Kerry Underwood

PART 36: WHEN IS A CLAIM NOT A CLAIM?

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here

In Hertel & Anor v Saunders & Anor [2018] EWCA Civ 1831

the Court of Appeal held that no valid Part 36 offer had been made, even though the parties had agreed before the Master that it was a valid Part 36 offer, and that it had been accepted.

The defendant, who had been ordered to pay the claimants’ costs on the claimants’ acceptance of the offer, then appealed to the High Court, arguing that contrary to their position before the Master, this was not a Part 36 offer.

The High Court agreed and ordered the claimants to pay the defendants’ costs, thus reversing the costs position under Part 36.

Here a claim had been made and the claimant then applied for permission to amend the Particulars of Claim and before they were amended the defendant wrote to the claimant stating that the claim, as currently pleaded, was bound to fail, but made an offer to settle the proposed amended claim.

That offer was purported to be made under Part 36.

 

This is how the Court of Appeal set out the case:

 

“2. This appeal raises a potential point of importance regarding the meaning of ‘claim or part of [a claim] or an issue’ as these words are used in CPR Part 36. It arises in circumstances where an offer was made by the defendants in respect of a new claim which had been indicated by the claimants by way of a proposed amendment to the particulars of claim, but which had not yet been the subject of a court order granting permission. All the pleaded claims were abandoned when that offer was accepted by the claimants. Deputy Master Lloyd said that the offer was in accordance with Part 36 and ordered that, in consequence, the defendants should pay the claimants’ costs of the abandoned claims. Morgan J allowed the appeal, finding that the offer was not in accordance with Part 36 and that, because the defendants were the successful party, the claimants should pay the defendants’ costs of the abandoned claims. The claimants appeal to this court, originally seeking to reinstate the order of Deputy Master Lloyd.”

 

The Court of Appeal said that the parties were not free to agree that an offer was a Part 36 offer, with the Part 36 consequences flowing, if, on analysis, the offer was not in fact a valid Part 36 offer.

The Court of Appeal said that if the offer letter fails to comply with a requirement of Part 36, then it will not be construed as complying with the rule, whatever heading it bears and whatever the objective intention of the parties – see

 

C v D [2012] 1 WLR 1962 and;

 

Carillion JM Ltd v PHI Group Ltd [2012] EWCA Civ 588.

Here the defendant argued that in relation to the proposed amendments, they do not form the whole of the claim or part of the claim, as until permission was granted, they were not part of the claim.

CPR 36 requires a Part 36 offer to state whether it relates to the whole of the claim or to part of it or to an issue that arises in it and if so which part or issue.

The claimant relied on the fact that Part 36 allows an offer to be made at any time, including before  proceedings are commenced, when obviously there cannot be any issue of any pleadings.

Here, the Court of Appeal distinguished between that situation, that is an offer to settle a matter before proceedings have been issued, and the position where proceedings have been issued and there is a clear claim as per the Particulars of Claim.

Thus the Court of Appeal said that the fact that Part 36 can apply pre-commencement should not affect the proper interpretation of the words “a claim”, “a part of a claim” or “an issue” where a Part 36 offer is made after the commencement of proceedings.

 

The Court of Appeal then went on to say:

 

30.     The next question is whether, in a case where proceedings are ongoing, the words ‘claim’, ‘a part of a claim’ or ‘an issue’ should be construed as meaning claims, parts of claims or issues which can be identified in or which arise from the pleadings, or whether they would also include claims, parts of claims or issues which have not been pleaded but which, for example, may have been mentioned in correspondence or in an informal conversation between solicitors.

  1. In my view, this question only has to be posed for the answer to become immediately apparent. In civil proceedings, claims/parts/issues can only properly be defined by reference to the pleadings. Indeed, that is the principal purpose of pleadings. It would introduce unnecessary and unwelcome uncertainty if claims/parts/issues were given a wide definition that did not seek to anchor them to the pleadings which the parties have exchanged.
  2. To take an extreme example, Mr Smith suggested in his oral submissions that, if the claimant’s solicitor introduced a possible new claim in a letter to his opponent, then that would be caught by the words of the rule, even if it had not been the subject of any formal amendment, and even if it had not been the subject of any kind of response by the defendant. I consider that such an interpretation would lead to uncertainty and confusion; it may even encourage the potential abuse of the Part 36 regime.
  3. Accordingly, like Morgan J, I would construe the words ‘claim’, ‘part of a claim’; and ‘issue’ as referring to pleaded claims, parts of claims or issues, and not other claims or issues which may have been intimated in some way but never pleaded. Once proceedings have started, the certainty required for Part 36 to operate properly can only be achieved by this interpretation. A new claim which has been intimated, but which is not part of the pleadings, is not therefore caught by r.36.2(2)(d) (current r.36.5(2)(d)).”

 

 

 

 

 

Comment

This is a strange decision, to put it mildly.

The whole point of Part 36 is to enable parties to resolve any matter, including a matter where no proceedings have been issued.

Effectively to rule that once proceedings have been issued, then no other claim or potential claim can be resolved by Part 36 is in conflict with the words of the rule, as well as the spirit of the rule and common sense.

There may be potential for argument about what a Part 36 offer covers, and without going into detail here, there can be issues as to whether a particular expense is an item of special damages, or a disbursement in the proceedings.

Any such dispute can be resolved by the court.

Disputes about whether or not a Part 36 offer has been beaten are not uncommon, for example where the issue of interest comes up, or currency exchange rates.

That potential should not stop parties from being able to resolve potential claims once proceedings have been issued.

In this situation the intention of the parties should be the most important factor, and not subject to a highly technical construction of the rules.

I have recently dealt with the subject of when is a claim a claim in another blog, where I pointed out that the Supreme Court in the case of

 

Gavin Edmondson Solicitors Ltd v Haven Insurance Company Ltd [2018] UKSC21

 

referred throughout to “claims” and “claimants” in portal cases where no substantive proceedings had been issued.

I appreciate that it is possible to distinguish portal claims from unissued claims, but the whole issue needs a clear and authoritative statement from a superior court.

 

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Written by kerryunderwood

September 10, 2018 at 8:10 am

Posted in Uncategorized

IS A MATTER IN THE PORTAL A CLAIM?

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here.

In Aviva Insurance v Lawrence, Oxford County Court 10 April 2018 Case No. C39YP13O

Her Honour Judge Melissa Clarke had to consider the issue of whether a matter in one of the personal injury portals is a “claim” or whether it is necessary for substantive proceedings to be issued before a matter can be described as a claim.

This arose in the context of section 57 of the Criminal Justice and Courts Act 2015 which reads:

 

“(1) This section applies where, in proceedings on a claim for damages in respect of personal injury (“the primary claim”) —

(a) the court finds that the claimant is entitled to damages in respect of the claim, but

(b) on an application by the defendant for the dismissal of the claim under this section, the court is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest in relation to the primary claim or a related claim.

(2) The court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed.”

 

Here the issue was whether there had been a “related claim” for the purposes of section 57(1)(b).

 

Section 57(8) defines “claim” and “related claim” as follows:

 

“(8) In this section—

“claim” includes a counter-claim and, accordingly “claimant” includes a counter-claimant and “defendant” includes a defendant to a counter-claim;

“related claim” means a claim for damages in respect of personal injury which is made—

(a) in connection with the same incident or series of incidents in connection with which the primary claim is made, and

(b) by a person other than the person who made the primary claim.”

 

Here the judge set out a question to be answered as follows:

 

“6. What, however, is the position if Claimant B has not issued a claim in relation to the same incident as Claimant A, but has only notified that he has a claim by submission of a Claim Notification Form? Is that a “ related claim” pursuant to the definition in section 57(8), or does the fact that the claim has not been issued by a court take it outside that definition, such that the Court has no power to dismiss Claimant A’s claim on the basis of his fundamentally dishonest support of Claimant B’s claim?”

 

The first instance judge held that in those circumstances there was no related claim.

On appeal Her Honour Judge Clarke held that once a matter has been lodged on the portal it is a claim, and is therefore capable of being a related claim.

The court said that the wording of the portals, as well as Parts III and IIIA of CPR Part 45 make it very clear that in the context of the portals a claim begins pre-issue saying that “ this concept imbues the whole procedure.”

 

For example in CPR 45.29C there is a heading to Table 6B:

 

“Fixed costs where a claim no longer continues under the RTA protocol”

 

Comment

This is a correct and sensible decision, as one would expect from this particular judge.

If it were otherwise, not only would dishonest claimants be able to avoid the consequences of their dishonesty by finalising one claim before the other was issued, as pointed out by the court here, but also defendants would have a strong incentive not to resolve matters in the portal if they had any doubts about the honesty of any aspect of anyone’s claim.

The whole issue of whether a portal matter is a claim is important. It is also important to consider whether a portal claim constitutes “proceedings” which is a different issue from whether there is a claim.

For example when the personal injury small claims limit goes up, it is likely that the key date is the date of issue and not the date of cause of action; in other words whether or not the matter is in the old costs bearing regime, or the new one with the much higher small claims limit, will depend on when the case was issued.

If date of issue is considered to be when substantive Part 7 proceedings are issued then a claim in stage 1 or 2 before the small claims limit goes up will be costs bearing, but will then cease to be costs bearing if it drops out after the small claims limit goes up.

That issue still needs resolving.

There is support for the concept of a matter in the portal being a claim from other parts of the Civil Procedure Rules.

For example CPR 36.7 provides that a Part 36 offer may be made at any time, “including before the commencement of proceedings.”

CPR 36.5(1)(d) provides that a Part 36 offer must state whether it relates to the whole of the claim or to part of it or to an issue that arises in it and if so to which part or issue, and must also state whether it takes into account any counter-claim.

Thus Part 36 clearly envisages there being a claim with a claimant and a defendant before proceedings are issued, and indeed outside the field of the portals, before anything formal is done in relation to a Claim Notification Form or whatever.

It may well be that in such circumstances a claim begins when a party has served a Notice of Claim under the relevant pre-action protocol.

In Gavin Edmondson Solicitors Ltd v Haven Insurance Company Ltd [2018] UKSC 21     

the Supreme Court was considering the issue of a solicitors’ lien in cases a where a defendant’s insurance company sought to cut out the solicitors and to settle direct with the claimants.

These were all portal matters where substantive proceedings were not issued.

In the press summary, and throughout the judgment, the Supreme Court refers to “the claims” and “the claimants”.

Thus it seems clear beyond doubt that a matter on the portal is a claim, but that still leaves open the issue of whether proceedings have been issued by the placing of a matter on the portal.

 

Written by kerryunderwood

September 7, 2018 at 8:10 am

Posted in Uncategorized

NOTICE OF DISCONTINUANCE

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here.

The Original blog first appeared on the Practical Law Dispute Resolution Blog on 23 August

 

SETTING ASIDE NOTICE OF DISCONTINUANCE

In  Advantage Insurance Co Ltd v Stoodley (1) and Trinity Lane Insurance Co Ltd (2) [2018] EWHC 2135 (QB)

a Queen’s Bench Division Master considered the law in relation to setting aside a notice of discontinuance.

CPR 38.4(1) reads:

“(1) Where the claimant discontinues under rule 38.2(1) the defendant may apply to have the notice   of discontinuance set aside.”

This was a dispute between insurance companies as to who was liable to indemnify the guilty party in a road traffic accident claim.

It was a Part 8 claim.

 

In Stati & Ors v The Republic of Kazakhstan [2018] EWHC 1130 (Comm)

 

the Commercial Court adopted the principles set out in

 

High Commissioner for Pakistan in the United Kingdom v National Westminster Bank plc [2015] EWHC 55 (Ch)

that the court has a discretion which it should exercise with the aim of giving effect to the overriding objective of dealing with cases justly and at proportionate cost.

It is not necessary to establish an abuse of process, although that would be a powerful factor in favour of granting an application to set aside.

 

In Johnson v Gore Wood [2002] 2 AC 1

the court said that there should be finality in litigation and the fact that a party should not be vexed twice in the same matter was relevant to the issue of setting aside a notice of discontinuance.

 

CPR 38.7 in the context of discontinuance gives this principle force in limited circumstances:

 

“38.7. A claimant who discontinues a claim needs the permission of the court to make another claim against the same defendant if –

 (a) he discontinued the claim after the defendant filed a defence; and

(b) the other claim arises out of facts which are the same or substantially the same as those relating to the discontinued claim.”

 

Here, there was no defence as such as it was a Part 8 claim, and so the court doubted that CPR 38.7 would bite, but held that that did not detract from the general principle upon which the rule is based.

The Master set aside the notice of discontinuance, stating that the clear purpose of the claim was to achieve an overall resolution of the insurance position as between the insurance companies.

CPR 1.4(2)(i) imposes a duty upon the court to further the overriding objective by active case management including “dealing with as many aspects of the case as it can on the same occasion.”

All matters should be raised so that they could be properly and efficiently dealt with. One party could not “keep its powder dry” for another case; that was likely to be an abuse of process.

 

INDEMNITY COSTS ORDERED ON LATE DISCONTINUANCE

In PJSC Aeroflot – Russian Airlines v Leeds and another (Trustees of the estate of Berezovsky) and others [2018] EWHC 1735 (Ch) (6 July 2018) (Rose J).

the High Court  ordered the claimant to pay the defendants’ costs on an indemnity basis, following its application to discontinue the claim shortly before trial and without any explanation.

The court considered that where a claimant made serious allegations of fraud, conspiracy and dishonesty as here, and then abandoned those allegations, an order for indemnity costs was likely to be the just result, unless the claimant could explain why it had decided those allegations were bound to fail.

This was on the basis that such conduct deprived the defendant of any opportunity to vindicate its reputation.

 

It followed the approach in

 

Clutterbuck and another v HSBC plc and others [2015] EWHC 3233 (Ch),

 

The court also  considered that circumstances “out of the norm” justified indemnity costs and took into account factors including inaccurate statements made by the claimants during interlocutory proceedings and the aggressive stance adopted by the claimants during the litigation.

In particular, the judge criticised correspondence from the claimant’s solicitors following the death of the second defendant as “losing sight of any basic standard of decent and compassionate behaviour.”

The court did not consider it appropriate to take this into account failure to mediate when assessing costs, because where allegations of fraud and serious wrongdoing were made, proceedings were intrinsically unsuitable for mediation.

This would be penalising the defendants for exercising their right to have their reputations vindicated at trial.

Generally it is risky to rely on an argument that the parties would have been unable to agree a mediator as good reason for refusing to mediate.

 

INDEMNITY COSTS ON DISCONTINUANCE

 

In Two Right Feet Limited (in liquidation) v (1) National Westminster Bank Plc (2) Royal Bank of Scotland Plc (3) KPMG LLP [2017] EWHC 1745 (Ch)

 

the Mercantile Court, part of the High Court, ordered a discontinuing Claimant to pay the Defendants’ costs on the indemnity basis, rather than the standard basis.

Discontinuance triggers an automatic liability for costs in favour of the Defendant on the standard basis and here the Defendants sought  indemnity costs.

CPR 38.3 provides that a Claimant may discontinue a claim by filing and serving a Notice of Discontinuance on the other parties and, under CPR 38.6(1):

 

“Unless the court orders otherwise, a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which the notice of discontinuance was served…”

 

CPR 44.9(1) deems that to be a Costs Order on the standard basis.

In Atlantic Bar and Grill Limited v Posthouse Hotels Limited [2000] C.P.REP32

 

the court held that the reference in CPR 38.6 to a court ordering otherwise allows a court to order indemnity costs.

CPR 44.2 deals with the court’s discretion to order indemnity costs and provides, among other things that in deciding what order, if any, to make about costs:

  • the court will have regard to all the circumstances, including the conduct of the parties, which includes conduct before as well as during the proceedings; and

 

  • in particular the extent to which the parties followed the Practice Direction and any Pre-Action Protocol;

 

  • whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; and

 

  • the manner in which a party has pursued or defended its case or a particular allegation in issue and whether a Claimant, who has succeeded in the claim in whole or in part has exaggerated its claim.

 

Here the court held that various matters took the case out of the norm, including the Claimant’s failure to engage in the Pre-Action Protocol, the exaggeration of quantum, failure to comply with a court order in relation to the appointment and instruction of a single joint expert and a “thoroughly misconceived” approach to disclosure.

 

 

Comment

 

This is a sensible decision on the facts and is a reminder that Notice of Discontinuance does not automatically restrict the Costs Order to one on a standard basis.

In personal injury cases, where Qualified One-Way Costs Shifting applies, the court can still examine the issue of fundamental dishonesty when discontinuance has taken place, so as to determine whether QOCS should be dis-applied and the Claimant should have the automatic costs order against it enforced.

Indeed the Court can of its own motion set aside the Notice of Discontinuance to allow such an enquiry to take place.

Under Lord Justice Jackson’s proposals for fixed costs in the new Intermediate Track, there will be a costs liability once a Letter of Claim has been sent, even if proceedings are never issued, and this reinforces the point that, for all intents and purposes, the Pre-Action Protocols are now part of the court process, with potentially severe costs penalties for failing to follow those protocols.

 

QOCS, DISCONTINUANCE AND STRIKE-OUT AND OTHER THINGS
In Shaw v Medtronic Corevalve LLC & Others [2017] EWHC 1397 (QB)

 

the Queen’s Bench Division of the High Court refused to set aside a Notice of Discontinuance and refused to give permission to the Defendants to enforce a Costs Order in a Qualified One-Way Costs Shifting case.

The discontinuance was not an abuse of process and although there were elements of the claim outside the ambit of QOCS protection, they were either not pleaded, or were de minimis and did not add to the costs.

Previously the court had set aside permission to the Claimant to serve the First and Third Defendants out of the jurisdiction and the claim against the Fourth Defendant was struck out and the Claimant then discontinued against the Fifth Defendant.

Now, the Claimant sought permission to amend the Particulars of Claim against the Second Defendant, who was the only remaining Defendant.

The First, Third and Fifth Defendants applied for leave to enforce the Costs Orders made against the Claimant.

The judge refused permission to the Claimant to amend against the Second Defendant and then struck out the claim against that Defendant.

Thus the position in relation to claim was:

First Defendant:              Service set aside

Second Defendant:         Struck out

Third Defendant:            Service set aside

Fourth Defendant:          Struck out

Fifth Defendant:              Discontinued.

 

CPR 44.15 reads:

 

Exceptions to Qualified One-Way Costs Shifting where permission not required

 

44.15 Orders for costs made against the claimant may be enforced to the full extent of such orders without the permission of the court where the proceedings have been struck out on the grounds that –

(a) the claimant has disclosed no reasonable grounds for bringing the proceedings;

(b) the proceedings are an abuse of the court’s process; or

(c) the conduct of –

(i) the claimant; or

(ii) a person acting on the claimant’s behalf and with the claimant’s knowledge of such conduct,

is likely to obstruct the just disposal of the proceedings.”

In relation to the First and Third Defendants, the claim had not been struck out, even though the judge held that the Claimant had disclosed no reasonable grounds for bringing the proceedings and had said that had the Claim Form been served within the jurisdiction, he would have struck the claims out as having no reasonable grounds.

However, as the claim was served outside the jurisdiction the appropriate remedy was to set aside service.

Neither had the claim been struck out against the Fifth Defendant – it had been discontinued.

Thus CPR 44.15(1)(a), relating to strike-out, could not apply in relation to any of these three Defendants.

Setting aside discontinuance

  

The Fifth Defendant sought an order setting aside the Notice of Discontinuance, so as to allow the court to consider striking out the claim on the basis that the Claimant had no reasonable grounds for bringing the proceedings.

That would have the effect of bringing the matter back within the CPR 44.15(1)(a) exception to QOCS.

The judge refused, saying that:

“… the Claimant had a right to discontinue under CPR rule 38.2. It was a proper use of that power, and to be encouraged, for the Claimant to recognise … that her claim against the Fifth Defendant was not sustainable and to discontinue that claim (Paragraph 53).”

The court recognised that it had power under CPR 38.4 to set aside a Notice of Discontinuance if there had been an abuse of process in serving the Notice of Discontinuance.

The rule itself is silent as to when the power should be exercised.

The judge held that the facts here were not an abuse of process “or anything sufficient to justify setting aside the Notice of Discontinuance (Paragraph 58).”

It left open the possibility that servicing Notice of Discontinuance to avoid the claim being struck out on the no reasonable grounds basis, and thus triggering disqualification from QOCS protection, could be an abuse of process justifying the setting aside of the Notice of Discontinuance.

A claim made for the benefit of the Claimant other than a claim to which this section applies

 

This exception is interpreted to mean a non-personal injury claim.

There is an inherent problem with this exception, which is to be found in CPR 44.16(2)(b), and where the court’s permission to enforce a Costs Order is required.

The problem is that CPR 44.13(1) provides:

“(1) This Section applies to proceedings which include a claim for damages –

(a) for personal injuries;

Thus the whole of the claim does not need to be for personal injuries and the protection is not limited to the personal injury element.

If it were otherwise, the wording would have been something like:

“… which includes claim for damages for personal injuries, but only to those parts of the claim that are for personal injury.”

Even the judge got confused, referring to CPR 44.12.1. That deals with set-off.

Nevertheless the judge’s rulings at paragraphs 60 and 61 are useful guidance as to how such hybrid claims may be treated.

“60. This sub-rule applies if the Claim Form and Particulars of Claim include a claim which falls outside the scope of CPR 44.12.1. There were only two candidates for such a claim. The first is the claim for misrepresentation and deceit. This is referred to in the Claim Form, but not pleaded in the Particulars of Claim, as I noted in paragraph 12.2(d) of the First Judgment. I therefore ignore it. The second is the free-standing claim in unjust enrichment, but, as I said in paragraphs 32 to 35 of the First Judgment, it was unclear whether the Particulars of Claim did include a free-standing claim in unjust enrichment. Moreover, the Claimant did not obtain permission to serve the Claim Form out of the jurisdiction insofar as it contained a free-standing claim in unjust enrichment. Consequently, there was no such claim against the First and Third Defendants and CPR 44.16.1(b) does not apply to them.

 

  1. Assuming that there is a pleaded free-standing claim in unjust enrichment against the Fifth Defendant, it overlaps entirely with the claim for restitutionary damages. The additional costs incurred in dealing with the free-standing claim are minimal and it would not be just to make an order under section 44.16.1(b) on that account. I would have reached the same conclusion in relation to the First and Third Defendants if I had found that CPR 44.16.1(b) applied to them.”

 

The judge also suggested that the Civil Procedure Rules Committee may care to reconsider the scope of CPR 44.15(1)(a).

 

Written by kerryunderwood

September 6, 2018 at 8:10 am

Posted in Uncategorized

FIXED COSTS DO NOT APPLY TO MONTREAL CONVENTION CASES

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here

I am grateful to Peter Bland of Scott Rees and Co for bringing this issue to my attention.

The Montreal Convention 1999 deals, among other things, with claims arising out of injuries sustained on aircraft, and was incorporated into the law of England and Wales by the Carriage by Air Act 1961 as amended.

In two recent cases involving British Airways, District Judges have held that such claims are not covered by the portal and fixed recoverable costs schemes, and in the second case dealt with below, that decision was made by a Regional Costs Judge.

 

In Mead v British Airways plc, Manchester County Court, 15 January 2018, Case No. CO4MA934

the matter was resolved by the claimant accepting the defendant’s Part 36 offer, which referred to paying fixed costs under CPR 45.18.

The claimant issued Part 8 proceedings resulting in detailed assessment and a paper provisional assessment in which a judge held that Montreal Convention claims were not subject to the portal process.

At this review hearing it was agreed that the central issue was whether a Montreal Convention claim falls within the definition of public liability claims in paragraph 1.1(18) of the portal, which provides that

 

“public liability claim  –

 

  • means a claim for damages for personal injuries arising out of a breach of a statutory or common law duty of care made against—

(i)  a person other than the claimant’s employer; or

(ii) the claimant’s employer in respect of matters arising other than in the course of the claimant’s employment; but

  • does not include a claim for damages arising from a disease that the claimant is alleged to have contracted as a consequence of breach of statutory or common law duties of care, other than a physical or psychological injury caused by an accident or other single event.”

 

Article 17 of the Convention provides:

 

“Article 17—Death and Injury of Passengers—Damage to Baggage

  1. The carrier is liable for damages sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking.”

 

A claimant is not required to prove fault on the part of the airline; it is a strict liability claim.

The court upheld the claimant’s submission that a Convention claim does not arise out of a breach of statutory or common law duty of care.

Thus it is not a public liability claim within the portal definition as Article 17 imposes a strict liability.

The Convention is a self-contained code and deprives the claimant of a common law claim.

It is irrelevant that but for the Convention, the facts would have given rise to a common law claim or other breach of duty claim.

The claim could not properly be put on the portal and therefore was not subject to fixed recoverable costs.

 

In McKendry v British Airways plc, Liverpool County Court, 16 May 2018 Case no. D06LV750

the case was also resolved by the claimant accepting the defendant’s Part 36 offer, followed by Part 8 proceedings and detailed assessment.

The point was exactly the same.

Here the judge was the Regional Costs Judge and he reviewed thoroughly the authorities and public policy issues and arrived at the same conclusion, namely that such claims are excluded from the portal process and thus are not covered by the fixed recoverable costs schemes.

 

Comment

Maybe British Airways will now concede this point and concentrate on getting people’s luggage to its destination.

 

 

 

 

Written by kerryunderwood

September 5, 2018 at 8:10 am

Posted in Uncategorized

RE-ALLOACTION TO SMALL CLAIMS TRACK AFTER TRIAL

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here

In my blog Can Court Allocate to Small Claims Track after Trial? I ask that very question and reported that that had happened in Newport County Court.

 

I also refer to the case of

 

Conlon v Royal Sun Alliance and Insurance plc [2015] EWCA Civ 92

 

where the Court of Appeal, while on the facts of the case declining to re-allocate the claim, held that it did have the power to do so and the court has the power retrospectively to re-allocate the claim.

That has happened again, this time in the case of

 

Kavak v FMC Chemicals Limited, Manchester County Court 9 April 2018 Case No. DO7YM204.

 

There the case had been allocated to the fast-track and at trial the judge dismissed the claimant’s claim for personal injury but allowed a claim for damage to his vehicle, and also held that the claimant was 25% to blame for the accident.

The net effect was that judgment was entered for the claimant in the sum of £855.57.

There was no suggestion of dishonesty.

The claim had started in the RTA portal and as the defendant had disputed causation, and had alleged contributory negligence the matter exited the portal and became the subject of Part 7 proceedings.

The claimant contended that because the matter had started under the RTA portal, then the fixed costs regime should apply.

The defendant contended that the claim should never have gone on the portal as the claimant could not prove that he had suffered injury and that the value of the claim was such that it ought to have been commenced by proceedings which would then have been allocated to the small claims track.

The judge recognised that a case should only be re-allocated between tracks with retrospective effect where there is good reason to do so and accepted that retrospective re-allocation can lead to a situation in which a party has conducted litigation on certain expectations as to what steps are reasonable to take, and therefore what costs are reasonably incurred, which expectations are undermined by re-allocations.

Nevertheless, on the facts of the case, the judge came to the conclusion that it was right to re-allocate the matter after trial.

The decision as to whether to pursue a personal injury claim was that of the claimant and his lawyers and such a claim could not, or should not, have been pursued unless the claimant believed that he had suffered personal injury and his lawyers considered that he had a reasonable prospect of showing that.

The judge said that he could not “see that he could ever properly have brought a claim for such injury.”

 

He also said this:

 

“15. It should be noted that, based on the Claimant’s argument, there is an incentive to a claimant to state that he has suffered personal injury so as to seek to achieve the (perceived) benefits of a case being in the fast-track. There is certainly a potential benefit to those who may recover legal costs because of allocation to the fast-track. In my judgment it would be unattractive to make orders that put a premium on presenting a claim that cannot be justified.”

 

 

 

Written by kerryunderwood

September 4, 2018 at 8:10 am

Posted in Uncategorized

COSTS APPEAL ALLOWED: JUDGE ERRED IN APPLICATION OF BULLOCK PRINCIPLES

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here.

In McDermott v Inhealth Ltd [2018] EWHC 1835 (QB) (19 July 2018)

the Queen’s Bench Division of the High Court allowed the claimant’s appeal against “what was in effect a limited Bullock order”.

Where there are several defendants in a case, one successful and the other(s) not, a Bullock order usually requires a claimant to pay the successful defendant’s costs, but allows the claimant to recover those costs from the unsuccessful defendant(s).

Here the court reviewed the Bullock principles.

The claimant brought personal injury proceedings, consisting of two claims, following the defendants’ failure to diagnose his brain aneurysm.

The first claim alleged negligence against the second defendant in the design of the protocol used for the scanning process.

The second claim, against all three defendants, a scans claim, arose because the third defendant carried out a “GE scan” which showed the aneurysm, but the first defendant did not report this to the claimant.

There was an unresolved issue regarding which defendant was responsible for this omission.

The second defendant submitted to judgment on the protocol claim and the claimant discontinued against the third defendant with no order for costs, and against the first defendant.

The lower court considered the Bullock principles, but concluded this was not a classic Bullock case because the claimant succeeded on a free-standing claim against the second defendant in its own right, as in

 

Mulready v Bell [1953] 2 All ER 215

 

where a Bullock order was set aside on appeal.

The claimant was ordered to pay the first defendant’s costs.

The second defendant was ordered to pay the costs which the claimant was liable to pay to the first defendant and the claimant’s own non-generic costs of his action against the first defendant and the third defendant, but only post-1 December 2016, the lower court finding it unreasonable for the second defendant not to have admitted liability by that date.

The High Court held that the protocol claim and scans claim were not “perfectly independent causes of action … where the breaches of duty alleged are in no way connected …”

Mulready and the lower court erred in treating them as such.

The second defendant was a defendant to both claims and responsible for the protocol and arranging the claimant’s scans.

Both claims concerned the allegation that one or other of the defendants was responsible for the fact that the claimant’s aneurysm was not identified through a GE scan.

The first defendant and the third defendant relied on the protocol in defending the scans claim and, in resisting both claims, the second defendant sought to blame the first defendant and the third defendant.

The High Court substituted an unrestricted Bullock order.

 

Written by kerryunderwood

September 3, 2018 at 8:10 am

Posted in Uncategorized

FIXED COSTS IN SPLIT TRIAL CASES

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here.

It should go without saying that a fast track matter should never be listed for a split trial, and the superior courts are now strongly against split trials in any matter, but nevertheless it does still happen.

In those circumstances what is the correct level of fixed recoverable costs, and when is the claimant entitled to them?

At present the fixed recoverable costs scheme only applies to personal injury cases, and not all of those, and with a maximum value of £25,000, unless the matter has wrongly been placed on the portal.

This issue will become a far more significance as and when fixed recoverable costs spread to all civil litigation valued at £100,000 or less.

Although the rules do not deal with the matter, my view is that a successful claimant cannot be entitled to receive the fixed recoverable costs once he or she has won the liability trial, essentially for two separate reasons.

Firstly, both the preparation fee and the trial advocacy fee are in part calculated by reference to damages, and so it would be impossible to quantify the fixed recoverable costs.

Clearly if the matter is going to trial it has reached the final stage of the Table in CPR 45.29 Table 6B, that is issued – Post Listing and Pre-Trial.

The fixed recoverable costs in the different type of ex-portal claims which have reached that stage are:

 

£

 

  • road traffic accident    2,655 plus 20% of damages

 

  • employers liability    4,280 plus 30% of damages

 

  • public liability    3,790 plus 27.5% of damages

 

In all types of work the trial advocacy fee is fixed by reference to the amount awarded by the court as follows:

 

£

 

  • up to £3,000     500

 

  • £3,000 to £10,000     710

 

  • £10,000 to £15,000 1,070

 

  • £15,000 and over  1,705

 

The second reason is that the defendant may have made a Part 36 offer, which the claimant has failed to beat.

Let us assume that the defendant had offered £10,000 very early on in the case, and the claimant then wins on liability, but obviously without quantum being determined, as it is a split trial.

At that stage no one will know whether or not the defendant’s Part 36 offer will be beaten or not, as obviously that will be determined at the quantum trial.

The principle applies even if no Part 36 offer has been made, and in any event a defendant who has lost a liability trial is then very likely to make a Part 36 offer on quantum.

That raises an interesting, and as yet unanswered, question as to what happens in those circumstances.

The claimant has had to do all of the work in readiness for a liability trial, and has thus reached the final stage.

After the liability trial the defendant, for the first time, makes a Part 36 offer, which the claimant then fails to beat at the quantum trial.

What happens to costs?

My view is that the claimant still gets the full preparation costs, that is in accordance with the formula set out above, together with the trial advocacy costs of the liability trial, and does not have to pay the defendant any costs in relation to preparation.

The claimant would not get the costs of the second trial, and would have to pay the defendant’s costs of that trial.

I am unaware of any case on this point.

In relation to the fees for the quantum trial, neither party should get any extra preparation costs as the fixed fee, calculated in relation to the formula above, is intended to cover all liability and quantum issues and the fixed recoverable costs scheme does not differentiate between cases where liability is admitted, and those where it is not admitted.

Thus if a case is settled just before trial for, say, £10,000, then the claimant recovers exactly the same level of fixed costs whether liability was admitted only just before trial, or where it had been admitted at the very beginning of the case, meaning that almost no work on liability was done.

The idea is that it is a swings and roundabout system.

The advocacy fee is a freestanding view and generally a successful claimant should get a second advocacy fee if there is a liability trial and a quantum trial, although again, there is no authority on this point.

Presumably the amounts of damages awarded at the quantum trial would also determine the level of fixed advocacy costs for the liability trial, in accordance with the above formula.

Outside the field of personal injury there is no system of Qualified One-Way Costs Shifting, and therefore where there is a liability trial at which the defendant succeeds, then that is the end of the matter and the defendant will get its costs in accordance with the fixed recoverable costs formula.

Written by kerryunderwood

August 31, 2018 at 8:10 am

Posted in Uncategorized

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