and suffering during the delay in treatment.  However, it was not until the claimant sought an interim payment of £50,000 that his advisers expressly asserted that the default judgment precluded the defendant from contesting the pleaded allegations of causation.  Whether or not the claimant was entitled to that interim payment depended largely on whether the claimant was correct as to the effect of the default judgment. At first instance, in a judgment given on March 21st 2014, the Master upheld the claimant’s contention.  He ruled that the Particulars of Claim stood as a template for the default judgment and that the defendant accordingly could not contest causation.  He castigated the defendant for having acted in a manner contrary to the overriding objective and having failed to comply with the obligation in CPR 16.5 to respond properly to the Particulars of Claim by serving a Defence. On appeal, Simon Picken QC, sitting as a Deputy High Court Judge, allowed the appeal.  In his judgment, the deputy judge reviewed the case law in some detail.  In particular, he closely examined the leading case on the subject, Lunnun v Singh [1999] CPLR 587, which had followed an earlier decision of the Court of Appeal refusing permission to appeal in Turner v Toleman [1999] unreported, January 15th.  The judge held at [62]-[63] that he was bound by the decision of the Court of Appeal in Lunnun to conclude that the default judgment established no more than that the defendant was in breach of duty and that the breach had caused some damage.  There was no special rule applicable to clinical negligence cases: at [64].  Lunnun remained good law following the introduction of the CPR: at [65].  He also said that as a matter of principle that since the defendant admitted part of the claimant’s pleaded case on causation (that the delay in treatment led to pain and suffering) there was no basis to construe the default judgment as extending to the other consequences which were said to follow from the breaches of duty: at [66]-[68]. The deputy judge then went on to consider whether the defendant had acted contrary to the CPR.  The rules did not state that the effect of a default judgment for damages to be assessed precluded a claimant from contesting a pleaded case as to causation: at [83].  It followed from the decision as to the effect of the default judgment that the defendant had been entitled not to serve a Defence and so there was no breach of CPR 16.5: at [84]-[85].  Accordingly, while it “would have been more sensible” for the defendant to serve a Defence, it was not in breach of the rules for failing to do so: at [86]-[87].  Nor was the defendant in breach of the overriding objective, since it had made its position clear in correspondence to the claimant’s advisers, if not to the court: at [89]-[91].  The claimant’s advisers accepted that they had known that the defendant’s solicitors were under what they regarded as a misapprehension.  In those circumstances, both parties should have brought the misunderstanding before the court at an earlier stage: at [92].  In Parkhouse v North Devon Healthcare NHS Foundation Trust, at a hearing on May 6th 2014, this course had been taken where default judgment had been entered but at a directions hearing, the defendant had made it clear that causation was in dispute.  Master Roberts himself denied that there was any need for the directions order to make clear that it was open to the defendant to contest causation, although in the event a recital was inserted to that effect. The extent to which, in clinical negligence cases, the practice of allowing default judgment to be entered in this way is followed is not clear.  Anecdotally, it appears that both courses of action are utilised by defendant’s solicitors.  Even though the practice has been legitimised (subject to any further appeal to the Court of Appeal) by the decision in Symes, nevertheless the modest cost savings in not serving a Defence in a case where there is a clearly pleaded case in causation are surely outweighed by the need to ensure that both parties are absolutely clear about the extent to which the critical issue of causation is being contested.

Exit Mitchell enter Denton

Our jurisdiction generally does not favour laws (whether judge- or parliament-made) which fail to take account of what is just in the individual circumstances of the particular case. The common law prides itself in being able to adapt to new situations to yield what we would generally understand to be the ‘right’ result. This is a priority of our legal system and Mitchell fell foul of it – whether because it overstepped the mark in the first place or whether because it was wrongly interpreted. It is a strength of our system that it has been able to correct itself within such a short space of time. Exit Mitchell and enter Denton (or perhaps it will become known as ‘Decadent’). The Court of Appeal explains that when approaching rule 3.9 the first stage is to identify and assess the seriousness and significance of the ‘failure to comply with any rule, practice direction or court order’. If the breach is neither significant nor serious then there is no need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate ‘all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]’. The assessment of ‘seriousness and significance’ is substituted for the ‘triviality’ test. The Law Society had contended for a test of ‘immateriality’. The Court of Appeal was content with this as long as it involved not just a question of whether trial dates were affected but also the effect on litigation generally. Because this test did not take account of breaches which were serious but did not affect the efficient progress of the litigation, the Court preferred to stick to whether or not the breach was ‘serious or significant’. At this stage unrelated past failures should not be taken into account. The second stage is to consider why the default occurred. The examples in Mitchell are to be considered as no more than examples. When it comes to the third stage, if there is a serious or significant breach and there is no good reason for it the application will not automatically fail but the court will consider ‘all the circumstances of the case, so as to enable it to deal justly with the application’. The Court of Appeal rowed back from the epithet ‘paramount importance’ which had been attached to the only two factors expressly referred to in rule 3.9. They are now of ‘particular importance’ and should be given particular weight when all the circumstances of the case are considered. The Court of Appeal is on a tight rope. Its aim is evidently to avoid relaxation which 'will inevitably lead to the court[s] slipping back to the old culture of non-compliance which the Jackson reforms were designed to eliminate.' Equally it wants to put an end to the plethora of decisions which have come from some judges which are 'manifestly unjust and disproportionate'. Whether Denton will achieve that remains to be seen.

Allocation and admissions

Where a defendant admits a part of a claim, how does the admission affect the allocation of the claim? This was the question considered in Akhtar v Boland [2014] EWCA Civ 872. The defendant filed a Defence admitting hire, recovery and storage charges in the sum of £2,496. The claimant’s claim was pleaded at more than £5,000 but less than £10,000. However, if the sum of £2,496 was subtracted from the pleaded claim, it fell below £5,000 and therefore was below the then current limit for the fast track. Following Allocation Questionnaires the district judge allocated the claim to the Small Claims Track. The claimant applied to have the claim reallocated to the Fast Track but the judge refused the application but entered judgment against the defendant for £2,496. The Court of Appeal held that the sum of £2,496 fell into the category of ‘any amount not in dispute’ which was to be disregarded pursuant to part 26.8(2)(a) when allocating the claim to a track. An admission is binding and the Court has no jurisdiction to investigate facts which have been admitted unless permission has been granted for the admission to be withdrawn. That principle applied even more strongly to a judgment: neither party may make submissions or adduce evidence whichwould lead to decisions or findings inconsistent with a judgment. The Court of Appeal also made it clear that where there was judgment for a part of a claim the claimant’s cause of action was not extinguished: the claimant was entitled to pursue and seek judgment for the balance. Tactically defendants may want to make admissions which will bring the value of the claim into the Small Claims Track. However they will need to be careful of the costs consequences of so doing as part 44.15(3)(iv) says the court may allow the claimant costs of the proceedings to the date of the admission of part of the claim. To avoid such costs consequences it would be prudent to make such an admission during the pre-action protocol period.

Rescued from an error of procedure

Rule 3.10 rescues parties where “there has been an error of procedure such as a failure to comply with a rule or practice direction”. Where it applies “the error does not invalidate any step taken in the proceedings unless the court so orders”. The question therefore is when an error is merely an error of procedure and when it is such an error that it is irremediable. In Isaac Stoute v LTA Operations Ltd [2014] EWCA Civ 657 the Court of Appeal looked at this question in the context of failed service. Is service of the claim form by the court in disregard of a claimant’s notification that he wished to effect service himself (1) a nullity and (2) ‘an error of procedure’ within r. 3.10? The problem in this case was that the claimant had notified the Court that his solicitors wished to serve the claim form. Rule 6.4(1) states that the Court will serve the claim form except where the claimant notifies the Court he wishes to serve it. It was argued that service by the Court must therefore have been a nullity which rule 3.10 could not rescue. The Court of Appeal found that service by the court (in error) was not a nullity and was an error of procedure within r.3.10. Underhill L.J. held that there was nothing contrary to the fundamental scheme of the Rules, or radically unfair to the parties, in allowing service to stand. The Court had wrongly effected service – but Court service itself was provided for by the rules. There was no prejudice to the defendant who would not have even known that service was irregular when it was effected. It was objected by the defendant that rule 7.6 applied (making provision for extending time for service of the claim form) and that rule 3.10 was just a way of getting round this. The Court of Appeal found that rule 7.6 applied to cases where service had not been effected within the period allowed by rule 7.5. Rule 3.10 could be relied upon to establish that service had been effected, albeit by the wrong person. I blogged recently on service and rule 3.10 (‘Rule 3.10: looking beyond 3.9 for relief’, 21st March 2014). My posting concerned the case of Integral Petroleum v SCU-Finanz AG [2014] EWHC 702 (Comm). That case involved rule 3.10 and the time for serving Particulars of Claim. The judge in that case considered that the rule was to be construed as of wide effect so as to be available to be used beneficially wherever the defect has had no prejudicial effect on the other party.” However he thought that a narrower approach to r. 3.10 should be taken when dealing with the originating process. The decision in the case of Stoute suggests that the approach is not narrower than the approach the judge took to the Particulars of Claim in Integral Petroleum. One issue which arises frequently in cases at the moment is whether an application for relief from sanctions to be made where there has been a breach of a court order, rule or practice direction but there is no automatic sanction prescribed. Rule 3.10 may often be the answer.

Jackson on Jackson

“It was no part of my recommendations that parties should refrain from agreeing reasonable extensions of time, which neither imperil hearing dates nor otherwise disrupt the proceedings” said Jackson L.J. in Hallam Estates Limited v Teresa Baker [2014] EWCA Civ 661. In Hallam the claimants (paying parties) asked for an extension of time for filing their points of dispute in proceedings for detailed assessment of costs. The defendant had been late in filing her bill of costs. Jackson L.J. held that they had given sensible reasons for asking for the extension and, given her own delay, the defendant could hardly object to a modest extension. Pursuant to r. 3.8(3) the court’s approval was required for such an extension but this should have been no more than a formality. In fact the judge approved it on paper without a hearing and this approach was endorsed by the Court of Appeal. Rule 3.8 is about to be amended to allow parties to agree extensions of time for up to 28 days as long as no hearing dates are imperilled. The parties have a duty to further the overriding objective (which includes allotting an appropriate share of the court’s resources to cases) and thus, according to the great man himself, agreeing reasonable extensions which don’t imperil dates or disrupt the course of litigation is not a breach of a legal representative’s duty to their client. Jackson L.J. made it clear that if an application was made for an extension of time before the expiry of the time permitted by a rule or practice direction the application remained an application for an extension of time even if time expired before the application was heard. He said that the principles governing relief from sanctions were not applicable in these circumstances. As was said in Mitchell itself, it is clearly better to make an application for an extension in advance if a deadline is likely not to be kept. Greater clarity has now been brought to the extent to which parties can agree extensions of time. A number of cases have now emphasised the need to identify whether a court sanction has actually been imposed by breach of a court order, rule or practice direction – not all breaches automatically result in a sanction and therefore it is doubtful that relief from sanctions is required in such circumstances.                

CPR change - permission for extensions of time to be agreed

The Civil Procedure Rules Committee will approve a new ‘buffer’ measure at its next meeting, in a few weeks’ time (see www.lawgazette.co.uk/practice/buffer-rule-to-relieve-mitchell-pressure-on-courts/5040518.article).  The rule will permit parties to agree time extensions of up to 28 days for serving certain documents, without needing to make an application to the court. It will apply to all civil cases.  The new measure is designed to alleviate the pressure being felt by courts overburdened by post-Mitchell applications. The courts' difficulties have become increasingly evident. Many readers of piBlawg will have received orders after the time limit for compliance has expired.      

Rule 3.10: looking beyond 3.9 for relief

The dreaded realisation that you have not complied with a rule or practice direction. Your life flashes past you and a cold sweat breaks out. Out comes rule 3.9 and the new criteria, Mitchell, a call to the insurers… Or perhaps r. 3.10 applies? “Where there has been an error of procedure such as a failure to comply with a rule or practice direction- (a) The error does not invalidate any step taken in proceedings unless the court so orders…” There are some nuggets to be found in the recent case of Integral Petroleum v SCU-Finanz AG [2014] EWHC 702 (Comm) in which the scope of r.3.10 was explored by Popplewell J. In Integral the parties agreed an extension of time by e-mail for the service of the Particulars of Claim by 28 days to 6th June (in fact 28 days would have given until 10th June). The Particulars were served by e-mail at 18.41 on 10th June meaning they were deemed served out of time. SCU challenged validity of service on the grounds that e-mail was not a permitted method of serving and, in any event, service was late. No Defence was filed and Integral obtained judgment in default. Under r.6.20 e-mail may only be used to serve documents other than the claim form where a party has indicated that he or she is willing to be served by e-mail. SCU had not given such an indication. The judge found that the error of procedure in serving the Particulars of Claim by e-mail was a failure to comply with a rule or practice direction which fell within r. 3.10. Accordingly under r. 3.10(a) such service was a step which was to be treated as valid: He considered that the rule was to be construed as of wide effect so as to be available to be used beneficially wherever the defect has had no prejudicial effect on the other party. The method of service was recognised but the formalities necessary to make it a permitted method had not been concluded.  He drew a distinction between service of the originating process and service of Particulars of Claim and thought a narrower approach to r. 3.10 should be taken when dealing with the originating process. r. 3.10 was particularly apposite for treating as valid a step whose whole function was to bring a document to the attention of the opposing party where such function has been fulfilled - he said “It prevents a triumph of form over substance”. The judge also found that the rule applied in relation to service of the Particulars of Claim 5 days out of time. The upshot of all of this was that Integral could not set aside judgment as of right but the judge did set it aside under r. 13.3. Rule 3.10 is one to bear in mind when you next find yourself having a scrape with deadlines, procedural formalities etc. In the light of Mitchell the caselaw on this rule is likely to expand greatly.

What's trivial?

    There are an increasing number of reported cases about breaches that can be characterised as “trivial” and thus meriting relief from sanctions without the need to show a “good reason”, providing the application was made promptly. One example is Adlington – referred to in a blog posting on 10th February.   Hamblen J considered this issue very recently in Lakatamia Shipping Co Ltd v Nobu Su and others [2014] EWHC 275 (Comm). The Defendant was required by an Unless order to serve a disclosure list on 17th January 2014. The order did not specify the time for compliance, but the default date provided by the Commercial Court Guide was 4:30pm. The Defendant mistakenly thought it had until 5pm to serve the list. At 4:45pm – 15 minutes late – the Defendant sought to exchange lists with the Claimant. The Claimant replied that the Defendant was out of time. The Defendant proceeded to serve its list unilaterally at 5:16 – 46 minutes late. The Defendant made a prompt application for relief from sanctions. This was opposed. The judge noted that the delay was measured in minutes rather than hours and considered it was a “no more than insignificant failure to comply” and could be characterised as “narrowly missing a deadline” – examples of trivial breaches given by the Court of Appeal in Mitchell. The judge also addressed the consequences of the breach – these were minimal. There was no prejudice. This re-enforced the conclusion the breach was trivial. The Claimant sought to rely on a history of non-compliance to say that this, further, breach, should not be treated as trivial. The judge disagreed, holding “what matters is whether the non-compliance which resulted in the sanction is trivial and… that involves a consideration of the default in question, not other defaults at other times”. The history of default “did not affect the characterisation of the relevant non-compliance or metamorphose a trivial default into a serious default”. Given that the Court of Appeal held that relief will “ordinarily” be granted for trivial breaches on a prompt application, Hamblen J held that “compelling circumstances” were likely to be required to prevent the Court granting relief for a trivial breach. The judge examined the factors set out in the old “checklist” and considered these mainly pointed towards granting relief. The judge noted that other court users were not affected by the breach and that there was no prejudice to the Claimant. The history of default was a factor against granting relief, but was not sufficient to prevent relief being granted. Does this mean that relief for trivial breaches, notwithstanding a substantial history of default, may be granted more readily following Mitchell than before? The answer must be no. If the history of default is so bad that relief would not have been granted even before the CPR changes, then (it seems to this author) this should constitute “compelling circumstances” preventing a Court from exercising its discretion in the post-Mitchell legal universe.