piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Claims and Counterclaims: RTA uplifts and settling on the day of trial

Slade J handed down judgment this week in an appeal concerning the question of whether the claimant's legal representatives were entitled to a 100% uplift on their costs, in accordance with the fixed uplift regime for conditional fee agreements in road traffic cases, where the case settled on the day of trial, but before the trial commenced.  She also addressed the vexed question of whether the difference in wording between CPR 45.16 and 45.17 means that solicitor's and counsel's uplifts should be treated differently. In Amin (1) Hussain (2) v Mullings (1) Royal Sun Alliance (2) [2011] EWHC 278 (QB) the facts were typical.  The first claimant (A) was involved in an accident with the first defendant (M) when driving the second claimant's car (H).  A and M blamed each other for the accident.  A brought a claim against M and M counter claimed.  One month before trial the quantum of A's claim was agreed, subject to liability.  By the time the matter was heard by the Recorder on the day of trial the parties had agreed to a 50:50 division of liability and all of M's counterclaim was agreed save for the amount he was entitled to for hire of an alternative vehicle, the only issue which the Recorder was asked to determine.  The Recorder ordered each party to pay the costs of the other of pursuing their claim and awarded each party a 100% uplift on the ground that both the claim and the counterclaim had concluded "at trial" within the meaning of CPR 45.15 and therefore both solicitor and counsel for A were entitled to 100% uplifts on their costs under CPR 45.16 and 45.17.  He gave judgment that "at trial" must include the date or time the trial is fixed to take place and include negotiations that take place on the day of trial to settle the claim or narrow the issues before the hearing commences.  It was submitted on behalf of M and M's insurer that the Recorder had erred in failing to distinguish between the hearing of the counterclaim, which related to the trial of M's claim and A's claim, which was wholly compromised before the hearinng commenced. Slade J held that the Recorder erred in concluding that "at trial" is not defined in CPR 45.  She said "it is clear from CPR 45.15(6)(b) that "at trial" means at a contested hearing.  As is clear from CPR 45.17(1)(a) and (b)(i) the rules recognise a distinction between a trial and the date fixed for the commencement of the trial.  Further, the rules recognise a distinction between the conclusion of a claim after and before a trial has commenced.  Settlement before a trial commences and conclusion by settlement after a trial commencese could both occur on the date fixed for the trial.  The trigger for entitlement to a 100% uplift in fees is  not a settlement on a particular date but a settlement or conclusion after a trial, defined as a hearing, has commenced." Slade J was went on to consider whether there should be any difference in the way solicitor's and counsel's uplifts should be approached arising out of differences in the wording of CPR 45.16 and CPR 45.17.  She considered two conflicting decisions concerning counsel's uplift under CPR 45.17 when a case settles on the day of trial but before the hearing commences.  She approved the decision in Sitapuria v Khan, an unreported decisoin of the Liverpool County Court on 10 December 2007 and declined to follow the decision in Dahele v Thomas Bates & Son Ltd an unreported decision of the Supreme Court Costs Office of April 17 2007.  She held that the meaning of CPR r.45.16 was clear. Its language was not to be given a different meaning to accord with a construction of r.45.17 in order to deal with a perceived lacuna in r.45.17 in relation to the uplift in counsel's fees, as had been done in Dahele.   This is an important decision to be aware of because is addresses two commonly encountered issues.  First, Slade J grapples with the knotty problem of uplifts for both parties where there is a claim and counterclaim but only part of one of the claims remains outstanding at the commencement of the hearing.  Secondly, she considers the difficulty of the competing decisions in Sitapuria and Dahele, both first instance decisions that are no more than persuasive and provides helpful guidance on the interpretation of CPR r 45.16(1) and CPR r 45.17(1), bearing in mind the differences in their wording.  The correct uplift to solicitor's fees where the claim settled before commmencement of the hearing, regardless of whether it was on the day of trial, was 12.5 per cent.  She then went on to say that the language of r.45.17(1)(a) was the same as that of r.45.16(1)(a).  There was no reason to distinguish it from the clear meaning of that provision.  If there were any doubt about the construction of r.45.17(1)(a), in the absence of any basis for ascribing a different meaning to the words "the claim concludes at trial", they should be construed consistently with their clear meaning in r.45.16(1)(a).  Although the proper construction of r.45.17(1) as it applied to the conclusion of claims on the day fixed for trial but before trial commenced was not immediately apparent, there was no lacuna in the rule.  On its proper construction such a settlement gave rise to an entitlement to an uplift in counsel's fees of 50 per cent in a fast track road traffic claim.  

RTA Insurer not liable for the 'same damage' as its insured

In Jubilee Motors Syndicate v Volvo Truck & Bus (Southern) Limited (2010) Jubilee, a road traffic insurer within the meaning of the Road Traffic Act 1988, had been ordered to pay damages following the settlement of a claim against its insured (Volvo) by an injured third party. Jubilee thereafter instigated contribution proceedings against its insured under the Civil Liabiliy (Contribution) Act 1978. Its argument was two-fold. First, it alleged that it was a "person liable in respect of the same damage" as its insured under section 1(1) of the 1978 Act. Alternatively, Jubilee  relied upon section 1(4) of the Act, which provided that "a person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage" Striking out the contribution claim, the Court held that the terms "same damage" and "in respect of" in s.1(1) of the 1978 Act had to be construed narrowly, in accordance with established case-law. Unlike any potential liability that Volvo might have owed the injured third party directly (i.e as the tortfeasor), Jubilee's liability was contingent on its contractual obligations under the policy of insurance. The 1988 Act did not render Jubilee liable for the third party's personal injuries as such, but rather to satisfy a judgment resulting from the third party's suffering of those personal injuries, as caused by Volvo. Jubilee had never caused the third party any loss or injury. It was never directly, or vicariously, liable for the third party's injuries and could not be regarded as a  'wrongdoer' of any kind.  The claim under s.1(4) of the 1978 Act was also struck out. That section could not be read as having a meaning different from, or extending beyond, the court's definition of "same damage" in s.1(1) of the 1978 Act. Both sections had to be read together. Do you agree with the Court's analysis in this case? Should it matter that Jubilee's liability to pay the agreed settlement with Volvo arose either from the Statutory framework under the Road Traffic Act 1988, or under the policy of insurance?      

Part 36 and interest on future losses

A claimant beats his Part 36 offer and gets substantial damages for future losses. Under CPR 36.14(3)(a) he's entitled to "interest on the whole or part of any sum of money (exlcuding interest) awarded at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired" (emphasis added). Does any sum of money include future losses? No, according to the Court of Appeal in Pankhurst v MIB [2010] EWCA Civ 1445. 

Limitation Periods and Abuse of Process

The Court of Appeal has recently attempted to bring some clarity to this area of the law which had become extremely complex.   The Historical Perspective The House of Lords in Horton -v- Sadler (2006) UKHL 27, overturned Walkley -v- Precision Forgings Ltd (1979) 1 W.L.R. 606, and held that s.33 of the Limitation Act 1980 gave a wide and unfettered discretion in relation to the second action to disapply the time limit of three years contained in s.11 of the Act, having regard to the degree to which the parties would be prejudiced and taking into account all circumstances. In Janov v Morris (1981) 1 W.L.R. 1389, the court found that delay in prosecuting an action could amount to an abuse where the default was "intentional and contumelious" or the delay had been "inordinate and inexcusable". This was not followed in Gardner v Southwark London Borough Council (No.2) (1996) 1 W.L.R. 561 (CA), which held: "...a plaintiff who for reasons of negligence, dilatoriness, lethargy or mistake fails to apply for a hearing date before the guillotine date and so suffers the consequences of Ord. 17, r. 11(9), cannot be treated as if he were guilty of wilful or contumacious disobedience" (my emphasis). In Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd (1998) 1 W.L.R. 1426 (CA), Lord Woolf held a "wholesale disregard of the rules is an abuse of process...". This found favour with Chadwick LJ in Securum Finance Ltd v Ashton (2001) Ch. 291 (CA), who held: "whether the claimant's wish to have a 'second bite of the cherry' outweighs the need to allot its own limited resources to other cases. The courts should now follow the guidance given by this court in the Arbuthnot Latham case. " Aldi Stores Ltd -v- WSP Group Plc (2007) EWCA Civ 1260; and Stuart -v- Goldberg Linde (2008) EWCA Civ 2 held that, although the decision whether to strike out a claim on the ground of abuse is ultimately a matter for the court's discretion, the finding of abuse was a judgment which was either right or wrong, albeit it involved an assessment of a large number of factors and might for that reason be hard for an appellate court to dislodge. The CPR introduced a stricter regime for compliance with court orders. May LJ in Vinos -v- Marks & Spencer Plc (2001) 3 All E.R. 784 (CA) and Godwin -v- Swindon BC (2001) EWCA 1478  held that there is nothing unjust in a system of limitation and parties who do not issue in time risk having their cases struck out.   The Present Case In Aktas -v- Adepta; Dixie -v- British Polythene Industries Plc [2010] EWCA Civ. 1170 (22/10/2010) the Court of Appeal (Rix LJ, Longmore LJ, Aikens LJ) specifically considered the question of when a failure to serve proceedings within the limitation period could by itself amount to an abuse of process. The court could find nothing to suggest that failure to serve in time is tantamount to abuse, nor in various other cases put forward by the defendants. Rix LJ, held that, even in this post-Horton era, the abuse of process point could succeed. He held: ·         A mere negligent failure to serve a claim form in time was not an abuse of process; it had never been held to be in any of the many cases cited to the court, nor in Rix LJ’s judgment should it be described as such, nor as being tantamount to such; ·         All the cases made clear that for a matter to be an abuse of process, something more than a single negligent oversight in timely service was required; the various expressions used are: inordinate and inexcusable delay / intentional and contumelious default /  wholesale disregard of the rules; ·         Abuse could not be assumed for failure to comply simply because the rules of service are strict; ·         Nor was misuse of court resources enough to turn such behaviour into an abuse; ·         Lateness in service in breach of the rules did not by itself amount to an abuse of process; ·         On the facts of the instant case, the breach did not prevent the court from exercising its s.33 discretion to allow the action to proceed.

Part 36 and time-limited offers

Since the new Part 36 regime came into force many parties continue to make old style offers which are specifically expressed to be open for 21 days.   Such offers conflict with the new provision that Part 36 offers can, broadly speaking, be accepted at any time until the trial has started (36.9(2)) unless they are withdrawn.   So how are litigants supposed to treat offers which say on their face they are Part 36 offers, but also say they are only open for acceptance for 21 days?   The High Court recently answered that question in C v (1) D (2) D2 [2010] EWHC 2940 Ch. Mr Justice Warren’s answer is that a time limited offer cannot be a Part 36 offer at all (see paragraph 27).   The ramifications of this are very significant indeed:-   1)      Time limited offers nonetheless expressed to be made pursuant to Part 36 are simply not open for acceptance after the time limit has passed. 2)      Time limited offers which are beaten will not result in Part 36 costs consequences, as they are not Part 36 offers. Such offers do not provide Part 36 costs protection.  3)      When drafting a Part 36 offer care must be taken to ensure that the wording of the offer does not conflict with the wording of CPR Part 36 as if it does the other side can rely on C to argue it is not a Part 36 offer at all.