Legal Watch:Personal Injury14th August 2014Issue: 031

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

In This Issue:

• Damages/interim payments• Part 36• Civil procedure/application for inspection of

property• Costs/CFA

Damages/interim paymentsIt has been some time since there has been a case report relating to an interim payment application and Smith v Bailey (2014) EWHC 2569 (QB) will be of concern to defendants.

The claimant/respondent and defendant/appellant had been in a road traffic accident which caused the claimant to be wheelchair dependant for life. He moved into rented accommodation as his previous property, which he had owned, was unsuitable for a wheelchair user. He later identified a new property which he considered to be more suitable. The claimant brought proceedings against the defendant, who denied liability and pleaded contributory negligence. The Master awarded the claimant an interim payment for accommodation costs and, applying the first stage of the test in Eeles v Cobham (2009), awarded that which he considered to be a conservative estimate of what the claimant would be awarded as a capital sum after trial. The Master stated that the burden of proving contributory negligence was on the defendant and that there was no evidence to support that finding. The claimant used the interim payment to purchase the new property.

‘…on an interim payment application there was an evidential burden on the defendant to put before the court evidence of contributory negligence’The defendant appealed and argued that on an interim payment application, the burden was not on him to establish contributory negligence but on the claimant to establish

03

the amount he was likely to recover after trial. Taking into account:

• The possibility of a finding of contributory negligence

• That there was a real prospect of a reduction for contributory negligence as the claimant could have taken avoiding action

• That the Master erred in treating the accommodation costs as falling within stage one of the Eeles test as he could not be confident that the trial judge would decide that the claimant’s needs were better met by buying rather than renting a property

• That the Master’s order awarding interim payment risked fettering the trial judge’s discretion; and

• That allowing the claimant to purchase the property created an unlevel playing field

Dismissing the appeal the High Court judge held that on an interim payment application there was an evidential burden on the defendant to put before the court evidence of contributory negligence. The instant case was not one where such material could not reasonably be expected to have been available to the defendant at the time of the application, as he had had ample opportunity to adduce evidence to the court. The Master had to decide the likely award of damages by reference to the allegations of contributory negligence on the evidence before him. On the evidence he was correct to reject the possibility of a finding of contributory negligence.

The defendant had not provided evidence that he had driven in a manner which should have made the claimant take avoiding action. In the absence of evidence of contributory negligence the Master was justified in treating the likely award of damages to be on the basis of full liability.

The Master could not be faulted for dealing with accommodation costs within stage one of the Eeles test. The Master and the instant court could have a high degree of confidence that the trial judge would award a capital sum in respect of accommodation needs. Whenever there was a serious injury it would very rarely be reasonable to require a claimant to rent rather than buy a property.

Where a claimant wished to buy a property it would only be appropriate in exceptional circumstances to deal with accommodation costs by way of a periodical payment order. There were compelling reasons for permitting the claimant to buy; he had owned his own house, he wanted to provide security for his wife and he did not have a long tenancy of his rented accommodation. If a defendant wished to argue that accommodation costs should not be dealt with, as was usual in stage one of Eeles, it was necessary for him to adduce evidence to support that submission and to satisfy the court that there would be an issue to that effect at trial. However, the defendant had failed to adduce evidence of the availability of suitable rental properties and had not suggested that the claimant’s accommodation needs could be reasonably met by renting rather than buying.

If the interim payment was no more than the capital sum which the trial judge would award for accommodation there was no question of it fettering his discretion in relation to other heads of future loss.

There was no real prospect of the trial judge feeling inhibited in concluding that the property was unsuitable. The risk of prejudicing the trial process by creating an uneven playing field was not a bar to awarding an interim payment and only a factor to be considered. The interim payment represented the minimum amount to which the claimant was entitled. When awarded damages at trial he would be free to spend them as he wished and similar freedom should be attached to the interim payment.

CommentThis case highlights at least two problems that defendants face when confronted with an interim payment application linked to the purchase of a property. The first is the need to address in detail any arguments in relation to liability on the basis that the burden of proving contributory negligence lies with the defendant. The second is the age old concern that the defendant only has a chance of displacing the claimant’s accommodation claim if it identifies and offers the claimant a viable alternative. This case illustrates that on both issues the defendant must be gathering the necessary evidence at a very early stage.

04

Part 36The application of Part 36 continues to exercise the courts. In Elsevier Ltd v Munro (2014) EWHC 2728 (QB) the claimant obtained an injunction restraining the defendant from joining another company prior to the expiration of the twelve-month notice period in his contract of employment in April 2015. The claimant had issued its claim on 4 June 2014 and made a Part 36 offer five days later in which it would allow the defendant to join another company in January 2015. The offer expired on 30 June 2014. The trial commenced nine days later and lasted for a week. The judge ruled that the claimant was entitled to restrain the defendant from joining another company until April 2015. As the judgment was at least as advantageous to the claimant as the Part 36 offer it fell within CPR 36.14(1)(b). The claimant made the instant application on the basis that the defendant had refused the Part 36 offer and the claim had not been a money claim.

The defendant argued that the claimant was not entitled to the order sought as his pleaded claim included a claim for damages and therefore CPR 36.14(3)(d)(i), rather than 36.14(3)(d)(ii), applied, and that no additional amount could be recovered with reference to costs. Also, that making such an order would be unjust as the proximity of the offer to trial meant that there was little time for negotiation, he had not received the claimant’s witness statements until the final day for accepting the offer, and an order would have a disproportionate effect.

Refusing the claimant’s application, the High Court judge held that the damages claim was only ever contingent, to be pursued if injunctive relief was not granted until 10 April 2015. The particulars of claim made that clear. Since injunctive relief had been granted, the claim did not include a money claim. The language of CPR 36.14(3)(d) directed attention to the time at which the court was deciding whether to order payment of an additional amount; “the claim” as set out in CPR 36.14(3)(d)(i) and CPR 36.14(3)(d)(ii) referred to the claim in respect of which the court had given a judgment which was more advantageous than the

offer. If the defendant’s submission had been correct, then in any case where the principal claim was for an injunction but there was an alternative claim for damages, a defendant who had been enjoined after refusing a reasonable offer under Part 36 would have no exposure to any additional liability. That could not have been the intention.

‘…the defendant had a legitimate argument for a shorter period of restraint’It might have been just to impose an additional amount if a claimant made a Part.36 offer which ought to have been seen immediately as at least equal to the best outcome that the defendant could reasonably expect. However, the defendant had a legitimate argument for a shorter period of restraint. Further, it was unduly harsh to criticise him for not accepting the offer promptly given the pace at which the proceedings were advancing, the resulting pressures of that pace and the late stage at which he received the claimant’s statements. Imposing an additional amount would involve an unjust element of penalty.

05

Civil procedure/application for inspection of propertyIn the case of McLennan Architects Ltd v Jones and another (2014) EWHC 2604 (TCC) the claimants applied for an order granting access for its IT expert to examine a computer belonging to the defendants.

During the course of his judgment the High Court judge set out a (non-exhaustive) list of factors to be taken into account (see below) when a court is considering an application under CPR 25.1(c)(ii) for the inspection of relevant property. Similar considerations will probably apply when a pre-action application for inspection is made under CPR 25.5. Factors a) and b) are of general application and would be relevant, for example, to an application to inspect a vehicle. The other factors must be considered in the context of the e-disclosure of documents held on an electronic device but would apply, for example, to an application to ‘interrogate’ a mobile telephone or a laptop.

‘...it is primarily to the overriding objective to which one must look as to the basis on which to exercise the discretion to make this type of order’The judge said that it is primarily to the overriding objective to which one must look as to the basis on which to exercise the discretion to make this type of order. The factors which might properly legitimately be taken into account:

(a) The scope of the investigation must be proportionate.

(b) The scope of the investigation must be limited to what is reasonably necessary in the context of the case.

(c) Regard should be had to the likely contents (in general) of the device to be sought so that any search authorised should exclude any possible disclosure of privileged documents and also of confidential documents which have nothing to do with a case in question.

(d) Regard should also be had to the human rights of people whose information is on the device and, in particular, where such information has nothing or little to do with the case in question.

(e) It would be a rare case in which it would be appropriate for there to be access allowed by way of taking a complete copy of the hard drive of a computer which is not dedicated to the contract or project to which the particular case relates.

(f) Usually, if an application such as this is allowed, it will be desirable for the court to require confidentiality undertakings from any expert or other person who is given access.

06

Costs/CFAAlthough from a defendant perspective CFAs will begin to diminish in significance, the commercial case of Ultimate Products Ltd and another v Woolley and another (2014) EWHC 2706 (Ch) is still important and it is also an early application of Denton.

The respondents had issued proceedings against the appellants for passing off and trademark infringement. They had entered into CFAs with their solicitors, who in turn had entered into CFAs with counsel. Notice of the CFAs had been served on the appellants. However, the CFAs were superseded in the run-up to trial and new CFAs were entered into. The later CFAs included higher success fees, but the solicitors did not notify the appellants by the prescribed form N251 as required by CPR 44.15(2). In the event, the trademark issues were stayed, but the passing-off issues proceeded to trial and judgment was given in the respondent’s favour. The appellants claimed that because they had not been notified of the later CFAs, the respondents were not entitled to recover any success fees. Before a Master the respondents were granted full relief from sanction in respect of the costs of the proceedings at first instance, which allowed them to recover, in principle, any additional liability in respect of the later CFAs.

‘…compliance would have made no substantial difference to the appellants...’Dismissing the appellants’ appeal, the deputy High Court judge held that the respondents’ application for relief from sanction required the court to exercise its discretion under CPR 3.9. Applying the guidance in Denton, the respondents’ failure to comply with CPR 44.15(2) was neither serious nor significant. It did not imperil future hearing dates or

otherwise disrupt the conduct of the litigation or of litigation generally. The appellants did not contend that it made any difference to their conduct of the case or to anyone else’s position. They were aware that the solicitors and counsel were acting under CFAs and that therefore success fees could be payable if the respondents succeeded. They did not know, and had no right to know, the level of those success fees, or indeed any other terms of the CFAs. If the respondents had complied with the notice requirements, the appellants would have known that there were new CFAs in place, but that would have told them nothing more about the terms or amount of any success fee. They would have been, in substance, in exactly the same position. Moreover, the sanction under CPR 44.3B applied only subject to the court’s powers. Regard had to be had to the circumstances and effect of the non-compliance. If, as in the instant case, compliance would have made no substantial difference to the appellants, there was no reason why the court should want to adhere rigidly to the rule or why it would want to deem to be serious or significant a failure which, in truth, was not so. Furthermore, the failure to comply was correctly characterised by the Master as a slip, mistake or oversight on the solicitors’ part. The Master had been fully aware of the terms of CPR 3.9 and had exercised his discretion without material fault. If the instant court were to consider the matter afresh it would reach the same conclusion.

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: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.

www.plexuslaw.co.ukwww.greenwoods-solicitors.co.uk

Contact UsFor more information please contact:

Geoff Owen, Learning & Development Consultant

T: 01908 298216E: gro@greenwoods-solicitors.com

PublicationsIf you would like to receive any of the below, please email indicating which you would like to receive.

Weekly:

• Legal Watch: Personal InjuryMonthly:

• Legal Watch: Property Risks & CoverageQuarterly:

• Legal Watch: Counter Fraud • Legal Watch: Health & Safety• Legal Watch: Marine • Legal Watch: Professional Indemnity • Legal Watch: Disease

To unsubscribe from this newsletter please email:

crm@greenwoods-solicitors.com