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Late amendments, strike outs, summary judgment & remote heads of loss

  The High Court has recently handed down judgment in Gonul Guney v Kingsley Napley & Anor [2016] EWHC 2349 (QB). This was a professional liability claim based on the Claimant's retainer of the Defendant solicitors, in respect of litigation concerning the estate of the Claimant’s father. It touches upon a number of issues of interest to those involved in a broad range of civil litigation.   Mrs Justice McGowan recited that in very simple terms that action is based on the Defendants' alleged negligence, it having been alleged that had she been properly advised the Claimant would have settled a claim brought by a third party at a much earlier date and thereby avoided liability for the Defendants' costs after that date as well as those of the said third party.   The court was faced with cross applications: By an application issued on 12 April 2016, the Defendant “applied for summary judgment against and/or to strike out of parts of the claim in relation to various heads of loss...” The Claimant “[a]s late as 31 August 2016... served an application for permission to re-amend the Particulars of Claim. By this new application she seeks to introduce two new aspects to the claim.”   The Claimant argued that the proposed amendments should not be regarded as truly late, as they would not cause the trial to be derailed, that the same would only have limited impact on the case, and turn on factual evidence from the Claimant and family members, and the same were necessary to ensure justice is done between the parties.   The Defendant diametrically-opposed submissions were that the proposed amendments were both fundamental and too late. In addition, they submit that there are entirely at odds with the pleaded case.   McGowan J produced a summary of the law pertaining to such applications:   “The imperative of strict adherence to the rules of procedure governing the conduct of litigation has changed substantially in recent years. ... Inaction or flawed action can now be penalised even without proof of serious consequential effect on the litigation [Mitchell and Denton considered] ... Delay will meet with less tolerance and intervention to ensure that only those matters which should be litigated are... The rules are not inflexible but will be enforced strictly, more strictly than before...” (paragraph 17)   “It is a balancing act between competing factors and is a matter of discretion. ... It is no longer acceptable to use the test advanced by the Claimant in this case that if the trial date can withstand the amendments, they should be allowed without more. If the date fixed for trial is to be lost, then the factors would need to be extremely compelling. ...” (paragraph 18)   “In this application there is no reason given for the lateness of the proposed amendments. Nothing is raised in the application that could not have been pleaded in the original or amended Particulars of Claim. No explanation is given for the omissions or the delay...” and that the point was of great significance and if allowed “[t]he entire nature of the litigation would have been different” (paragraph 19)   It was not accepted “that all evidence, factual and expert can be obtained and exchanged within a timeframe that does not imperil the trial date...”  (paragraph 20)   “A compelling factor, capable of determining the outcome is much more likely to be admitted that a "kite being flown" in forensic terms” and “There is nothing compelling in the amended claims that would be pursued if these amendments were allowed” (paragraph 21)   The learned judge held as to the Claimant’s application to amend was manifestly made as a reaction to and in an attempt to defeat the Defendant’s Applications, and were “misconceived and much too late in the protracted history of this litigation” (paragraph 26).   In respect of the Defendant’s Applications, it was held that its applications for summary judgment and/or strike out are made in good time.   The court gave summary judgement as to two aspects of the claim relating to whether the Defendant breached its fiduciary duty and an alleged lost opportunity to share in the increase in value of estate property.   The Court struck out the claim for loss of profits brought by the Claimant (a solicitor herself) to her own practice in assisting the gathering of evidence for the case. It was held that the Defendants had not “been put on notice that this was having a detrimental effect on her own practice and it was never in the contemplation of the parties that they had assumed such a risk. Even if they had been made aware of such a risk it is too remote from the duties they assumed to include this. In any event this has never been particularised and still remains an assertion without evidence.” (paragraph 24)   The Court also struck out the claim for damages for stress and inconvenience. It held “Such general damages are irrecoverable. This was a not a contract for the provision of a holiday, a pleasurable activity relaxation or peace of mind. ... This was a contract to act in relation to a family dispute over inheritance matters. It is too remote to say that solicitors conducting litigation assume liability for the stresses that that imposes on the litigants involved. It is difficult to imagine what would happen to litigation if there was such a general duty. The Claimant denies that this is a personal injury claim and relies on Malyon v Lawrance, Messer & Co [1968] QBD 2 539 but that was a case in which the litigant claimed damages for the aggravation of his injuries by the solicitors' negligent delay when those injuries were the cause of action in the case. This claim discloses no reasonable ground and has never been particularised.”   The judgment is available at http://www.bailii.org/ew/cases/EWHC/QB/2016/2349.html.

Damages for abuse

The Claimant in KCR v The Scout Association [2016] EWHC 597 (QB) suffered sustained abuse by a Cub Scout Group Leader when a young boy in the 1980s. In 2003 the abuser was convicted of a large number of sexual offences against boys including the Claimant. As might be expected, given recent trends in this area of law, the Defendant admitted that it was vicariously liable for the abuser’s actions. The court was therefore concerned solely with the assessment of damages. The case had one feature that is depressingly common and one that is rather unusual. It is also, in more general terms, a helpful illustration of how courts may approach the difficult issues that cases of this kind throw up. It is often the case that victims of abuse are peculiarly vulnerable individuals. Sometimes this gives the abuser the opportunity to perpetrate abuse (for example, if a child is in care) or prevents the abuse being detected (because there is no-one the child can trust enough to confide in). The correlation (or at least frequent concurrence) of pre-existing vulnerability and abuse makes determining issues of causation in such cases difficult, because children who have experienced traumatic childhoods may already be destined to lead difficult adult lives in any event. In this case, the Claimant’s parents separated when he was four or five years old after his father had been violent towards his mother. He began using drugs in his teens and subsequently obtained his income principally from drug-dealing, with the exception of a few short-lived periods when he was in employment. He had a number of convictions for offences relating to drugs, firearms, dishonesty and violence.   The Claimant contended that he was entitled to a Blamire award for loss of earnings, past and future, on the basis that his inability to find sustained employment was a result of the abuse he had suffered. The Defendant accepted that the Claimant was entitled to general damages, but disputed the loss of earnings claim, contending that it was his “lifestyle choices” rather than the abuse that had prevented him being in sustained employment. The Defendant further contended that, even if factual causation was established, much of the Claimant’s loss should be deemed irrecoverable as a matter of public policy because it arose from the consequences of the Claimant’s own criminal conduct. After a careful analysis of the facts, the court preferred the Defendant’s case on causation. As a result, it did not have to go on to consider the application of the ex turpi maxim. It assessed general damages at £48,000 and dismissed the claim for aggravated damages with reference to Richard v Howie [2004] EWCA Civ 1127. The unusual feature of the case was that at the time he was subject to the abuse, and for some time afterwards, the Claimant and another boy effectively blackmailed the abuser when they realised they could demand from him rewards of money and material possessions in return for keeping quiet about the abuse. The Defendant contended that it should be given credit for the sums thereby extorted from the abuser by the Claimant. It was prayed in aid in support of this submission that the Claimant had himself described the payments in his witness statement to the police as “compensation”. Such a submission is so obviously unattractive that it is perhaps surprising that it was ever advanced and it is not at all surprising that it was rejected by the judge, who held (a) that the payments were gifts and hence could not properly be considered as compensation and (b) that as a matter of public policy the Claimant’s damages should not be reduced as the Defendant suggested. The judge reached the right conclusion, but for the wrong reasons. The payments were not gifts; they were, on the facts, part of a bargain between the Claimant and the abuser whereby the abuser sought to buy the Claimant’s silence so that he could continue to perpetrate abuse (of the Claimant and of others). The real reason the Defendant was not entitled to credit for the payments was that they did not relate to the subject matter of the claim, which was damages for the effect of the abuse on the Claimant in terms of pain, suffering, anguish etc. The abuser made the payments so that he could continue his abuse, not to compensate the Claimant for the effects of that abuse. Because the Defendant’s contention could have been dismissed for that reason, the resort to public policy was unnecessary and possibly unhelpful for future cases where the same or similar issues arise. There may be cases where it would be appropriate for a defendant to be given credit for payments made by an abuser. Suppose an abuser later repented of their abuse and wrote to their former victim expressing contrition for the harm they had caused and enclosing a cheque which the victim banked. Such cases are likely to be exceptional, but as and when they do occur then on what principle of public policy should a defendant who was vicariously liable for the abuser’s actions not be entitled to have that payment taken into account? There will be cases at the margins which will be difficult to decide, but the principle that should be applied remains whether the payments were genuinely compensatory or whether, as here, they were really the price that the abuser was willing to pay to avoid detection. A victim extorting money from an abuser may be unusual but it is not unprecedented. A case that sticks in the mind from criminal law lectures is R v Camplin (“the chapati pan case”) where the defendant murdered his abuser, who he had been blackmailing in return for not revealing the abuse of another boy called “Jumbo”: see the report from the Court of Appeal [1978] QB 254 at 257C. Many of the abuse cases currently working their way through the courts involve wealthy abusers who may have made payments to their victims. How to treat those payments is therefore an issue which the courts are likely to have to address again before too long.

Damages in fatal claims: Mosson v Spousal (London) Ltd

Garnham J's decision in Mosson v Spousal (London) Ltd [2015] EWHC 53 (QB) (http://www.bailii.org/ew/cases/EWHC/QB/2016/53.html), handed down today, contains a number of points of interest in relation to the calculation of damages in fatal claims. The case was brought by the widow of Mr Mosson, who was exposed to asbestos during the course of his employment in the 1960s and 1970s and subsequently contracted mesothelioma from which he died.  Liability was admitted, although an attempt was made to argue that Mr Mosson had been guilty of contributory negligence by allowing himself to be exposed to asbestos during a period of self-employment.  Although the judge was satisfied (at [10]-[25]) that Mr Mosson was self-employed during the relevant period, he rejected the allegation of contributory negligence because there was no evidence as to the extent of his exposure to asbestos during that period (at [26]-[34]). Following a review of the evidence and previous decisions at High Court level, the judge awarded £85,000 for pain, suffering and loss of amenity (at [36]-[47]). So far, so unexceptionable.  However, the case is of particular interest in relation to the judge's decision in relation to a number of comparably modest items which were disputed. First, some items of funeral expenses were in dispute, namely the cost of a wake, clothing purchased for the funeral and a memorial bench.  Those were all disallowed.  In relation to the case of the wake, Kemp and Kemp para 26-061 states that such costs are not recoverable, citing the first instance decision of Benet Hytner QC in Gammell v Wilson [1979] unreported, July 27th (reproduced in Kemp and Kemp para O2-005).  That decision was followed by Bean J in Knauer v Ministry of Justice [2014] EWHC 2553 (QB) at [15] and Garnham J similarly followed it (at [49]).  It seems doubtful whether it is fair that a reception or wake to provide refreshments to those who have attended the deceased's funeral should not be regarded in 2016 as a legitimate funeral expense, subject as always to the question of reasonableness. Garnham J went on also to reject the claims for clothing and a memorial bench.  Again, the claim for clothing had been rejected in Gammell and Garnham J followed that decision (at [50]).  Gammell draws a supposed distinction between "funeral expenses" and "expenses consequent upon death".  Whereas that may be a legitimate distinction, it is hard to see why garments bought solely for the funeral and which have no other use could not be regarded as funeral expenses.  Thus a widow's black mourning dress ought fairly to be regarded as a funeral expense; a man's suit should not due to its other uses. In relation to the memorial bench, there is a long-standing distinction derived from Gammell between tombstones or grave markers which are allowed as funeral expenses, even though they will usually be placed a long time after the funeral, and memorials which are not.  It may be said that this distinction is somewhat arbitrary, but again Garnham J (at [50]) followed Gammell and disallowed the claim. Garnham J (at [51]) also disallowed a claim for the costs of probate.  He was correct to do so.  Claims for expenses incurred by the estate following death are being advanced with increasing regularity and they are misconceived.  Funeral expenses are the sole exception to the general rule that expenses of the estate consequent on death are not recoverable, as should be clear from the wording of s1(2)(c) of the Law Reform (Miscellaneous Provisions) Act 1934, which requires that the estate's claim "shall be calculated without reference to any loss or gain to his estate consequent on his death, except that a sum in respect of funeral expenses may be included".  Thus the costs of probate or, more ambitiously, the costs of administering the deceased's estate are not recoverable: see also Harding v Scott-Moncrieff [2004] EWHC 1733 (QB), para 42.  In one case in which I am currently involved, the claimant's litigation friend is seeking a six figure sum for administering the home of the deceased on behalf of the minor claimant.  Such claims are outside the limited right of action conferred by the 1934 Act. Where Garnham J departed from convention is his rejection of the claim under the Fatal Accidents Act 1976, described as "loss of intangible benefits" as part of the widow's dependency.  Such a head of claim was first recognised in the 1970s in relation to claims by children, initially taking the form of an increase to the award for services dependency and later, in Mehmet v Perry [1977] 2 All ER 529, a separate award.  In the same case, an award was made to the husband.  Since then, awards both to children and spouses have become conventional and are sometimes described as claims for "loss of love and affection".  I have from time to time thought that it was highly arguable that this head of claim cannot properly be said to fall within the notion of a dependency, under which the court is supposed to be reflecting the financial value of the money and services provided to the claimant(s) by the deceased.  It is easier to see how a child's loss of the intangible contribution of a natural parent to his/her upbringing has a very real value which cannot be replaced by a nanny, relative or step-parent, especially in light of the law's long-standing recognition of the innate value of bonds of blood.  However, in the case of an adult, what the court is really awarding under this head is general damages for the loss of a spouse, which is more properly the role of the bereavement award. It is this argument which was accepted by Garnham J in detailed and persuasive reasoning (at [65]-[80]).  He did not hesitate to depart from cases where reasoned awards had been made under this head.  It is worthy of note that counsel for the claimant did not frame his claim as one for "loss of love and affection" but pointed to supposed advantages in the deceased husband providing services to his wife rather than contractors.  As Garnham J pointed out, DIY has both advantages and disadvantages, including relative competence (more of a compelling factor in certain households, including my own, than others). This decision can properly be described as ground-breaking and it is to be hoped that the Court of Appeal will give authoritative guidance on when, if ever, this head of claim should be allowed.  For now, defendants should not concede any claim of this type, at any rate when made by a spouse.