Kerry Underwood

PART 36 AND LATE ACCEPTANCE OF A CLAIMANT’S OFFER

with 2 comments


Kerry is undertaking a 10 city Autumn Tour with his new course – Getting the Retainer Right.

For further details click here

 

As we await the decision in the case of the Hislop v Perde, it is interesting to look back at the views of the Court of Appeal on this subject on Thursday 21 March 2002 in the decision in

 

Home Office v Lownds [2002] EWCA Civ 365 (21st March, 2002).

 

This case is better known as being the case that set out the tests to be considered under the old, pre Jackson, proportionality test.

An important part of the judgment in fact concerns the incentives needed in order for claimants to make Part 36 offers, and the explanation given by the Court of Appeal in that case is highly relevant to the issue of whether a claimant should get indemnity costs on late acceptance by a defendant of a claimant’s offer.

Here is paragraph 8 of that judgment:

 

8. The new requirement of proportionality, which is in mandatory and unqualified terms in Part 44.4(2), is important in itself, since it should discourage parties from incurring disproportionate costs as those costs will not be recoverable unless an indemnity order is made. This restriction on costs should encourage parties to conduct litigation in a proportionate manner, which is an important objective of the CPR. The contrast between standard costs and indemnity costs is also important because of the impact it has on offers to settle, whether under Part 36 or otherwise, by claimants. A defendant, unlike a claimant, does not need to have an additional or particular incentive to make an offer to settle, since an offer to settle is likely to result in his obtaining an order for costs in his favour if the claimant does not obtain a better result than that which was offered. (See Part 36.20). A claimant does need to have an incentive to make an offer to settle since if he succeeds in an action he is normally entitled, without making any offer to settle, to his standard costs and interest. It is in order to provide the required incentive that Part 36.21 provides that the claimant who obtains a more favourable result than that contained in his Part 36 offer can receive interest at a higher rate and an indemnity order for costs from the latest date when the defendant could have accepted the offer without needing the permission of the court.”

 

No reference there to there needing to be a judgment.

That, in my view, is an important and correct statement of the law and the principles behind the law, by the Court of Appeal and should be followed in the Hislop v Perde case.

If the Court of Appeal decides that the Civil Procedure Rules as written, are such that it simply cannot make that order, that is that a claimant should always, absent exceptional circumstances, get indemnity costs on late acceptance, then I hope that the Court of Appeal will express, in the strongest terms, its view that the Civil Procedure Rules need amending.

It should be noted that Parliament felt it necessary, in Section 55 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, to give claimants an even greater incentive to make a Part 36 offer, and that is the 10% uplift on damages if a claimant matches or beats its Part 36 offer.

It cannot be the case that Parliament intended to give claimants that extra incentive, but to have a set of Civil Procedure Rules that removed the indemnity costs incentive.

A purposive construction of the law leads to only one answer, and that is that a claimant is entitled to indemnity costs on late acceptance of its Part 36 offer by a defendant.

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Written by kerryunderwood

July 17, 2018 at 11:59 am

Posted in Uncategorized

PORTALS: UNREASONABLE EXIT, NOT USING, PART 36 AND COSTS

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Two recent decisions highlighted the contradictions between the Civil Procedure Rules and the portal rules and within the Civil Procedure Rules themselves.

 

Ex-Portal Costs Restriction Only Applies When Judgment Entered

In Williams v The Secretary of State for Business, Energy & Industrial Strategy [2018] EWCA Civ 852 (20 April 2018)

the Court of Appeal held that CPR 45.24, restricting a claimant to portal costs where it had unreasonably exited the portal, or not utilised the portal in the first place, only applies where judgment has been entered, and not where a matter has settled.

 

That reflects the literal wording of CPR 45.24:

 

“(2) Subject to paragraph (2A), where a judgment is given in favour of the claimant but –”.

 

The Court of Appeal rejected the paying party’s submission that this was an obvious drafting error, which the court should correct.

Thus the provision in CPR 45.24 limiting costs to CPR 45.18 portal costs, only applies when judgment is entered, which is relatively rare.

That is not the end of it.

Although failure to engage the portal process cannot lead to an imposition of portal only costs unless judgment is entered, unreasonably exiting portal DOES lead to the imposition of portal only costs, by an entirely different route, and that is the EL/PL portal itself, which at paragraph 7.59 says:

 

“7.59 Where the claimant gives notice to the defendant that the claim is unsuitable for this Protocol (for example, because there are complex issues of fact or law or where claimants contemplate applying for a Group Litigation Order) then the claim will no longer continue under this Protocol. However, where the court considers that the claimant acted unreasonably in giving such notice it will award no more than the fixed costs in rule 45.18.”

 

Unfortunately the Court of Appeal misquoted that paragraph in its judgment at paragraph 19, not the only technical mistake in this decision.

 

Note that the RTA portal has a similar provision at paragraph 7.76:

 

7.76 Where the claimant gives notice to the defendant that the claim is unsuitable for this Protocol (for example, because there are complex issues of fact or law) then the claim will no longer continue under this Protocol.  However, where the court considers that the claimant acted unreasonably in giving such notice it will award no more than the fixed costs in rule 45.18.”

 

As Alex Hutton QC, who appeared for the defendant in this matter, said it is illogical that a claim which started in the portal and was then unreasonably removed from it would attract portal only costs, while a claimant that was unreasonably never placed on the portal would attract open, standard costs.

 

It is entirely understandable that there is no provision within the portals themselves providing for what happens when a matter is never placed on the portal, as by definition a matter not on the portal is outwith the portal process.

Here it is the drafter of the Civil Procedure Rules, who seems to have missed the point.

Overall, the portals are vastly better written than the Civil Procedure Rules dealing with the portals and fixed costs.

However, there is a major sting in the tail in this case.

The Court of Appeal held that the general costs rules in CPR 44 gave the court power, in detailed assessment, to limit the assessed costs to CPR 45.18 portal costs, in line with the principles set out in the decisions in

 

O’Beirne v Hudson [2010] EWCA Civ 52; and

 

Javed v British Telecommunications PLC [2015] EWHC 90212 (Costs).

 

Comment

This decision may be technically right, but the drafting of CPR 45.24(2) fairly obviously does not reflect the intentions of the portal and fixed costs scheme.

That is recognised by the court in it sanctioning CPR 44 as the way to achieve the same result, but only after the lengthy, expensive and uncertain process of a detailed assessment.

How does that fit in with the overriding objective?

The Court of Appeal should have adopted a purposive approach, as suggested by Alexander QC, and added the words:

 

“or the claim settles for payment for a sum of money to the claimant before proceedings start”

 

and, after the words

“starts proceedings under Part 7”

adding in to CPR 45.24(2):

 

“where settlement is reached for payment of a sum of money to the claimant or where…”

 

Again, in this section, the Court of Appeal has misquoted the suggested wording by Alex Hutton QC, and appears to be unable to distinguish between claim and claimant.

In a separate part of the judgment, in relation to a separate matter, the Court of Appeal said that all of the portals are expressly designed to apply only in cases where there is one defendant – see paragraph 32 of judgment.

That is not the way portals have been understood; in relation to the EL and PL portal the general view has been that in industrial disease cases, the portal is indeed confined to matters where there is only one defendant, but in other EL/PL cases, the portal can, in principle, apply where there is more than one defendant.

That widespread interpretation arises from paragraph 4.3 of the EL/PL portal which states:

 

4.3        This Protocol does not apply to a claim –

(6) In the case of a disease claim, where there is more than one employer defendant;”

 

Had the portals intended to exclude all claims where there is more than one defendant, then the words “in the case of a disease claim”, would have been excluded so that the relevant provisions simply read that the protocol does not apply to a claim where there is more than one employer defendant

Not the Court of Appeal’s finest hour.

 

Part 36 and Unreasonable Exit from the Portal

In Ansell and Evans v A.T and T (GB) Holdings Limited, Oxford County Court, Case No C38YJ961, 14 December 2017

Oxford County Court, on appeal from a decision of a District Judge, held that where a claimant had accepted a defendant’s Part 36 offer in a fixed costs case which had exited the portal, the court could apply the provisions of CPR 45.24 and restrict the claimant’s costs to portal fixed costs under CPR 45.18, together with the disbursements allowed in accordance with CPR 45.19.

In simple terms CPR 45.24 restricts a claimant’s costs to portal costs if the court considers that the claimant has acted unreasonably in exiting the portal.

Here, the claimant exited the portal and the defendant then made a Part 36 offer, which the claimant accepted in time.

The claimant argued that it was entitled to the fixed costs applicable for the ex-portal, pre-issue, stage as Part 36 trumped CPR 45.24.

The defendant argued that the court always had a discretion to limit the claimant’s costs to CPR 45.18 portal fixed costs if it found, as here, that the claimant had unreasonably exited the portal.

Her Honour Circuit Judge Clarke found in favour of the defendant, that is that however an offer was made and accepted, either under Part 36 or as a Calderbank offer, the court retained its power under CPR 45.24 to limit costs to portal costs, where the claimant had exited unreasonably.

Thus CPR 45.24 is not trumped by Part 36.

 

Comment  

A correct decision, although arguably reached by the wrong route, on the wording of the rule – see the write up of

Williams v The Secretary of State for Business, Energy & Industrial Strategy [2018] EWCA Civ 852 (20 April 2018).

Given the wording of CPR 45.24, as interpreted by the Court of Appeal, the safest cause of action is to rely on the wording of the portal itself, rather than CPR 45.24.

However, the central point here, that Part 36 gives an entitlement to costs, and does not of itself, except in specified circumstances, say what those costs will be, is undoubtedly correct.

The claimant who has unreasonably exited the portal and thus is in the post portal fixed costs regime under CPR 45.29, is nevertheless only entitled to CPR 45.18 fixed costs.

Thus acceptance of a Part 36 offer creates an entitlement to the relevant fixed costs in a fixed costs case, but those may be CPR 45.18 portal costs, not CPR 45.29 post portal fixed costs, even if the case has reached that point.

The problem arises, as we have seen, in relation to a case that has never been on the portal, and obviously if it has never been on the portal, it cannot have exited the portal.

As the law stands, such a matter is not subject to fixed costs at all, and the paying party would have to rely on general costs provisions in CPR 44, and that involves going to a detailed assessment, which is lengthy, expensive and uncertain.

I far prefer the approach of Her Honour Judge Clarke.

 

 

 

 

 

 

 

Written by kerryunderwood

July 16, 2018 at 9:28 am

Posted in Uncategorized

CORONERS AND COSTS

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In R (Adath Yisroel Burial Society & Mrs Ita Cymerman) v HM Senior Coroner for Inner North London [2018] EWHC 1286 (ADMIN)

the Divisional Court of the Queen’s Bench Division considered the incidence of costs of a claim for judicial review against a coroner.

The Queen’s Bench Division pointed out that there appears to be a drafting error in Regulation 17 of the Coroners’ Allowances, Fees and Expenses Regulations 2013, made pursuant to Section 34 of, and Schedule 72 to, the Coroners and Justice Act 2009 as it does not refer to a coroner’s liability for costs.

Both the claimants in this action and the Chief Coroner had written to the court separately, stating that the regulations are defective.

The court said that the point needs to be considered and resolved and that coroners must have certainty about the scope and extent of the indemnity to which they are entitled under the legislation.

Here, the London Borough of Camden had originally indicated that it would not indemnify the coroner in respect of any adverse costs, but it subsequently changed its mind.

The court started with the proposition that it has a discretion on costs pursuant to CPR 44.2, but the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, but pointed out that in relation to judicial officers such as coroners, that general rule does not necessarily apply.

 

The court stated that the leading authority on costs against coroners is

R (Davies) v Birmingham Deputy Coroner [2004] EWCA Civ 207; [2004] 1 WLR 2739 

and quoted from the judgment in that case:

 

“[47]  It will be apparent from this judgment that the answers to the questions I posed in para 3 above are: (1) the established practice of the courts was to make no order for costs against an inferior court or tribunal which did not appear before it except when there was a flagrant instance of improper behaviour or when the inferior court or tribunal unreasonably declined or neglected to sign a consent order disposing of the proceedings; (2) the established practice of the courts was to treat an inferior court or tribunal which resisted an application actively by way of argument in such a way that it made itself an active party to the litigation, as if it was such a party, so that in the normal course of things costs would follow the event; (3) if, however, an inferior court or tribunal appeared in the proceedings in order to assist the court neutrally on questions of jurisdiction, procedure, specialist case law and such like, the established practice of the courts was to treat it as a neutral party, so that it would not make an order for costs in its favour or an order for costs against it whatever the outcome of the application; (4) there are, however, a number of important considerations which might tend to make the courts exercise their discretion in a different way today in cases in category (3) above, so that a successful applicant, like Mr Touche, who has to finance his own litigation without external funding, may be fairly compensated out of a source of public funds and not be put to irrecoverable expense in asserting his rights after a coroner, or other inferior tribunal, has gone wrong in law, and [where] there is no other very obvious candidate available to pay his costs.”

The judgment sets out in detail the facts of this matter and the claimants and the Chief Coroner were represented by counsel at the hearing but the defendant coroner appeared as a Litigant in Person.

The claimants argued that they were entitled to their costs of the action on a number of grounds based on Davies as follows:

 

  1. The Defendant has not acted neutrally because she has actively sought to defend her policy.
  2. ii) The Defendant unreasonably declined to withdraw her policy or sign a consent order.

iii)           The case is distinguishable from Davies because the Defendant in making her policy was not making a judicial decision.

  1. iv) It is manifestly unjust that the Claimants should have to bear the costs of bringing and pursuing these proceedings.

 

The judgment deals with all of the arguments for and against, but concluded that the claimant should succeed on two related bases:

 

  1. first, the defendant’s failure to reconsider her policy in the light of the Chief Coroner’s intervention is an important consideration when considering where, in fairness, the claimants’ costs should fall within the fourth limb of the case in Davies.

 

  1. Secondly, the defendant’s Addendum Detailed Grounds, filed in answer to the Chief Coroner’s detailed grounds, mark the point at which the coroner ceased to be neutral in stance, as examined in the second limb of Davies. From that point on she was advocating the correctness of her policy and no longer simply giving information to the court.

 

For those reasons the court ordered that the defendant should pay the claimants’ reasonable costs from the date she filed her Addendum, with such costs to be the subject of detailed assessment if not agreed.

The court ordered the defendant to pay £68,000 on account of costs.

The court confirmed the general principle that the coroner who remains neutral should not ordinarily be liable for costs.

The court accepted that that itself may be considered to be unfair to a successful claimant and will have to bear their own costs of a successful action.

 

Comment

This is part of a wider issue, and that is in an era where court fees are extremely high, and the Justice Minister has cut fees to reflect the fact that the department was making a profit in many areas, should the parties have to bear their own costs incurred due to mistakes by the judiciary?

 

My view is that when a decision is overturned due to an error of law by the Lower Court, then the state should pay both parties’ costs of that appeal hearing, and any rehearing caused by the case being remitted to the first court again.

Legal costs are too high anyway; they should not be added to by innocent parties having to pay for the faults of the state and its officers.

Written by kerryunderwood

July 12, 2018 at 10:13 am

Posted in Uncategorized

CONDITIONAL FEE AGREEMENTS AND THE CORRECT OPPONENT: MORE CONFUSION

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In Malone v Birmingham Community NHS Trust [2018] EWCA Civ 1376 (19 June 2018)

the Court of Appeal allowed an appeal by a claimant against a first instance decision that the Conditional Fee Agreement was ineffective as the wrong defendant had been named and thus, due to the indemnity principle, there was no liability on the losing defendant to pay costs.

This was a personal injury action and the relevant part of the Conditional Fee Agreement provided that it covered:

 

All work conducted on your behalf following your instructions provided on [     ] regarding your claim against Home Office for damages for personal injury suffered in 2010.”

 

In the event the claim succeeded against Birmingham Community NHS Trust, and not the Home Office, although there had been uncertainty about who was responsible for the claimant’s medical care as he was a prisoner.

The Court of Appeal, in allowing the appeal, accepted that, on the facts of the case, the reference to “Home Office” described the instructions received, rather than the work to be done, and related to past instructions, rather than future work.

 

The Court of Appeal considered the Supreme Court decision in

 

 Wood v Capita Insurance Services [2017] UKSC 24

 

to the effect that context is a useful tool for determining the objective meaning of words, where, as here, the drafting was so poor.

There was no commercial reason to limit the claim to a particular defendant, nor was it in the interests of the parties to do so, especially given the uncertainty as to the correct defendant.

The decision, fair on the facts, does not actually deal with the position where the wrong defendant is named, as compared with stating what work is covered.

In that scenario there remained conflicting decisions and my advice to never name the defendant remains –

see my blogs –

CFAS: NEVER NAME THE DEFENDANT! (1)

CFAS: NEVER NAME THE DEFENDANT! (2)

 

In particular the Court of Appeal here distinguished the decision in

 

Law v Liverpool City Council [2005] EWHC 90020 (costs)

 

rather than overruling it.

 

 

“31. The defendant places considerable reliance on the decision of HHJ Stewart QC (as he then was) in Law v Liverpool City Council [2005] EWHC 90020 (costs), as did the judges below. In that case the CFA was stated to cover: “Your claim against Liverpool City Council for damages for personal injury suffered on 26th March 2003”. Proceedings were brought against the Council as the occupier of the property where the injury was suffered and a defence was served. Subsequently the Council stated that the property had been transferred shortly prior to the accident to a housing association, which was then added as a second defendant. The claim continued against both defendants and was settled by them, with both defendants acknowledging liability in principle for costs, subject to any points about the CFA. The housing association contended that as the CFA had never been varied to include it, there was no CFA in relation to the claim against it.

 

 

  1. HHJ Stewart QC held that the claim against the housing association was not covered by the CFA. His stated starting point was that a CFA which covers a claim against one defendant cannot be construed to encompass a claim against another defendant. He said that the fact that parties are often added to claims should be dealt with by careful drafting of the CFA or by appropriate amendments.

 

  1. There are a number of obvious differences between that case and the present one. In particular: (i) the wording used was more specific and restrictive – “Your claim against Liverpool City Council…”; (ii) there was no apparent careless drafting; (iii) the Council was an appropriate defendant; (iv) the Council remained a defendant up to and including settlement. It is also to be noted that the argument that the wording used was meant to be merely descriptive rather than prescriptive does not appear to have been raised. HHJ Stewart QC’s starting point bypassed that issue. In any event, little assistance is to be derived on issues of construction such as this from different cases, on different facts, involving materially different wording.”

 

 

Thus, contrary to what has been reported, this decision clouds, not clarifies, the issue.

 

Unsurprisingly, the ever astute Simon Gibbs, in his blog has got it right:

 

 

The impact of this decision is likely to increase, rather than decrease, the level of satellite litigation generated where the incorrect opponent is named in a CFA. The decision gives significant encouragement to paying parties that such a challenge may fall into the Law v Liverpool City Council category, whilst offering a glimmer of hope to receiving parties that the full factual matrix will be found to be favourable to them.”

 

 

Comment

 

How about a Supreme Court Diktat that a statement in a Conditional Fee Agreement that it covers “your personal injury matter” shall be deemed sufficient. That still leaves the paying party able to challenge costs on the usual grounds, of necessity, reasonableness and proportionality etc., but avoids these sterile, technical challenges.

Written by kerryunderwood

July 11, 2018 at 9:57 am

Posted in Uncategorized

PROPORTIONALITY AND NON-FINANCIAL MATTERS

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In Various Claimants v MGN Ltd [2018] EWHC 1244 (Ch) (24 May 2018)

the Chief Costs Master dealt with costs and costs management issues in the Daily Mirror Hacking Litigation which is not subject to a Group Litigation Order under CPR 19.10 to 19.15, but its structure is similar, with Individual Costs and Common Costs.

Template Costs Budgets apply to Individual Costs and Common Costs, with the template to follow Precedent H in so far as possible.

Two of the claimants applied for an Individual Bespoke Budget.

The main points of interest in the judgment concern proportionality, with the Costs Judge saying that:

 

“…when the proportionality factors are put together, the financial value of the claims proves to be relatively unimportant because of the wider factors.”

 

The Costs Judge held that in such cases, reasonable costs will be proportionate.

 

“22. I do not find it easy to apply a principled approach to proportionality in relation to these budgets. I can infer, for what it is worth, from the parties’ agreement to having bespoke budgets that they consider larger amounts of costs than those in the template budgets will be reasonable and proportionate. It seems to me that the only principled way of applying the test in these cases is to have only very limited regard to the possibility that proportionality may produce a cap that will limit what would otherwise be a reasonable figure. This is what the parties have done in their submissions. To take any other approach in this bespoke litigation risks the court merely applying arbitrary limits because there is no financial reference point for proportionality.

  1. It seems to me that the wider factors I have summarised, in particular the public importance and test case factors, will have the effect that if the costs are reasonable they are proportionate. That conclusion chimes with the approach the parties have adopted and avoids the court wielding a concept of uncertain application.”

 

The key other factors here were the value of the non-monetary relief in issue in the proceedings and the wider factors in the proceedings, such as reputation or public importance – see CPR 44.3(5)(b) and CPR 44.3(5)(e).

Effectively the Costs Judge has restored the test in

Home Office v Lownds [2002] EWCA Civ 365 (21st March, 2002)

when considering proportionality in cases involving more than just money.

Written by kerryunderwood

July 10, 2018 at 9:41 am

Posted in Uncategorized

PART 36: STANDARD AND INDEMNITY COSTS

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In Shalaby v London North West Healthcare NHS Trust [2018] EWCA Civ 1323

the Court of Appeal held that where a claimant failed at trial to beat a defendant’s offer, and consequently was ordered to pay the defendant’s costs from expiry of the relevant period, those costs were to be on the standard basis, and not the indemnity basis, absent any other special circumstance.

The Court of Appeal pointed out the difference between CPR 36.17(3) and CPR 36.17(4), noting that it is only when judgment is given against the defendant which is at least as good as the claimant’s Part 36 offer, that the claimant is awarded indemnity costs.

The Court of Appeal quoted from its own decision in

Excelsior Industrial and Commercial Holdings v Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879

where it said:

 

“53. Before this Court Mr Cunnington fairly and candidly accepted that the judge did not receive the assistance from him that he should have done and therefore fell into error. The judge appears to have thought that the provision relating to costs on an indemnity basis also applied to the present sort of case, when judgment is entered against a claimant. In fact it has been made clear by this Court that the significance of the absence of any reference to an indemnity basis in what is now CPR 36.17(3) is that:

“… In normal circumstances, an order for costs which the court is required under that Part to make, unless it considers it unjust to do so, is an order for costs on the standard basis. That means that if the court is going to make an order for indemnity costs, as it can …, it should do so on the assumption that there must be some circumstance which justifies such an order being made … there must be conduct or (I add) some circumstance which takes the case out of the norm.” ”

 

The reasons are obvious, although apparently not to the number of first instance judges.

A winning claimant who fails to beat a defendant’s Part 36 offer is punished in two ways:

  • not getting costs from the expiry of the relevant period; and
  • having to pay costs to the defendant from the expiry of the relevant period.

It is important to remember in such case the claimant has won.

Where a claimant matches or beats its own offer, and again has won, it will get its costs on the standard basis anyway, for winning, irrespective of whether it made an offer itself.

That is why indemnity costs are required where a claimant matches or beats its own offer, so as to give the claimant an incentive to make an offer, in exactly the same way as defendants have incentives to make offers.

Awarding the claimant indemnity costs is equivalent to the costs shifting that a defendant benefits from in relation to a successful defendant’s offer.

That is also why Parliament has decided that a claimant who matches or beats its own offer should get an uplift on damages, that is to give the claimant an incentive to make such an offer.

That is also why, as a matter of logic and policy, if not the Civil Procedure Rules, a late accepting defendant should have to pay indemnity costs from expiry of the relevant period.

Written by kerryunderwood

July 9, 2018 at 10:02 am

Posted in Uncategorized

EXEMPLARY DAMAGES: COURT OF APPEAL GUIDANCE

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In AXA Insurance UK plc v Financial Claims Solutions Ltd and others [2018] EWCA Civ 1330 (15 June 2018)

the Court of Appeal awarded exemplary damages of £20,000 each against the three defendants, who had faked road traffic accidents, created false documentation, and, in relation to the first defendant, conducted proceedings on the basis that it was a firm of solicitors, which it was not.

The defendants dishonestly manipulated the court process, including falsely stating that court documents had been served.

The defendants chose not to provide evidence as to their means and so it was appropriate to make a punitive award without reference to their ability to pay.

The Court of Appeal stressed that exemplary damages remained the exception to the rule, and said it was not appropriate to extend the scope of such awards beyond the three types of case recognised in

Rookes v Barnard [1964] AC 1129.

One of the categories identified in that case was where the defendant’s conduct was calculated to make a profit for the defendant which may exceed the compensation payable to the claimant, and that criterion was satisfied here.

The Court of Appeal gave guidance on the approach to be adopted in relation to this category.

The court should analyse the position from the point of view of when the tort was committed, when the wrongdoer did not know whether or not it would achieve the profit that it was seeking.

The court should not decline to make an order for exemplary damages simply because the wrongdoer’s profit could be fully recovered through an award of compensatory damages.

Such a policy would be inconsistent with the decision in

 

Ramzan v Brookwide [2011] EWCA Civ 985.

 

Actual or possible criminal proceedings, or contempt of court proceedings should not affect or reduce an award of exemplary damages.

 

The Court of Appeal approved the analysis in

 

Borders (UK) Ltd v Commissioner of Police of Metropolis [2005] EWCA Civ 197

 

that exemplary damages can be awarded to punish and deter outrageous conduct by the defendant.

Here the action was in the torts of deceit and unlawful means conspiracy.

The Trial Judge awarded the claimant compensatory damages of £24,954.31, but dismissed the claim for exemplary damages.

The Court of Appeal allowed the insurance company’s appeal against that ruling.

Here the fraudulent defendants stood to make a profit of £85,000, whereas the compensatory damages were only around £25,000, and this was the point which brought the case within one the categories in Rookes v Barnard [1964] AC 1129.

 

 

 

 

Written by kerryunderwood

July 6, 2018 at 1:06 pm

Posted in Uncategorized

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