piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Caselaw since 1st April 2013 - leopards and spots?

  The case of Venulum Property Investments Ltd v Space Architecture Limited [2013] EWHC 1242 (TCC) concerned a relief from sanctions application under r. 3.9. The decision was in fact made under the old rules because the application was made prior to 1st April 2013 but the judge (Edwards-Stuart J) took the new regime into account concluding: “In my judgment, when the circumstances are considered as a whole, particularly in the light of the stricter approach that must now be taken by the courts towards those who fail to comply with rules following the new changes to the CPR, this is a case where the court should refuse permission to extend time. The Claimant has taken quite long enough to bring these proceedings and enough is now enough. I therefore refuse this application”. The claimant’s application was for an extension of time for serving the Particulars of Claim. The Claim Form had been issued on 12th November 2012 but served on the very last day for service (12th March 2013). The Particulars of Claim were wrongly served 14 days later – the Claimant’s solicitors forgetting that the long stop deadline for service is four months after the issue of the Claim Form. In the judgment there was a predictable citation in the judgment from Fred Perry v Brands Plaza Trading [2012] EWCA Civ 224 (Lewison LJ): “… courts at all levels have become too tolerant of delays and non-compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting on the civil justice system. The balance therefore needs to be redressed.” There were also predictable citations from Hashtroodi v Hancock [2004] 1 W.L.R. 3206 on courting disaster by leaving issue until expiry of the limitation period and failure to serve (due to incompetence on the part of solicitors) being a powerful reason not to grant and extension of time. The judge looked at all the circumstances and refused relief due to the weakness of the Claimant’s case, poor pleading and a lengthy and unexplained delay of 5 years before instructing solicitors. The tough new regime undoubtedly helped the defendant but one is left with a doubt as to whether the outcome would have been any different pre Jackson. (Image courtesy of freefoto.com - Photographer: Kristin de Moore)    

New CPR 3.9 - Ending the "culture of toleration of delay and non-compliance with court orders" and a "different justice"?

Tomorrow as the last working day before April, shall mark the end of an era. Not a particularly long era. But all of fourteen years of the Civil Procedure Rules as we have known them. From the 1st April 2013, the CPR will be significantly altered for every civil litigant. Most pertinently, the Overriding Objective will now include specific reference to undertaking litigation at proportionate cost, and ensuring compliance with (interlocutory) orders of the court. In the latter vein, CPR 3.9 “Relief from Sanctions” is being entirely reformed. Gone will be the checklist, oft-treated as a checklist by judges, to be replaced by a much broader discretion as to whether to grant relief, with the judge specifically referred to the need for litigation to be conducted efficiently and at proportionate cost, and to enforce compliance with rules, practice directions and orders.  Lord Dyson, the Master of the Rolls in a speech last week to District Judges at their annual seminar reminded us that the change to CPR 3.9 in reflecting the new Overriding Objective was to simplify the rule for when relief from sanctions should be granted. The removal of the checklist was something, he argued, would improve the clarity of decision making and decrease the scope of ‘satellite litigation’ – presumably referring to appeals for failing to consider appropriately all aspects of the former checklist. Lord Dyson argued that when considering applications for relief, for too long the courts have (albeit understandingly) erred on allowing the principle of individual justice to trump any real consideration of the effect that this may have on the system of justice or upon other court users. He quotes Lord Justice Jackson in Mannion v Ginty [2012] EWCA Civ 1667 at [18] as referring to “a culture of toleration of delay and non-compliance with court orders” in the civil justice system. It is suggested that the changes to CPR 3.9 will end this culture (which the CPR itself was designed to curtail). The Master of the Rolls suggests that the more robust future attitude to rule-compliance and relief from sanction, is intended to ensure justice is done. However, the new CPR defines a different acknowledgement and achievement of justice. He states that parties can no longer expect indulgence if they fail to comply with procedural obligations, and that efficiency, proportionality and consideration of other litigants and court resources are to constitute new cornerstones to this ‘different justice’.  

Shut out: The UK Supreme Court’s first "secret hearing"

Bank Mellat v HM Treasury UKSC 2011/0040     The Supreme Court held a hearing in secret today, for the first time in its history.   According to the BBC, the justices spent 45 minutes in a locked session with a security guard stood outside the door to prevent anyone from entering. The hearing was so sensitive that the justices had to leave one courtroom and set up in another which had greater soundproofing.   The hearing arises out of the Treasury’s decision in 2010 to ban an Iranian bank from operating in the UK, using powers under the Counter-Terrorism Act 2008. The government alleged that the bank had been indirectly involved in financing companies linked to the Iranian nuclear programme.   At first instance, Mr Justice Mitting permitted some of the government’s evidence to be adduced behind closed doors on grounds that it contained sensitive material that may compromise national security. The first instance judgment was therefore produced in two drafts, with only the redacted version being made available to the public.   A nine-strong panel decided that the court did have jurisdiction to consider the closed judgment, but would only do so if persuaded (on the basis of submissions in open court) that it was necessary for the purpose of fairly disposing of the appeal. At that stage the court was not so persuaded. Lord Hope described the government’s refusal to spell out even its basic national security case in open court as ‘cloak and dagger stuff’ that was ‘difficult to swallow’.   The court was reluctantly persuaded this morning that it was indeed necessary to consider the closed judgment and that this would necessitate a closed hearing. According to Lord Neuberger ‘unless and until an appellate court sees the judgment, it often cannot be sure its contents will be irrelevant or that its contents have been fully gisted’. He went on ‘no doubt in due course when we have completed the closed hearing...we will have quite a few things to say about this unhappy procedure.’   The court clearly has it in mind to use this episode to issue guidance to other courts faced with similar requests for a closed hearing. But whatever tests and safeguards are laid down, the use of secret courts is bound to become more widespread with the passage of the Justice and Security Bill.   Where litigants are prevented from seeing the State's evidence against them, hearing its submissions on that evidence, or understanding what part that evidence played in their claim being dismissed, the balance of justice is dangerously skewed. And far from being immune to these changes, PI litigation, employers’ liability in particular (for instance, claims by wounded servicemen against the MoD) may yet become the area of law most acutely affected.

Long live the Litigant in Person

Some of the readership may have heard there was a move by the Civil Justice Council to rebrand LiP’s “Self Representing Litigants”.   This is now not going to happen. Lord Dyson, Master of the Rolls has stated:   “The term ‘Litigant in Person’ (LiP) should continue to be the sole term used to describe individuals who exercise their right to conduct legal proceedings on their own behalf “   See the short practice guidance by following this link:   https://dl.dropbox.com/u/18097599/annex-a-practice-guidance_litigants-in-person-2.pdf   This sensible decision is welcome as it was important to clear this up before "J day" as it is widely expected that there will be many more LiPs as a result of the costs reforms.    

CFAs prior to 1st April 2013 - will the old or new rules apply?

What do you have to do to ensure that Parts 43 to 48 of the existing rules continue to apply to CFAs entered into before 1st April 2013? Do advocacy or litigation services have to be provided before 1st April 2013 or not? For the existing rules to continue to apply to CFAs entered into before 1st April 2013 what needs to be done prior to 1st April 2013 will depend on whether you are acting under a Conditional Fee Agreement or a Collective Conditional Fee Agreement (those are the two funding arrangements defined by rule 43.2(1)(k)(i) of the existing rules). If you enter into a Conditional Fee Agreement prior to 1st April 2013 specifically for the purposes of provision of advocacy or litigation services to a person in relation to the matter which is the subject of proceedings then the new rules (CPR r.48.2(1)(a)(i)(aa)) state that the old Parts 43 to 48 will apply (with modifications about which we are yet to hear). There does not appear to be any suggestion that advocacy or litigation services actually need to be provided prior to 1st April 2013. The story is different if you have a Collective Conditional Fee Agreement. In that case the new rules seem to state that, for the old rules to apply, you have to have provided advocacy or litigation services to the person by whom the success fee is payable prior to 1st April 2013. The drafters of the rules could have made it a lot easier to understand what they were getting at by actually referring to CFAs in r.48.2(1)(a)(i)(aa) and CCFAs in r.48.2(1)(a)(i)(bb). A bit more clarity is provided by the explanatory note to Article 6 of the Conditional Fee Agreements Order 2013 (http://www.legislation.gov.uk/ukdsi/2013/9780111533437) which states “Article 6 contains a transitional and saving provision. The effect of the transitional provision is to provide that articles 4 and 5 do not apply to a CFA entered into in respect of a claim for personal injuries, or to a collective CFA under which advocacy or litigation services are provided to a person in respect of that claim, before the day on which these regulations comes into force” (i.e. 1st April 2013). That’s my take on the current rules which are still being finalised. I ought to add, in the time-honoured fashion, that this does not constitute legal advice and liability for any reliance placed on it is disclaimed…

Post Jackson CPR Amendments published – a brave new world?

The Civil Procedure Rule Committee has published CPR amendments due to come into force on 1st April 2013. Some of the key provisions for PI practitioners are as follows:- Amendment to the Overriding Objective The overriding objective will become not just “to deal with cases justly” but also “at proportionate cost”; and the definition of “dealing with a case justly” will now include “enforcing compliance with rules, practice directions and orders”. This puts both costs and compliance with directions right at the heart of the Rules – with these changes it will become more difficult to point a judge to the overriding objective when asking him or her to overlook a breach of the rules. Relief from Sanctions Talking about breaches or rules and court orders, CPR 3.9 is to be revised taking out the familiar checklist. Instead, the court will consider all the circumstances, including specifically the need for litigation to be conducted efficiently and at proportionate cost, and the need to enforce compliance with rules, practice directions and court orders. As above, this does represent a significant shift in approach. Costs Management The amendments will introduce a comprehensive set of rules on cost management for multi-track cases, including costs budgets. These merit detailed consideration. There are some sanctions in the event that these rules are not complied with – for example, failure to file a costs budget will mean the litigant is treated as having filed a budget comprising only the applicable court fees (unless the court orders otherwise – see above). Increased Small Claims Track limit The Small Claims Track limit is raised to £10,000: but low value personal injury claims for general damages over £1,000 will continue to be Fast Track cases. The current rules regarding harassment; unlawful eviction relating to residential premises; and disrepair will remain. New Provisions relating to Disclosure These will include a requirement for parties to discuss and seek to agree a proposal in relation to disclosure meeting the overriding objective. Bonus for Claimants beating Part 36 offers In addition to interest on damages; costs on the indemnity basis; and interest on those costs, Claimants who beat their own Part 36 offers will be entitled to an “additional amount”, 10% of the sum awarded to the Claimant (where the claim is a money claim) up to £500,000 and 5% of the sum above that, up to a maximum £75,000. For non-money claims, the bonus applies to the sum awarded to the Claimant in respect of costs. Costs CPR 43 is revoked, and Parts 44 – 48 are replaced in full. That’s to say, all the existing sections of the CPR relating to costs are to be changed. Below are some of the key points from the new provisions:- Assessment of Costs When assessing costs, the court will “only allow costs which are proportionate to the matters in issue”. Costs that are disproportionate may be disallowed even if they were reasonably or necessarily incurred. Costs are proportionate if they bear a “reasonable relationship” to the sums in issue; the value of non-monetary relief; the complexity of the litigation; additional work caused by the paying party’s conduct; any wider factors such as reputation or public importance. This rule only applies to cases commenced after 1st April 2013. Qualified One-Way Costs Shifting This applies in personal injuries and Fatal Accident claims. It does not apply to pre-action disclosure. There is no means test: this is of general application. Qualified one-way costs shifting means that costs orders may be enforced against a claimant only to the extent that the aggregate sum of such orders does not exceed the aggregate sum of damages and interest made in favour of the Claimant. In practice, this will work as follows:-   a) Where a claim is dismissed, the Claimant receives no damages or interest. A costs order will be made in the Defendant's favour, but the Defendant will not be able to enforce the costs order against the Claimant to any extent.   b) The Claimant recovers damages, but fails to beat the Defendant's Part 36 offer. A costs order will be made in the Defendant's favour pursuant to Part 36. But this can only be enforced up to the total of the damages and interest payable to the Claimant. So if the Claimant is awarded £20,000 damages and interest, this figure provides a cap on the costs that can be enforced against the Claimant.   c) Interim costs orders have been made in the Defendant's favour, but the Claimant untimately succeeds. As above, the Defendant will be able to enforce its costs orders, but only up to the total of the Claimant's damages and interest. There are some exceptions, though:- Where proceedings have been struck out on the basis that a) they disclose no reasonable grounds for bringing the proceedings; b) the proceedings are an abuse of process; or c) where the Claimant’s conduct is likely to obstruct the just disposal of proceedings, there is no qualified one-way costs shifting. Where the claim has been found to be “fundamentally dishonest” the court may grant permission for the Defendant fully to enforce the costs order. Claimant’s Costs where there is a Damages-Based Agreement The Court will make the same costs order in the Claimant’s favour as if there were no damages-based agreement.

Applicable Law in Tort under Rome II and English Case Management Decisions

    It’s one of the oldest chestnuts in private international law and has been brought into sharper focus by the Rome II Regulation on applicable law in tort. Assume that the English Claimant is catastrophically injured in a road traffic accident in France. The Claimant sues the tortfeasor’s French insurer in the English Courts (in line with his right to do so under section 3 of the Brussels I Regulation and the Odenbreit (2007) decision of the ECJ). Liability is not in issue and it is agreed that, by reason of Articles 4 and 15 of Rome II, French law will apply to the assessment of the Claimant’s damages. The Claimant wishes to rely on a panel of English experts (medico-legal and non-medical) of the kind usually instructed in catastrophic injury claims case managed and tried in this jurisdiction. The Defendant insurer, by contrast, wishes to restrict the Claimant to the sort of expertise that a French Court would rely upon (usually, one principal expert and a very limited number of additional experts). The Defendant’s argument is that the English Court – required to assess damages on a French law basis – needs, so far as possible, to adopt and replicate the approach that would be taken by a French Court. The Claimant argues that the selection and instruction of expert witnesses is a matter reserved to the law of the forum (English law) by reason of Article 1.3 of Rome II. An issue of just this kind arose in the very recent decision of Tugendhat J in Wall v Mutuelle de Poitiers Assurances [2013] QB 53 (QB). The following preliminary issue was tried, “Does the issue of which expert evidence the court should order fall to be determined: (a) By reference to the law of the forum (English Law) on the basis that this is an issue of ‘evidence and procedure’ within Article 1.3 of Rome II; or (b) By reference to the applicable law (French law) on the basis that this is an issue falling within Article 15 of Rome II?” The academic writing on this issue was somewhat mixed and inconclusive. However, Tugendhat J resolved the preliminary issue – thought to be the first time this question had been tried in this jurisdiction – by accepting the Claimant’s argument: the instruction of experts is a matter of evidence and procedure and, therefore, a matter for the law of the forum (English law). There is an application by the French insurer for permission to appeal.

Claimant’s solicitors pay wasted costs in RTA case

  The defendant insurers in the case of Rasoul v Linkevicius (5th October 2012, Unreported), successfully obtained a wasted costs order against claimant solicitors in an RTA claim. The case is a warning to claimant solicitors in RTA claims where there is an allegation of fraud and parties/witnesses who do not speak English. For defendants it is a lesson in how clear allegations set out from early on can have devastating consequences.  The background facts are similar to those commonly encountered in practice. Following the RTA correspondence ensued between the claimant’s solicitors and the defendant insurers. A modest PI claim was made and the insurers questioned the bona fides of the claim. The Defence pleaded fraud clearly against the claimant. He served a witness statement which did not have an integral statement of truth – the statement appeared on a separate sheet of paper rather than being part of the body of the statement itself. Two witnesses provided statements with statements of truth. At trial the claimant gave no evidence as only spoke Kurdish and was illiterate. His statement had been in English and not translated. The husband and wife witnesses were Kurdish. The husband spoke reasonable English but had given his statement over the phone to a solicitor he had not met and at trial he said that his statement was a substantial expansion of what he told the solicitor. The other witness (his wife) spoke no English – her husband translated for her whilst the solicitor took the statement over the phone. She gave evidence that she had never spoken to the solicitor before the statement arrived. Unsurprisingly the case was dismissed and the judge referred to either the extreme incompetence on the part of the solicitors or an attempt to establish a case on fabricated evidence. The insurer made an application for a waste costs order against the solicitors. The judge made an order on the basis that there was no evidence of a proper signed statement from the claimant or the witness taken before proceedings were issued. Although an interpreter turned up at trial he was not allowed to be used as there had been no order relating to his attendance. The judge was critical that the witnesses were not seen face to face by the solicitors given the allegations of fraud. He concluded that proper competent work by the solicitors would have ensured that the case collapsed long before the trial took place. Defendants will be alert to the possibility of pursuing claimant solicitors where fraud has been alleged, there has been incompetence on the part of claimant solicitors which, had it not taken place, would have been likely to have meant the case would not have gone ahead. Claimants will want to see witnesses and take statements face to face where there are allegations of fraud. They must ensure that a proper ‘integral’ statement of truth is signed on the witness statement. If someone is unable to speak English it is essential that a translator is involved in the process of taking the statement, that the statement is translated, the translator makes an appropriate statement (see Practice Direction to Part 32) and the presence of a translator at trial is anticipated by a court order. Careful preparation needs to be undertaken so that solicitors can protect themselves by showing that a witness did give the evidence set out in the statement – even if they deny it at trial and seek to blame it on the solicitors.  

Should the solicitor pay up?

Can a solicitor be liable for costs if he or she takes on a case for an impecunious claimant under a CFA where there is no ATE insurance policy in place and where he or she funds the disbursements necessary to allow the case to proceed?   Neil Hamilton famously sued Mohammed Al-Fayed for defamation over ‘cash for questions’, lost and was ordered to pay £1.3m in costs. Mr Al-Fayed then pursued Mr Hamilton’s financial backers (not parties to the litigation) for costs, lost and was ordered to pay their costs. Unsurprisingly there has not been as much media attention and public interest in the case of Tinseltime v Eryl Roberts [2012] EWHC 2628 which was a case in the technology and construction court. There was no personal injury involved: the claimant claimed that the defendant had created dust whilst demolishing a building and the dust had damaged machinery and caused a loss of profit. The claim was unsuccessful and the claimant was ordered to pay the defendant’s costs. The defendants applied for an order under section 51(3) of the Senior Courts Act 1981 and/or CPR 48.2 that the claimant’s solicitor pay the costs as a non-party funder. The claimant’s solicitor had entered into a CFA. He had been unduly optimistic about how straightforward the issue of liability would be. It was clear that he was aware that if the claimant lost it would not be able to pay costs. He estimated the overall costs likely to be incurred to be £20,000 and disbursements, £10,000. In the event disbursements amounted to £22,270 and so burnt a sizeable hole in his pocket. He had expected to recover the disbursements from the defendant (if successful). The judge concluded that the following were the correct legal principles to apply. The first question was whether it just in all the circumstances to make an order. Secondly, when considering a solicitor, had he acted beyond or outside his role as a solicitor conducting litigation? Thirdly, the fact that a solicitor is acting under a CFA and stands to benefit financial from the outcome does not mean he has acted beyond or outside his role as a solicitor. Fourthly, the starting point is that the position of a solicitor funding disbursements is no different from one who is not as both positions are legitimate and meet a legitimate public policy aim. The judge was of the view that, in order to be successful in applying for a non-party costs order there would have to be present either some financial benefit to the solicitor over and above the benefit which he could expect to receive from the CFA or some exercise of control of the litigation over and above that which would be expected from a solicitor acting on behalf of a client (or a combination of both). By way of example the judge suggested that a solicitor’s desire to achieve a successful outcome might cause him to take over the running of the litigation for his own ends. Another example was of a case where the damages claimed were modest in comparison to costs incurred so that the client had lost interest in the proceedings but the solicitor was wedded to them in order to recover his costs. The circumstances of a case might justify the conclusion that a solicitor was making all the decisions for his own benefit. The defendants argued that the claimant’s solicitor had acted improperly, unreasonably or negligently in his conduct of the case. The judge said this was the province of wasted costs (which were not awarded - although pursued in the alternative). He said courts should be astute to keep wasted costs and non-party costs separate. The claimant’s solicitor may have misjudged the case but he came out of the judgment rather well. The judge commented that he was not motivated solely by financial self-interest but with the laudable aim of providing access to justice to the claimant. He thought the claim was genuine and had written a file note stating “the company has been crippled by the defendant tortfeasors and needs assistance.” The judgment draws to a close effectively with a warning against letting financial self-interest get the better of you and an encouragement from a judge to practitioners to be motivated not solely by financial self-interest but by a concern for justice and access to justice. Such a consideration (and file-note for the record!) might well prove worthwhile… Photograph courtesy of freefoto.com

Court of Appeal tightens up on relief from sanctions

Jackson LJ considered case management decisions in his report on costs in civil litigation. He said:-   "...courts at all levels have become too tolerant of delays and non-compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting on the civil justice system. The balance therefore needs to be redressed."  Earlier this year, in Fred Perry v Brands Plaza Trading Limited [EWCA] 2012 Civ 224, the Court of Appeal agreed and applied CPR 3.9 in a way which attempted to redress that balance.   The Defendant had been in breach of a series of orders. Unless orders had been made, the Defendant had not complied and the defence was struck out. The Defendant applied for relief from sanctions. The Court of Appeal reiterated that the interests of the administration of justice - the first item on the CPR 3.9 checklist - requires that parties comply with court orders, and particularly so where the order in question is an Unless order. This is a welcome reminder that the interests of the administration of justice are not necessarily the same as the interests of justice.   The Court of Appeal was critical of the Defendant’s attempt to argue that the Unless should not have been made or was too onerous. It was inappropriate to make a collateral attack on the order in an application for relief from sanctions: if the Defendant did not like the order its remedy was to appeal, which it had not done. The judgment emphasised that the first instance judge has a wide discretion when considering an application for relief from sanctions. The Court of Appeal approved of the judge’s exercise of discretion, and noted that judges who made robust but fair case management decisions should be supported. Lord Justice Jackson was on the panel and made the further point that CPR 3.9 is due to change with effect from 1st April 2013. The familiar checklist is due to be replaced with the following:- "On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider the circumstances of the case, so as to enable it to deal justly with the application including the need – (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and court orders."  Lord Justice Jackson commented that after 1st April 2013, “litigants who substantially disregard court orders or the requirements of the Civil Procedure Rules will receive significantly less indulgence than hitherto”.